Labour Market Overview Update! According to the latest ONS statistics report, the exceptional growth in demand for new workers we have seen through the year is at an end, however hiring activity is still at an exceedingly high level and shortages are still a key problem for firms.
Key trends:
- The number of pay-rolled employees is now well above pre-pandemic levels.
- The employment rate is unchanged on the quarter but increased on the year and is still below pre-pandemic levels.
- The unemployment rate decreased on the quarter and the year and is below pre-pandemic rates.
- The economic inactivity rate increased on the quarter and the year and is still above pre-pandemic rates.
- The redundancy rate increased on the quarter but is below pre-pandemic rates.
- Vacancies decreased on the quarter but are above pre-pandemic levels.
- Increase in inflation in recent months are causing real pay growth rates to decrease.
The UK will likely enter a downturn soon, but employers are still recruiting and competing for talent, and redundancy intentions remain low. The difficulty in securing talent is affecting pay – public and private sector organisations are continuing to increase wages in a bid to recruit people, and hard-to-fill vacancies persist.
In addition to raising pay and hiring new people, employers are focused on upskilling existing staff and delivering cost-of-living support.
Despite increased employer caution, vacancies remain at historically high levels, indicating that it is still a good time to be looking for work. Unemployment remains at an all-time low, while employment remains below February 2020 levels. That means economic inactivity – those out of work but not looking for work – is becoming a growing issue, with ONS figures showing it has reached a new high.
The UK employment rate for July to September 2022 was 75.5%, unchanged on the previous quarter and 1.1 percentage points lower than before the coronavirus (COVID-19) pandemic. Over the latest three-month period, the number of employees decreased, while self-employed workers increased.
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.
If you are an employer struggling with staff shortages, we are here to help. Here you can read more about how you can prepare for peak. Alternatively, please send us an email at info@impactrecruitment.co.uk or give us a call on 01604 239555 to find out how can we help.
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