Today the Office for National Statistics (ONS) published its final labour market figures for 2022.

These give estimates of employment, unemployment and also economic inactivity. They also give insights into other employment-related statistics for the UK.

HRreview has gathered expert reactions to what these statistics show us about the UK’s job market.

Jack Kennedy, UK Economist at the global job site Indeed, comments on the ONS statistics:

“The final ONS update for 2022 provided mixed news on the labour market. Employment was up on the quarter, driven by an increase in employees, as self-employment declined. Vacancies softened, but remain elevated at 1.19 million.

“There was also a noteworthy 41,000 drop in economic inactivity among the key 50-64 age group, with evidence of some people returning to the labour force from retirement. That may be an early sign of cost-of-living pressures prompting some people to rethink their plans. However, overall inactivity remains more than 560,000 higher than pre-pandemic levels and continues to fuel recruitment challenges across a range of sectors.

“Pay data highlighted one of the largest disparities in wage growth between the public and private sectors we’ve seen to date: 6.9 percent y/y in the private sector and 2.7 percent y/y in the public sector. This is an interesting sign of the times as we acknowledge strikes across healthcare, transport and distribution. In fact, in October we saw the highest number of working days lost due to labour disputes since 2011 as the UK economy struggled to recover following the financial crash.

“Despite the strongest growth in nominal pay (6.1% y/y) we’ve seen outside the pandemic period, real terms pay continues to be squeezed considerably by high inflation, with total and regular pay both falling by 2.7 percent y/y, one of the largest declines on record.”

ManpowerGroup UK Director, Chris Gray, comments on the ONS statistics:

“Employers are under pressure to respond to the demands of a shrinking workforce which is feeling the chilly headwinds of rising unemployment, inactivity and skills shortages. The businesses that can weather this storm in 2023 will be those which apply agility, flexibility and speed – employers need to be filling existing job vacancies as quickly as possible so that they are capable of delivering for today, as well as being prepared for tomorrow’s challenges.

“While job vacancies are contracting, overall levels are still high but this is in large part due to ongoing skills gaps and persistent harder-to-fill roles. The reality is that many organisations are recruiting to maintain business as usual right now, rather than to grow or diversify. It’s proving to be a real challenge for most industries, especially those that are labour-intensive and operating in a low-margin environment, as well as those that are consumer-dependent. While it might seem counterintuitive at this time of uncertainty, businesses that have the capacity to do so would be wise to invest in training and upskilling their staff which will help with their retention and overall productivity of the workforce in the longer term.

“Of course, the immediate focus is on wages which, while they have been rising across the year for most sectors, have fallen in real-terms and are struggling to keep up with high levels of inflation. We’re seeing the impact of this across the public sector and with nurses and rail workers especially, where industrial action has intensified. The challenge for employers is to find ways to sustainably increase wages at this time of uncertainty and high costs. Our anticipation is that this pay pressure will continue into the middle of next year at least, which means that many organisations will need to find short-term solutions as well as negotiate agreeable outcomes for the medium to longer term.“

Lauren Thomas, Glassdoor’s UK Economist, comments:

“Employees appear increasingly concerned about layoffs, with discussion on Fishbowl by Glassdoor up 440 percent year-over-year in November. However, the gap between public perception and employees’ actual experience of redundancies seems to be widening; ONS data shows that redundancies are still below their pre-pandemic average.

“With wages falling in real terms, inflation and economic concerns remain top of mind for employees. Mentions of these terms in last month’s Glassdoor reviews increased over ten times from November 2021. Meanwhile, maintaining staff levels and productivity all while weathering an uncertain economy is the priority for employers.

“One bright spot in the economy is healthcare, which remains a safe haven for workers even as job vacancies in other industries have begun to fall. Between growing demand for healthcare services from an ageing population and an acute shortage of workers, healthcare has historically proven a safe bet for workers looking for stability.”

REC Chief Executive, Neil Carberry, comments on the ONS statistics:

“Today’s data shows businesses and candidates are reacting to the economic situation, but the overall picture remains one of strong demand from employers. With employment and unemployment both rising slightly, and economic inactivity dropping a little, it may be that the long period of growing inactivity through the pandemic is ending. That would be good news for incomes for people returning to the labour market and for economic growth. There is still a lot to do to turn the trend around – employment is still well below pre-pandemic levels, and inactivity well above them. The number of temporary workers continued its recent rising trend – over 1.6 million temps help keep the country on the road, meeting employer needs at a time when labour availability is tight. They are the backbone of our economy, especially in the run-up to Christmas.

“On pay, we can see the private sector responding to the pressure that employees are under from inflation. REC data shows starting rates of pay have been rising strongly for a while now, and it’s clear these trends are now feeding into awards for companies’ existing staff.  Rises appear to be high, without chasing inflation and creating the risk of embedding it further. Given the scale of disputes in the parts of the public sector, and in industries where the government plays a key role, the growing gap between private and public pay awards ought to create space for negotiation if both parties approach negotiations with goodwill.

“The overall picture we see is one of a labour market that is still defined by labour shortage constraining its ability to grow. That’s why businesses need to work with their recruiters on innovative and effective strategies, and all firms are looking to Government to act on some of the barriers – from skills to immigration, and right-to-work checks to employment support, there is a huge amount the Government could do to fire up our labour market.”






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.