200,000 employees return to work in grand reopening hiring surge – but UK still has a ‘Covid employment gap’ of almost three million workers

Payrolled employment increased by almost 200,000 in May as the country experienced a grand hiring surge. However, the UK still has a ‘Covid employment gap’ of 2.8 million workers to close before the recovery is complete, the Resolution Foundation said in response to the latest ONS labour market statistics today (Tuesday).

The latest data shows how the grand reopening on 17 May contributed to payrolled employment increasing by almost 200,000, while separate ONS data suggests that the number of furloughed workers fell to around two million in late May.

The strengthening labour market was also shown in the number of vacancies, which – at 881,000 in May – are now above pre-crisis levels, while the unemployment rate continued to fall, down 0.3 percentage points on the previous three months to 4.7 per cent.

But, while encouraging, the UK’s Covid recovery is far from complete, says the Foundation. It notes that at the end of May, the UK still had a ‘Covid employment gap’ of 2.8 million workers who were either fully or partially furloughed, or out of work completely.

While this gap has fallen by more than half from over 6 million in February, the challenge will be to close this gap by as much as possible before emergency support begins to get phased out from 1 July.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“The grand reopening in May has led to a grand hiring surge as people return to work. The sheer pace of the recovery is inevitably leading some employers to struggle to recruit, though this should ease in the coming months.

“But while this welcome hiring surge is rapid, it is also far from complete, as the UK still has a Covid employment gap of almost three million workers.

“With emergency support starting to be phased out over the next few weeks, and ended completely by October, this gap will need to be closed a lot more to prevent a worrying rise in unemployment later this year.”