The UK labour market remains tight, with job vacancies falling but still above pre-pandemic levels. This means that candidates have a good chance of finding a job, but businesses may struggle to find the staff they need.
In this report, we will take a closer look at the key trends in the UK labour market, including vacancies, pay, employment, unemployment, and economic inactivity. We will also provide some guidance for candidates and businesses on how to navigate the current market.
Key Points
The UK labour market remains tight, with job vacancies falling but still above pre-pandemic levels. Nominal wage growth remains strong, but real earnings are growing slowly due to inflation. The number of payrolled employees is now above pre-pandemic levels, The adjusted experimental unemployment rate is unchanged on the quarter but above pre-pandemic rates, and the adjusted experimental inactivity rate is unchanged on the quarter but still above pre-pandemic rates.
Vacancies
The estimated number of vacancies in the UK fell by 58,000 on the quarter to 957,000 in August to October 2023. Vacancies fell for the 16th consecutive period, with vacancies falling in 16 of the 18 industry sectors.
Pay
Annual growth in regular pay (excluding bonuses) in Great Britain was 7.7% in July to September 2023, slightly down on the previous periods, but is still among the highest annual growth rates since comparable records began in 2001. Annual growth in employees’ average total pay (including bonuses) was 7.9%. In real terms (adjusted for inflation using Consumer Prices Index including owner occupier’s housing costs (CPIH)), annual growth for total pay rose on the year by 1.4%, and regular pay rose on the year by 1.3%.
Strikes
There were 229,000 working days lost because of labour disputes across the UK in September 2023. Most of the strikes were in the health and social work and education sectors.
Employment, Unemployment, and Economic Inactivity
Because of the increased uncertainty around the Labour Force Survey (LFS) estimates, the ONS is publishing an alternative series of estimates of UK employment, unemployment, and economic inactivity. These figures were derived using growth rates from Pay As You Earn Real-Time Information (excluding the early flash estimate) and the Claimant Count for the periods from May to July 2023 onwards.
These alternative estimates for July to September 2023 show that:
- the UK employment rate decreased by 0.1% on the quarter to 75.7%
- the UK unemployment rate was largely unchanged on the quarter at 4.2%
- the UK economic inactivity rate was largely unchanged on the quarter at 20.9%.
What does this mean for candidates and businesses?
Nominal wage growth is strong, but real earnings are growing slowly due to inflation. This means that candidates may be able to negotiate higher salaries, but their purchasing power may not be increasing.
Businesses should be prepared to offer competitive salaries and benefits to attract and retain employees. They should also consider investing in training and development to help their employees upskill and reskill.
Advice for candidates:
Be proactive. Don’t wait for jobs to come to you. Reach out to companies you’re interested in, even if they’re not actively hiring. Network with people in your field and let them know you’re looking for new opportunities. A good start for networking is LinkedIn.
Be prepared to negotiate. In a competitive market, it is important to be able to negotiate salary and benefits. Do your research to know what your market value is and be prepared to walk away from a job offer that does not meet your needs.
Highlight your skills and experience. When applying for jobs, be sure to highlight your skills and experience that are most relevant to the position. Be specific and provide examples of your accomplishments.
Be open to new opportunities. Consider expanding your job search to include different industries or locations. You may also want to consider contract or freelance work.
Advice for businesses:
Be competitive with salaries and benefits. To attract and retain top talent, businesses need to be competitive with salaries and benefits. Offer competitive pay and benefits packages and be transparent about your compensation structure.
Create a positive work environment. Employees want to work for companies that value them and offer a positive work environment. Make sure your employees feel supported and appreciated, and that they have opportunities to grow and develop.
Invest in your employees. Provide your employees with opportunities to learn and grow. This could include offering training and development programs, tuition reimbursement, and mentorship opportunities.
If you are a candidate or a business and would like more information, please contact us on 01604 239555 or email info@impactrecruitment.co.uk and a member of our team will be in touch.
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