What are the Current Labour Market Conditions? The latest Office for National Statistics data shows a labour market that is plateauing, with the employment rate decreasing, unemployment increasing, economic inactivity rising sharply and vacancies falling for the second quarter in a row.
Skills and labour shortages and high vacancies are putting a break on growth and business, while inflation remains very high. This culmination of challenges is putting a strain on households and dampening business optimism for the months ahead. The Government should make the skills and immigration systems responsive to shortages by updating the Shortage Occupation List, the courses eligible as part of the Lifetime Skills Guarantee, and reforming the Apprenticeship Levy to unlock business investment in the full range of skills the economy needs.
Employment Rate and number of vacancies both fall:
- The official measure of employment shows an increase of 40, 000 in the three months to July 2022, compared with the previous quarter, and an increase of 337,000 on the same period a year ago. Despite this increase, the employment rate has decreased by 0.2% percentage points to 75.4%.
- Male employment increased over the quarter to July, while female employment also increased. On the year, male employment increased by 95,000 and female employment increased by 99,000.
- Only those aged 35 – 49-year-old saw an increase in employment levels over the quarter (+47,000).
- Those aged 50-64 saw the largest decrease in employment levels (-43,000), followed by those aged 25 – 34 (-15,000) and those aged 18 – 24 (-14,000).
- The number of people working full time increased by 27,000 while the total number of self-employed people working part time decreased (-12,000).
Unemployment falls and redundancy rate is still historically low:
- Official data shows that, in the three months to July 2022, unemployment decreased by 76,000 to stand at 1.22 million. The unemployed rate stood at 3.6%, a decrease of 0.2% points on the previous quarter, the lowest it has been since 1974. There are 332,000 fewer unemployed people than in the same period a year ago.
- The number of redundancies increased on the previous quarter by 8,000, but is down by 29,000 on the year. This means that the redundancy rate is at 2.3% per thousand employees.
- The number of those who are economically inactive increased significantly (+194,000) compared to the previous quarter, with 246,000 more people economically inactive now than the same time last year. The inactivity rate is now at 21.7%, and the inactivity level at 9 million, the highest level since August 2015.
Responding to the figures, Neil Carberry, Chief Executive of the REC, said: “While unemployment has hit its lowest point in decades, this news should be taken with a pinch of salt as employment and hours worked are still below pre-pandemic levels. This emphasises again the shortages employers face – and the need to find ways to attract and support people back into the labour market. We hear that the Chancellor’s message to Treasury officials is to focus on economic growth – addressing these shortages is vital to doing that. From reducing NHS backlogs to help those who are sick, to improved welfare to work systems and skills reform, there is much to do. Businesses can hire in this environment – but it requires careful thought and planning about how to get the offer right. Recruiters are here to help.”
Quarter 4 is around the corner, and we know that especially now, with the current labour market conditions it is very difficult for organisations to keep up with the labour shortages. As a recruitment agency with over 20 years of experience, we have the knowledge and the resources to help other businesses cope with the current situation.
If you are an employer struggling with staff shortages or need help with Q4 planning and prepping, 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@impactrecruitmet.co.uk or give us a call on 01604 239555 to find out how we can help.
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