According to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, increased economic uncertainty, pressure on clients’ budgets, and low candidate numbers all dampened hiring activity at the end of 2022. Permanent placements fell for the third month in a row, at the fastest rate since the beginning of 2021, while billings for temporary workers rose only slightly.
Demand for workers has also slowed, with total vacancies increasing at the slowest rate since February 2021. Concurrently, the downturn in candidate availability continued to ease. In terms of pay, starting salaries and temp wages both increased in response to rising living costs and a lack of qualified candidates. However, pay growth rates were the slowest in 20 months.
The employment rate is unchanged on the quarter but up on the year and is still below pre-pandemic rates.
In September to November 2022, the UK’s employment rate was projected to be 75.6%, essentially constant from the preceding three months and 1.0 percentage points lower than it was before the coronavirus (COVID-19) pandemic (December 2019 to February 2020). Over the past three months, there were more employees and part-time self-employed people than there were full-time self-employed people.
The number of payroll employees is now well above pre-pandemic levels.
The timeliest estimate of pay rolled employees for December 2022 shows another monthly increase, up 28,000 on the revised November 2022 figures, to 29.9 million.
The unemployment rate increased on the quarter but decreased on the year and is still below pre-pandemic rates.
The unemployment rate increased by 0.2% from September to November 2022, reaching 3.7%. The number of people unemployed for up to six months increased in the most recent three-month period, led by those aged 16 to 24. Those unemployed for more than six and up to twelve months increased, while those unemployed for more than twelve months decreased.
The economic inactivity rate decreased on the quarter but increased on the year and is still above pre-pandemic rates.
The rate of economic inactivity fell by 0.1% quarter on quarter to 21.5% from September to November 2022. Those aged 16 to 24 years and those aged 50 to 64 years drove the recent three-month decrease in economic inactivity. Looking at economic inactivity by reason, those who are inactive because they are students, long-term sick, or retired drove the quarterly decrease.
The redundancy rate increased on the quarter but is below pre-pandemic rates.
From September to November 2022, the redundancy rate increased to 3.4 per thousand employees, but it remains low.
Vacancies decreased on the quarter but are above pre-pandemic levels.
From October to December 2022, there were 1,161,000 vacancies, a 75,000 decrease from July to September 2022. Despite six consecutive quarterly declines, the number of vacancies remains historically high. The decline in the number of vacancies reflects industry uncertainty, as survey respondents continue to cite economic pressures as a factor in delaying recruitment.
Outside of the pandemic period, regular pay has seen the strongest growth in the latest quarter.
Employees’ average total pay (including bonuses) and regular pay (excluding bonuses) grew at the same rate of 6.4% from September to November 2022; for regular pay, this is the fastest growth rate seen outside of the coronavirus pandemic period. From September to November 2022, the average regular pay growth in the private sector was 7.2%, while in the public sector it was 3.3%. This is the highest growth rate for the private sector seen outside of the coronavirus pandemic period.
Total and regular pay both fell by 2.6% in real terms (adjusted for inflation) over the year. This is slightly less than the record drop in real regular pay from April to June 2022 (3.0%), but it remains one of the largest falls in growth since comparable records began in 2001.
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