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Demand for workers rises at fastest pace for more than 23 years

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EDINBURGH, SCOTLAND - APRIL 26: A waitress serves members of the public drinks at the Three Sisters Pub in the Cowgate as lockdown measures are eased on April 26, 2021 in Edinburgh, United Kingdom. Cafes, beer gardens, non-essential shops and museums are reopening in Scotland today as lockdown easing continues. (Photo by Jeff J Mitchell/Getty Images)
Britain's hospitality sector has been struggling with staff shortages recently as it reopens from months of lockdown. Photo: Jeff J Mitchell/Getty Images

UK businesses are hiring staff at the fastest rate in 23 years and advertising the most vacancies in three years, new data has shown.

According to a KPMG survey and online job placement agency Adzuna, the number of workers available to fill job vacancies declined at the quickest pace since 2017.

Staff shortages worsened for the third consecutive month, with recruiters citing pandemic uncertainty and the furlough scheme weighing on the availability of permanent candidates.

The volume of total UK online job adverts on 28 May stood at 127% of its February 2020 average, Adzuna said, while vacancies increased across all UK countries and English regions compared with the previous week.

It comes amid the lifting of lockdown restrictions and the reopening of various sectors across the country.

Read more: Restaurant and pub sales soar as UK economy reopens

KPMG’s monthly survey, which is based on responses from 400 recruitment and employment agencies, said that hiring activity has intensified across all job categories, particularly in IT and computing and the hospitality industry, including hotels and catering.

Britain's hospitality sector has been struggling with staff shortages recently as it reopens from months of lockdown, forcing pubs and restaurants to offer cash sweeteners to lure workers.

In April, job postings in some parts of the hospitality industry rose 20% above pre-pandemic levels. Jack Kennedy, a UK economist at job listings website Indeed, said: "In some areas the number of candidates isn’t keeping up.”

UK pubs and restaurants in particular have blamed both the coronavirus pandemic and Brexit for staff shortages across the industry. The problem has become particularly acute since indoor dining resumed last month as part of the next stage of Britain’s roadmap out of lockdown.

Watch: Government ‘open minded’ about extension of furlough scheme, says Michael Gove

If staffing shortages continue, the jobs crisis could derail the hospitality sector's recovery from the pandemic. The industry is now urging the government to relax immigration rules to allow low-skilled workers from abroad to work in bars and restaurants across the country.

KPMG has likewise urged the UK government, as well as British firms, to address skills gaps that they say already existed before the pandemic, partly caused by Brexit, and are now the most pressing issue in the jobs market.

The jobs market "seems to be firing on all cylinders" KPMG partner Claire Warnes said. "But the deterioration in staff supply intensified this month, this is a worrying trend.”

Before Britain left the EU, more than 30% of hospitality workers across the UK were European. In London, the proportion was more than half. Brexit and the pandemic have meant many of those workers have returned to their home countries.

Read more: UK construction grows at fastest pace since September 2014

Kate Shoesmith, deputy chief executive of the Recruitment & Employment Confederation (REC), said: "With demand spiking, the skills and labour shortages that already existed in the UK have come into sharper focus – and COVID has only made them worse.

"This is the most pressing issue in the jobs market right now, and has the potential to slow down the recovery."

Meanwhile, a government spokesperson said: "Our multi-billion pound plan for jobs, including the Kickstart scheme, is supporting employers across the country to create jobs and help jobseekers get the skills and experience needed to develop their careers and fulfil roles for years to come.

"Additionally, we have increased the apprenticeship hiring incentive to £3,000 ($4,235) per new apprentice hire and our lifetime skills guarantee - worth the equivalent of around £3,400 per person - ensures all adults can gain new skills and qualifications."

Watch: Government launches £2bn Kickstart employment fund

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