The economics of the pandemic have confounded us in so many ways. A key area of interest now is the jobs market where, despite relatively high unemployment, there is growing evidence of jobs shortages in many sectors. New research from the Department of Finance provides some insights.
It first confirms what businesses in a range of sectors are now saying – they are struggling to find new staff and hold on to existing ones. Postings on Indeed. com, the jobs website, are now 50 per cent ahead of pre-pandemic levels. CSO data shows half of firms in the services sector and one third in industry are reporting constraints due to staff shortages. A survey by Hays Recruitment showed two in five firms were not able to go ahead with key projects because of skills shortages.
Childcare duties
While overall unemployment has fallen sharply – from more than 30 per cent at the height of the pandemic to below 7 per cent now – the numbers out of work and on the PUP do provide a potential labour supply. The department, however, points out that there is a clear mismatch between the people looking for work and the jobs available – a lack of digital and ICT skills, increasingly vital after the pandemic, is one issue.
Survey evidence from Indeed points to other issues. Some people are now committing to child-caring duties, while others can survive on a partner’s income. A minority are worried of the Covid risks of returning to work. Many migrants returned home during the pandemic and have not returned.
In some cases the running-down of PUP levels may push more people to look for work: one-third of those on the PUP surveyed by Indeed in August said they were not urgently looking for work.
The variety of reasons for labour shortages shows there is no quick answer to this. Depending on Covid trends, job shortages look like one of the big issues of 2022. The upside is that fears earlier in the pandemic of a big rise in long-term joblessness are now easing.
