Unemployment figures continue to plummet in Plymouth and across the South West with companies struggling to fill vacancies as they wrestle with the impact of the pandemic, staff absences and rising wages.
New Government stats show the claimant count is down by more than a third across the city compared to last year, and it is also down across the region, including in Exeter where the claimant count has fallen by more than 40%.
But business research reveals a skills shortage with companies finding it tough to fill jobs at the same time as they battle inflation. And while wages are rising in the South West, they are lagging hikes nationally with Office for National Statistics data showing real earnings have fallen during the past year as cost of living increased.
In Plymouth, major companies such as Aldi, offering salaries of up to £63,000, burger restaurant Hub Box and fibre optic specialists LANtech Communications have been recruiting heavily.
And across the region employers including Blue Arrow, Dartmoor Community Kitchen, One World Café, Lifeworks, Sigma Removal, Stover Financial Planners, Hadleigh Court, Jurassic Golf, Buckfast Abbey, Mego Employment, Ground Force Landscaping Solution, Green King, Balance Virtual Assistants, Dog Trust and Network Rail have been on the hunt for staff.
The region’s claimant count, 103,086 people, is down 39% compared to 2021. And in Plymouth there has been a fall in all three parliamentary constituencies, with Sutton and Devonport down 30% to 3,904, Moorview down 34% to 2,125 claimants, and South West Devon falling 44% to just 1,004 people claiming benefits.
Meanwhile, recruitment consultancies in the region registered a softer increase in hiring activity in March, according to the latest KPMG and REC, UK Report on Jobs: South of England survey. Recruiters often said candidate shortages had weighed on their ability to fill roles.
There were downturns in permanent and temporary labour supply, the report said. At the same time, vacancies continued to rise sharply in March, which drove further marked increases in starting pay for both permanent and temporary staff.
Starting salaries in the South West rose for the 13 th month in a row in March. And the rate of inflation remained substantial, despite slipping to a six-month low with recruiters often saying starting pay had increased to attract and secure staff amid the low candidate supply.
Starting salaries rose at a record pace across the UK as a whole, but at a stronger rate than in the South West where lower candidate availability was linked to widespread skill shortages, and uncertainty surrounding the pandemic and the war in Ukraine. As for temporary jobs, strong demand for staff, Brexit and a preference for permanent roles among some workers drove a reduction in temp candidates.
Also, rising numbers of people are choosing not to work and the inactivity rate has risen 0.2 percentage points to 21.4%, driven by people saying they were looking after relatives at home, had retired, or had long-term sickness.
Ian Brokenshire, Plymouth-based senior partner at KPMG in the South West, said: “The statistics clearly show the supply of candidates is still struggling to catch up with demand as we saw the most significant dip in growth of permanent placements for 12 months. Quite simply, there is a skills shortage and companies are finding it tough to fill vacancies.
“Many firms in the South West are still wrestling with the impact of the pandemic and staff absences, as well as rising costs from input prices and an upward pressure on wages and salaries.”
Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), said: “Labour and skills shortages are driving inflation. Starting salaries for permanent staff are continuing to grow rapidly, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices. Record Covid infection levels are also pushing up demand for temporary workers, particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates.”
Suren Thiru, head of economics at the British Chambers of Commerce, said:“While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce. Increasing vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may remain a persistent drag anchor on economic activity.”
