Static employment picture masks continuing changes to the labour market

Gerwyn Davies, Labour Market Adviser at the Chartered Institute of Personnel and Development (CIPD), said the latest ONS statistics highlight the gradual re-engineering of the UK labour market during the past two years.

“The continued increase in private sector employment is a tribute to the UK’s flexible labour market but masks some underlying trends that are gradually transforming the employment picture.

“Figures offer further evidence that the increase in employment is underpinned more by growth in self-employment than any increase in the overall number of employees, which has actually fallen during the past year. Growth is particularly strong among the part-time self-employed in roles ranging from administration to the associate and professional level. The results also continue to show an increase in the proportion of temporary, part-time workers who would like permanent, full-time work. Taken together, the results explain why those lucky enough to be in well-paid, full-time roles are increasingly staying put, while those looking for work are chasing ‘odd-job’ roles.

“So far the growth in the private sector has more than managed to compensate for the fall in public sector employment. Figures confirm that public sector headcount has fallen by around 430, 000 since June 2010. It is interesting to note that the trajectory of public sector job losses since 2010 has slowed sharply in recent months, which may confirm the theory that many public sector employers have front-loaded job cuts.”

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Key statistics:

• The number of people in employment has risen by 442, 000 in the two years to July 2012. Of this total, the increase in the number of self-employed (261, 000) exceeds the rise in the number of employees (152, 000). The number of unpaid family workers and people on government supported employment and training programmes has also risen to a two-year high.
• The number of temporary workers that could not find a permanent job has fallen from 36% in July 2010 to 40% in July 2012. Meanwhile, the number of people working part-time involuntarily has increased from 1.1 million to 1.4 million in the two years to July 2012.