The number of people claiming unemployment benefits per job vacancy in Britain has increased fivefold since the onset of the coronavirus pandemic, according to an employment thinktank.
The Institute for Employment Studies (IES) said approximately eight people are claiming benefits support for every job opening, up from 1.5 people per job before the crisis began in March.
The number of job vacancies in Britain has plunged by almost half a million since January to 333,000 in June, hitting the lowest levels since comparable records began in 2001. With companies making redundancies, putting hiring plans on hold or furloughing their workers, the numbers of people claiming unemployment-related benefits has climbed by 112% since March to reach more than 2.6 million – resulting in an average of 7.8 benefit claimants per vacancy.
The IES has published its analysis as competition among job hunters becomes increasingly intense, with businesses receiving hundreds of CVs for the relatively few openings they have on offer.
Mitchells & Butlers, Britain’s biggest pub chain with about 1,700 pubs and restaurants, told the Guardian it had recorded a fourfold rise in applications for front of house jobs on average. One of its All Bar One venues, in Liverpool, has received more than 500 applicants for a single bar staff role.
Last week it emerged a restaurant in Manchester had nearly 1,000 applications for a receptionist post within 24 hours, while pubs in London have also pulled in hundreds of applicant despite offering very few jobs.
As many as 9.5 million people – a third of the UK’s workforce – have been been placed on the government furlough scheme, which covers 80% of workers’ wages. However, economists fear that the Treasury closing the scheme at the end of October could trigger mass unemployment unparalleled since the 1980s.
The Institute for Employment Studies said inner city areas and former industrial towns were bearing the brunt of the unfolding jobs crisis, with an average of 20 benefit claimants for each job vacancy in these areas.
London is the worst affected, amid a plunge in the number of people travelling to the centre of the capital for work, which has had a severe knock-on effect for retail, leisure and hospitality outlets in the city.
The jobs thinktank said the London borough of Brent had been hardest hit, with almost 50 benefit claimants for every vacancy, up from just eight in March. Four of the ten worst-affected areas are London boroughs, while places outside of the capital such as South Tyneside, Bolsover, Merthyr Tydfil and Tameside in Greater Manchester were also among the hardest hit.
The number of people applying for jobs has started to rise over recent weeks as lockdown measures are eased and people start trying to return to life as close to normal as possible. Firms are however looking to bring back furloughed staff first before taking on any new applicants. Growing numbers of companies are also making swingeing job cuts amid a sharp downturn in demand for goods and services triggered by the pandemic.
Jobs websites have recorded a sharp rise in people hunting for work in recent weeks. Candidate searches rose by 30% in June compared to the previous month, according to the website TotalJobs. Data compiled by LinkedIn from its platform of more than 27m UK profiles suggests that finding work has become at least three times more competitive.
Young people leaving education this summer will also be hit hard by the crisis, with more than 100 graduates competing for every job requiring a university qualification, according to the job search site Adzuna.
Tony Wilson, director of the Institute for Employment Studies, said he expected unemployment to mount further in the toughest jobs market for a generation.
“At least 1 million more people are on out of work benefits who don’t have incomes, and who are looking for work as the economy reopens. So we have double whammy: many more people looking for work and very few jobs being advertised,” he said.