In the period from August to October 2023, the UK experienced a notable decline in job vacancies, marking the 16th consecutive quarter of contraction.
According to the latest data released on November 14, 2023, by the Office for National Statistics (ONS), the estimated number of vacancies fell by 58,000 on the quarter, reaching a total of 957,000. This downturn affected 16 out of the 18 industry sectors.
Despite the challenging job market, the report indicates mixed trends in earnings. Annual growth in regular pay (excluding bonuses) in Great Britain was reported at 7.7 percent for July to September 2023.
While this represents a slight decrease compared to previous periods, it remains one of the highest annual growth rates since comparable records began in 2001.
Meanwhile, annual growth in employees’ average total pay (including bonuses) was 7.9 percent, influenced by one-off payments in the Civil Service during July and August 2023.
When adjusted for inflation using the Consumer Prices Index including owner occupier’s housing costs (CPIH), the real-terms annual growth for total pay rose by 1.4 percent, and regular pay increased by 1.3 percent.
Working days lost
Labour disputes in the UK resulted in the loss of 229,000 working days in September 2023, with the health and social work and education sectors being the most affected by strikes.
Revised figures for September 2023 show a notable shift in payrolled employee growth, changing from a reported decrease of 11,000 to an increase of 32,000 when compared with August 2023. The estimate of payrolled employees in the UK for October 2023 increased by 33,000 to reach 30.2 million. However, this October estimate is provisional and may be subject to revision as more data becomes available.
In response to increased uncertainty around Labour Force Survey (LFS) estimates, the ONS has introduced alternative estimates of UK employment, unemployment, and economic inactivity. These figures, derived from Pay As You Earn Real-Time Information and the Claimant Count, provide a more holistic view of the labour market during a period of uncertainty.
According to these alternative estimates for July to September 2023:
- The UK employment rate decreased by 0.1 percentage points on the quarter to 75.7 percent.
- The UK unemployment rate remained largely unchanged on the quarter at 4.2 percent.
- The UK economic inactivity rate was also largely unchanged on the quarter at 20.9 percent.
The ONS emphasises the provisional nature of these estimates and anticipates revisions as more data becomes available in the coming months.
Julia Turney, Partner at independent consultancy Barnett Waddingham says:
“The UK’s labour market isn’t just a workforce; it’s the beating heart of the economy, driving growth, innovation, and prosperity. As unemployment figures remain steady for the quarter, the situation is still precarious, revealing a delicate balancing act between employer demands and employee expectations.
“At a time when ONS data shows economic inactivity rising, and those inactive due to long-term sickness hitting a record high, there is no denying the need for action to revitalise the workforce and supercharge employer productivity. The chancellor holds some the keys to solving the productivity puzzle, so all eyes will be on the autumn statement to see what measures he has to boost productivity, but employers need to support this transition internally too. They should, for example, consider how their models and benefits packages can cater to a more diverse workforce given that encouraging older generations to re-enter the job market is such an important plank of plans to harness productivity and improve longevity of the workforce.”
For a comprehensive overview of the latest labour market statistics, including earnings, employment, unemployment, redundancies, and vacancies, the full dataset can be accessed here.
Paul Holcroft, Managing Director at Croner, says:
“On first glance of the latest ONS figures they paint an improved picture, with the number of vacancies falling and annual pay increasing for employees. But, interestingly, with the amended figures things remain relatively unchanged. So, it appears that some employers are still living through an ongoing struggle and walking a tightrope with competing pressures.
“Some employees look to their employer for help amidst the cost-of-living crisis so creating a social safety net for them is a focus for certain employers as a way to provide support to their staff. It is something which many individuals are also likely looking for in an employer. This could include offering employee benefits, and platforms where staff can access discounts and employee assistance programmes.
“Many employers are trying to make themselves as attractive as possible, compared to their competitors, to retain staff so may choose to invest in such areas, particularly as recruitment and retention can be a continuing area of difficulty for employers. But this comes at a cost, so ideas and projects for growth of the business may still have to be shelved or scaled back in some businesses for the foreseeable future or until the employment landscape improves more significantly.”
Amelia Brand is the Editor for HRreview. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the 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.