Will the End of Furlough Bring Relief to Candidate Shortages?


Looking back at the jobs market in August, candidate shortages showed no signs of easing. In August, the number of staff available to start jobs fell at another new record rate, deepening the current labour shortage at a time when permanent vacancies stood at an all-time high.

With the Furlough Scheme ending this month, there could be more job hunters available bringing some relief to the labour shortage that we are currently facing. But with many businesses changing how they work during the pandemic, there is the possibility that any available candidates may not have the skills to match current business requirements.


Permanent Placements in August

The seasonally adjusted Permanent Placements Index signalled a rapid and accelerated rise in permanent staff appointments across the UK during August with the rate of growth being the steepest seen since data collection began nearly 24 years ago. London, South, Midlands, and the North all recorded faster rises in permanent placements last month with London leading this increase where growth hit a fresh record high.

Vacancies in August

For the sixth month in a row, the number of both permanent and temporary vacancies rose across the UK with the steepest increase in demand being for permanent staff in the private sector. At 953,000, the number of vacancies in the three months to July was more than two-and-a-half times the amount seen in the same period a year ago and the highest ever recorded by the ONS.  The REC’s latest Jobs Recovery Tracker indicated there were a total of 1.66 million active job adverts in the UK in the final week of August.

Which Sectors are Hiring?

All ten categories of permanent and temporary staff monitored by The Recruitment and Employment Confederation and KPMG saw improvements in demand during August. The strongest permanent growth was signalled for IT/Computing, closely followed by Hotel & Catering. Retail saw the softest, but still rapid, increase in vacancies whilst temporary growth was highest in Hotel & Catering and Nursing/Medical/Care.

What is candidate availability like?

At 23.0 in August, the seasonally adjusted Total Staff Availability Index fell from 25.9 in July to signal a further severe reduction in labour supply across the UK. Candidate numbers have now decreased in each of the past six months, with the latest drop the sharpest seen since data collection began in October 1997. The availability of permanent candidates continued to deteriorate during August with the rate of decline being the most severe seen in the survey history and rapid. This candidate availability is thought to be linked to a continued reluctance among employees to switch roles amid lingering pandemic-related uncertainty, fewer candidates from the EU, furlough, and generally tight labour market conditions.

This labour shortage led to a further acceleration in the rate of starting salary inflation during August. Moreover, the rate of increase exceeded the previous high seen in July and was the quickest seen in nearly 24 years of data collection. Data from the Office for National Statistics (ONS) showed that employee earnings (including bonuses) increased +8.8% year-on-year over the second quarter of 2021. This was stronger than the +7.4% rise seen in the preceding three-month period and a series record for the second month in a row.


Even though the jobs market looks buoyant, there are signs that we should be cautious about the economy’s prospects, especially as we approach another Winter living with Covid. For companies looking to attract talent, now is the time to consider your approach to how you attract and retain staff.

If you need help to find high calibre talent for your business, talk to the team at Amdas. info@amdas.co.uk