Vice Chair, Federation of Small Businesses
As economic anomalies go, our current jobs market – where unemployment sits at sub 5% in the wake of the most severe recession in modern history – takes some beating. But what will the post-pandemic job market look like?
The job site Reed reports that it added 275,000 vacancies to its site last month, taking the total number of jobs up for grabs on its platform to the highest monthly total since February 2008.
But application rates are subdued. One in four small firms said access to the right staff was a major barrier to growth even before the pandemic hit. The barrier is now growing.
What does the future hold?
The Government rightly extended access to the option to furlough staff until September of this year. The unlocking road map is not a given, and if variants cause it to be altered, firms will be extremely grateful for that Treasury support.
But until it ends, there will be a significant proportion of the workforce which is receiving wage support and not looking for work.
Added to that, businesses are now wrestling with a new UK immigration system. The costs of use to small firms – typically in the region of £3,000 for sponsorship of a single employee – are prohibitive.
Equally, young people have been hit disproportionately by this pandemic – one in ten are now not in employment, education or training.
Act now to shore-up employers’ spirits
Most of our members with staff want to recruit over the next 12 months and they tell us that reducing Employer National Insurance Contributions, which serve as a jobs tax, would be the most effective way to help them deliver fresh roles.
In addition, the new immigration system must evolve in constant dialogue with business groups like ours, ensuring firms can access the talent they need to drive our economy forward – costs need to be kept down and the shortage occupation list continually reviewed.
Equally, young people have been hit disproportionately by this pandemic – one in ten are now not in employment, education or training. The Kickstart Scheme was a welcome intervention on this front. The Government now needs to work hard on reforms to the apprenticeship system, ensuring levy funding can reach the small firms that will really make a difference.
No doubt we have more challenges coming down the track as we strive to recover from a torrid 18 months. But, by acting now, the Government can put our jobs market in the right place to absorb any as yet unknown shocks to come.