ONS data continues to indicate record vacancies
The ONS issued its latest Labour Market Analysis, on 15 November. Appointments take a look at a summary of the findings which show that despite another fall in the number of vacancies during the previous quarter they remain at a record high.
This means it’s a good time to be looking for work. However, on the flip side many businesses continue to struggle to recruit the right talent to their business and the competition to attract applicants in the labour marketing remains tough.
Neil Carberry, Chief Executive of the Recruitment and Employment Confederation (REC), commenting on the latest figures said:
“..statistics in the labour market suggest that the exceptional growth in demand for new workers we’ve seen through the year is at an end. But hiring activity is still at a very high level and shortages are still a key problem for firms. Pressure to raise pay for existing staff, as shown in today’s data, and caution about the economic outlook, are likely to be contributing factors in hirers becoming a little more cautious.
“Despite increased levels of employer caution, vacancies are still at historically high levels – it is still a good time to be looking for work. Unemployment remains at record lows, while employment is still below February 2020 levels. That means economic inactivity – those out of work and not looking for it – is a growing challenge, with the ONS figures showing it has hit a new high.
“From healthcare to childcare to flexible working, businesses and Governments need to be working together to boost labour supply so people can earn more in the midst of high inflation and create the capacity for the economy to grow. Growth is the only way we can fund public services and keep taxation low over the long term, and we’ll be looking for a clear plan from the Chancellor at the Autumn Statement on Thursday.”
UK employment rate remains around 75.5%
The UK employment rate for July to September 2022 was 75.5%, largely unchanged on the previous quarter and 1.1 percentage points lower than before the coronavirus (COVID-19) pandemic (December 2019 to February 2020). Employment for the West Midlands in the labour market report is slightly lower at just over 74%. Over the latest three-month period, the number of employees decreased, while self-employed workers increased.
The most timely estimate of payrolled employees for October 2022 shows another monthly increase, up 74,000 on the revised September 2022 figures, to a record 29.8 million.
The unemployment rate for July to September 2022 decreased by 0.2 percentage points on the quarter to 3.6%. The number of people unemployed for all duration categories decreased in the latest three-month period. The labour market report shows the West Midlands region saw the highest unemployment rate estimate in the UK of 4.7%.
Long-term sickness continues to add to economic inactivity
The economic inactivity rate increased by 0.2 percentage points on the quarter to 21.6% in July to September 2022. This figure reflects the number of people who are not actively seeking work. During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high. A recent survey from the ONS showed that over two-thirds of those becoming long-term sick in 2021 and 2022 were already economically inactive for another reason in the three months before the study.
Labour Market report indicates number of vacancies falls but remains at historically high levels
In August to October 2022, the estimated number of vacancies fell by 46,000 on the quarter to 1,225,000. Despite four consecutive quarterly falls, the number of vacancies remain at historically high levels in the labour market. An increasing number of businesses are now reporting holding back recruitment because of economic pressures.
Pay growth continues against a backdrop of inflation
Growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.7% among employees in July to September 2022. This is the strongest growth in regular pay seen outside of the coronavirus pandemic period.
Average regular pay growth for the private sector was 6.6% in July to September 2022, and 2.2% for the public sector. Outside of the height of the coronavirus pandemic period, this is the largest growth seen for the private sector and the largest difference between the private sector and public sector.
In real terms (adjusted for inflation) over the year, total pay fell by 2.6% and regular pay fell by 2.7%. This is slightly smaller than the record fall in real regular pay seen in April to June 2022 (3.0%). However, it remains among the largest falls in growth, since comparable records began in 2001.
This month the ONS reinstated the monthly labour disputes statistics. In September 2022, there were 205,000 working days lost to labour disputes.
The figures show that the recruitment market remains challenging with many firms looking at alternative ways to attract talent and make their packages more attractive. You can download our latest salary guide to see if your pay and rewards are competitive in the local recruitment market.