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Where have all the workers gone and will they ever come back?

When a swanky Manchester restaurant advertised for a receptionist in July last year, it was shocked to receive 963 applications in one day — not the 30 or so it had expected.

That was then. “It’s very, very different now,” says Carol Cairnes, director of people at the restaurant’s owner, D&D London. Its 40-odd eateries are getting about a tenth of the applicants they had last July on average, and some roles are proving seriously hard to fill.

“Our chef adverts normally attract around 50 applicants; nowadays we are lucky if we have five,” she says, adding that of those five, only one or two were suitably qualified.

Welcome to one of the more curious Covid developments: a spate of labour shortages in rich countries even though millions are still out of work.

As economists debate the causes and consequences of the phenomenon, as well as how long it will last, the rest of us can only marvel at how abruptly things have changed.

One visible sign of the shift is an assortment of baits, bonuses and benefits that would have seemed preposterous just months ago when workers faced a Covid jobs bloodbath.

The sunny Australian state of Queensland just launched a “work in paradise” campaign that offers A$1,500 (£820) in cash plus subsidised travel to lure workers to a tourism sector battered by labour shortages.

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In the US, Amazon is offering $1,500 sign-on bonuses — plus another $100 if you can prove you’re vaccinated — and McDonald’s has joined a string of big US groups raising wages for staff.

In London, a restaurant around the corner from my office is giving customers £100 gift vouchers if they can successfully recommend a new hire. Another nearby eatery is offering its staff a bonus of up to £2,000 if they can do the same thing.

Recruiters are even struggling to hire recruiters. The competition for top applicants is “red hot right now”, says Neil Carberry, chief executive of the UK’s Recruitment & Employment Confederation. “I’ve never seen a market for experienced recruitment consultants like this,” he said last week.

Why is this happening now? One factor: strong economic recovery in some places is pushing up demand at businesses that are all reopening at once from lockdowns. “Everyone is recruiting at the same time,” says Tony Wilson, director of the UK’s Institute for Employment Studies research group. “That’s very, very unusual.”

Could furlough schemes and pandemic handouts be spurring workers to shirk? Experts disagree but it is clear that in sectors such as hospitality, people have left the industry for care homes, supermarkets and other spots with kinder hours and sometimes better pay.

Some countries have added pressures that could be exacerbating shortages.

There has been an exodus of EU truck drivers since Brexit in the UK, where many industries rely heavily on workers from across the Channel. Before the UK left the EU in 2020, 72 per cent of the D&D London restaurant group’s staff were from the EU while 6 per cent were from other countries and 22 per cent were British.

Tough border rules are being blamed for labour shortages in Australia and also New Zealand, where one dairy farmer group warned this month that the stress of worker shortages was so wrenching it could lead to the loss “of both human and animal lives”.

For smaller businesses, the struggle to find staff has been especially intense.

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“It’s scary,” says Nick Ward, a chef from Brighton in the UK who has been so desperate to find workers he has resorted to paying friends to help him out on busy days. He is far from alone. Moments after we spoke last week, he forwarded an urgent text from a catering contact asking if Ward could come and work for him that day, which he couldn’t.

It is possible to feel great sympathy for those in Ward’s position while also being pleased to see people working unsociable, unpredictable hours for little pay are finally gaining the upper hand. As Tony Wilson of the IES puts it, some industries have been enjoying a buyers’ market for the best part of 15 years. “There’s been a shift in the balance of power,” he says. It may be temporary but for as long as it lasts, employers have no choice but to adjust.

Twitter: @pilitaclark

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