This morning (Tuesday 17 January 2023) the Office for National Statistics (ONS) published its latest labour market update.
The latest employment ONS figures for the period between September and November 2022 show a steady labour market despite ongoing economic pressures.
The highlights for the period show a UK employment rate of 75.6 percent, largely unchanged over the quarter.
The UK unemployment rate was estimated at 3.7 percent, 0.2 percent higher than the previous quarter. The UK economic inactivity rate was estimated at 21.5 percent , a 0.1 percent decrease from the previous three-month period.
HRreview has gathered expert insights into what these figures mean for HR.
TUC General Secretary Paul Nowak said:
“Workers have been losing hundreds of pounds from their annual pay over the last year. But in the public sector, Conservative ministers are dragging their heels on meaningful negotiations. That’s why staff have had no choice but to use their right to strike to defend their pay.
“The Conservative government will not resolve pay disputes by rushing in new laws that attack the right to strike. The best way to settle disputes is around the negotiating table – and with credible pay offers that protect workers from rising prices.”
Responding to the figures, Joanne Frew, Global Head of Employment and Pensions at DWF, says:
Reports are showing that pay is rising at a significant pace but that this is still not enough to counteract the cost-of-living crisis. The ONS figures show that growth in average total pay (including bonuses) and regular pay (excluding bonuses) among employees was 6.4 percent for September to November 2022, the strongest growth rate seen outside the Covid pandemic period. However, soaring prices mean that employees are not feeling the benefit of pay increases. The Bank of England has previously warned that increased wages can lead to inflation becoming embedded. Employers are in the precarious position of juggling demands for increased pay, a competitive labour market and rising business costs.
The UK economy has certainly faced a challenging period, however, recent reports are showing some sign of recovery. In November 2022 the UK economy unexpectedly grew by 0.1 percent, reportedly boosted by increased revenue from the World Cup. Although the growth offers some comfort the labour market is likely to face a continued turbulent period over the next few months.
Neil Carberry, Chief Executive of the Recruitment & Employment Confederation (REC), said:
“Today’s official labour market data confirms the trends that business surveys have been suggesting for some time. Demand for workers is still higher than pre-pandemic, which combines with candidate shortages to make hiring workers a challenge. Slower economic performance and high inflation is starting to slow this trend, but it has not reversed. High inflation and a tight labour market have also fed into higher pay for existing and new staff, a challenge to companies who are facing rising costs across the board. At an unpredictable time, it is also no surprise to see firms dipping into the UK’s world-leading temporary work market for short-term access to key skills.
“For businesses, this report confirms the need to keep investing in getting hiring right because even in a slower economy we are likely to still have a tight labour market. Working with a professional recruitment partner Is an essential part of that. For governments, supporting people into work from inactivity must be a priority – but that must be tied to a wider plan for long-term growth and workforce sustainability.”
ManpowerGroup (UK) Operations Director, Gareth Vale, said:
“Today’s ONS labour market statistics show that the jobs market remains remarkably robust but also reinforces the continued stresses that employers face in finding the talent they need. There is very little sign of the tight UK labour market easing significantly any time soon.
“It is very welcome to see that a further 28,000 people were added to payrolls taking the growth in employment to 880,000 since the start of the pandemic. The slight uptick in the unemployment rate is also no surprise. And the decline in the number of economically inactive – and this being particularly amongst those aged under 24 and those aged over 50 is very welcome – but we need to see this trend continue.
“The pressing challenge is pay. Whilst growth is at a 20-year high, this still represents a real-terms cut as prices continue to outpace earnings creating real pressures for many households. All eyes will be on tomorrow’s inflation figures and hoping for some good news here, with hopes that inflation eases later this year.
“The fight for talent continues for employers – and whilst the number of vacancies may have fallen slightly we know that many employers have to keep hiring just to stand still. This is across every sector and every region. The retention of skilled workers will be the key priority in the months ahead as people are naturally enticed to look around given the high level of vacancies while rising costs are adding extra pressures on many households.
“As such, we’re seeing organisations of all sizes looking into more ways they can retain their workers, not only through notice periods and salaries but also in how they offer better flexible working options. This includes areas such as career progression support, as well as mental wellbeing and physical health.”
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.
