The latest data from the Office for National Statistics (ONS) reveals that payrolled employees in the UK experienced a modest increase of 15,000 between December 2023 and January 2024.
However, the more significant trend emerges when looking at the broader picture, with a rise of 386,000 (1.3%) in payrolled employees observed between January 2023 and January 2024.
While the overall number of payrolled employees continues to climb, the rate of annual growth is on a decelerating trajectory. The early estimate for February 2024 indicates a monthly increase of 20,000 (0.1%) and a year-on-year rise of 368,000 (1.2%), bringing the total to 30.4 million.
However, it is crucial to note that the February 2024 estimate is provisional and subject to revision as more data becomes available next month.
Employment rates
In the period from November 2023 to January 2024, the UK’s employment level for individuals aged 16 years and over has risen on an annual basis but declined quarter-on-quarter. The employment rate for those aged 16 to 64 years is estimated at 75.0 percent, below figures from a year ago and down in the latest quarter.
As of November 2023 to January 2024, the UK unemployment rate for individuals aged 16 years and over stands at 3.9 percent. While this rate is higher than estimates from a year ago, it remains largely unchanged compared to the latest quarter.
The economic inactivity rate for those aged 16 to 64 years in the UK increased to 21.8 percent, surpassing estimates from November 2022 to January 2023 and experiencing a rise in the latest quarter.
Michael Stull, Managing Director at ManpowerGroup UK, says that the “historically high economic inactivity rates at 21.8 percent continue to constrict a UK labour market already operating at near capacity.”
Similarly drawing concern, Janine Chidlow, Managing Director at WilsonHCG says: “What does remain a concern from the latest statistics is the economic inactivity rates of those aged 16-24 years which is now at the highest levels reported in the last four years. With skills shortages rife – particularly in STEM remits – the UK simply cannot afford to have such a significant level of inactivity from the emerging demographic. More needs to be done to encourage these potential workers into meaningful employment that will add to core skills in the UK, or we could soon face a skills deficit on a more significant scale that will only have a detrimental effect on businesses and the economy.”
Vacancies still exceed pre-pandemic levels
The Claimant Count for February 2024 rose by 16,800 on the month and 85,800 on the year, reaching 1.585 million.
In the same period, the estimated number of vacancies in the UK fell by 43,000 on the quarter to 908,000. Although vacancies have fallen for the 20th consecutive period, they still exceed pre-COVID-19 pandemic levels.
Wage growth
In terms of earnings, the annual growth in total earnings (including bonuses) in Great Britain was 5.6 percent in November 2023 to January 2024. Meanwhile, the annual growth in employees’ average regular earnings (excluding bonuses) stood at 6.1 percent.
Commenting on the UK’s wage growth, Ben Harrison, Director of the Work Foundation at Lancaster University, says that whilst workers will welcome the 16th consecutive month of above 6 percent regular pay growth, “most are unlikely to be feeling richer as the Office for Budget Responsibility still forecasts real wages won’t get back to 2008 wage levels until 2026. This near two-decade period of stagnating wages is likely to hit the 6.8 million people in severely insecure work hardest. They already face a financial penalty of £3,276 per year compared to those in secure work, yet the Government’s National Insurance cuts will do little to support those on the lowest incomes.
“Instead of Rishi Sunak threatening to squeeze benefits further to fund more tax cuts for those on middle and high incomes, we must improve the quality and security of jobs on offer if we are to see living standards and wages rise in the years ahead.”
200,000 working days lost to strikes
Finally, the UK experienced 203,000 working days lost in January 2024 due to labour disputes, with the health and social work industry recording the highest number of working days lost during the month. This data highlights the ongoing challenges within the labour market despite positive trends in employment and earnings.
“As an economy in desperate need of growth, we cannot afford another year of stagnating productivity,” says Julia Turney at Barnett Waddingham.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
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