Hospitality businesses most likely to be struggling to fill vacancies

Hospitality businesses are more than twice as likely as other industries to be experiencing challenges in filling vacancies for this time of year, according to the Office for National Statistics (ONS).

In new research published today for between 23 August and 5 September 2021, 30% of hospitality businesses said that vacancies were more difficult to fill than normal. This compares with 13% across all industries (up from 9% in early August).

Vacancy challenges are more common for larger businesses. Excluding those with fewer than 10 employees, 41% of businesses across all industries were struggling to fill vacancies in late August, up from 32% earlier in the month.

These difficulties coincide with a very busy time for recruitment, according to the latest labour market data, with hospitality among several industries posting record numbers of vacancies in June to August 2021. Aside from hospitality (30%), the water (27%) and health (23%) industries were most likely to be finding it more difficult than normal to recruit staff in late August.

In the transport and storage sector, 15% of businesses were struggling to fill jobs. This may partly reflect reports of a shortage of heavy goods vehicle (HGV) drivers. However, despite being mainly employed in transport and storage, HGV drivers only account for around one in 10 jobs in the industry.

Businesses across all industries said that a lack of suitable applicants was the main reason for being unable to fill vacancies in late August 2021, with transport and storage firms the most likely to cite a lack of EU applicants specifically.

Of all businesses that were experiencing recruitment challenges, 25% said that a reduced number of EU applicants was a factor. This rose to 46% of transport and storage businesses, the highest of any sector.

Transport and storage companies were also most likely to report an increased number of vacancies for “other reasons” (47%).

The survey question allowed multiple responses, so it could be that some businesses were experiencing recruitment challenges because of a lack of EU applicants as well as “other reasons” (which could include border controls, retirements or difficulty in getting an HGV licence at short notice).

Some EU workers left the labour market during the coronavirus pandemic. The number of EU nationals employed in the UK fell by 8.7% between January to March 2020 and April to June 2021. Meanwhile, the total number of people in employment fell by 2.4% over the same period.

Industries experiencing recruitment challenges because of reduced EU applicants have also been affected by a fall in EU workers, according to the Business Insights and Conditions Survey (BICS).

In early August, transport and storage and hospitality businesses were the most likely to say they had fewer EU workers than in previous years (7%).

Data showed that the number of EU HGV drivers fell by 43% in the year ending March 2021 compared with the previous year, while the fall in EU workers in hospitality may partly reflect an overall decline in employment within the industry.

There were 1,034,000 job vacancies in the UK in June to August 2021, an increase of 35.2% (269,300) on the previous quarter and the highest since the series began in 2001.

The hospitality and transport and storage industries were among those with a record number of vacancies in June to August, with job openings up by 59.1% and 32.5% respectively compared with pre-pandemic (January to March 2020). While vacancies were at record levels, the total number of employees on UK payrolls was around the same as it was in February 2020.

Among industries, payrolled employment was generally rising in August 2021, but remained below pre-pandemic levels by as much as 6.0% in hospitality and 10.2% in arts and recreation.

In industries such as hospitality and arts and recreation, the number of employees on payrolls was rising, suggesting that vacancies are gradually being filled.

However, in the transport and storage industry, the number of people on payrolls was falling while vacancies are increasing. This suggests a gap between industry demand for workers and their availability.

Overall, the rise in vacancies was reflected by an increasing number of people starting new jobs. There was a record net flow from unemployment to employment in April to June 2021, with more than twice as many people starting a job, having been unemployed, as those leaving a job (568,000 compared with 269,000, a difference of 299,000).

This reversed the trend seen in the second and third quarters of 2020, when there were more job leavers than starters. It was unclear whether people re-entering the labour market are doing so in the same sectors or not.

By 10 September 2021, the number of online job adverts in the North East was 72% higher than in February 2020, but only 12% higher in London.

London has also seen a slower recovery in payrolled employment than other regions. The number of people on payrolls in London remained 1.8% lower in August 2021 than in February 2020, whereas at a national level it was recently equal to pre-pandemic numbers.

Photo: Swampy167/Shutterstock.com