April’s rise in the minimum wage is pressuring employers to reduce hiring for summer jobs, while fears grow that certain industries are facing labour shortages.
New figures from the Recruitment and Employment Confederation (REC) indicate a sharp decline in job postings for temporary summer roles, particularly in the hotel, restaurant, tourism, and construction sectors.
According to REC data, job postings in the hotel and accommodation sector fell by 45% in April and May compared to the same period last year.
Restaurants and catering saw a 38% decline, while chef and cook roles dropped by 33%.
Separate data from Make UK, the manufacturing industry lobbying group, showed that there may be a significant skills shortage in the sector, which has “placed a ceiling on expansion potential”.
Manufacturers have begun to recover meaning recruitment intention has lifted from 8% to 26%, according to Make UK’s research.
Despite the recovery in manufacturing, businesses are struggling to hire more workers.
Last month, the overall number of job listings across the economy decreased by 0.7% to 1.7 million, with new job listings falling by 1.1% between April and May.
Neil Carberry, chief executive of the REC, said: “A second big increase in the national minimum wage has affected hiring levels in key sectors.
“We can see some evidence of that drag in the lower summer seasonal hiring demand. Reducing hours or roles while opening for shorter periods are all decisions that firms may feel forced to make in tough times.”
Later this week, the Bank of England is expected to keep its base interest rate unchanged at 5.25% amid concerns that rapid wage growth is preventing inflation from falling to the target rate of 2%.