More get jobs but vacancies rise, too
Latest official figures show that the number of people in employment in the UK has jumped by more than 290,000 - about 120,000 more than economists had been predicting
19 July 2022Meanwhile, the number of vacancies hit another new record, rekindling calls from business leaders for the visa system to be relaxed to enable industries to bring in badly needed skills.
The Office for National Statistics (ONS) also revealed on Tuesday that, over the second quarter of the year, pay growth including bonuses rose by 7.2% in the private sector, but only by 1.5% in public sector. The highest bonuses were recorded in financial and professional services, and construction.
James Reed, chairman of recruitment company Reed, told BBC Radio 4's Today programme that the UK was seeing the emergence of "a two-speed workforce", with big pay offers being made to people with certain skills.
"So you might be seeing 25% - plus pay offer increases to get people to move jobs. But then we're seeing other parts of the economy where pay hasn't moved much at all and that is concerning because more and more people will end up living in in-work poverty," he said.
The ONS said that the record total of 1.3 million job vacancies continued to rise, albeit at a slower rate than earlier. The increase quarter-on-quarter increase stood at 6,900 between April and June.
Jane Gratton, head of people policy at the British Chambers of Commerce, said: “The labour market remains incredibly tight, in many cases affecting firms’ ability to maintain profitable operations. Although these figures show the employment rate has risen, it is having no noticeable impact on the overall number of job vacancies."
She said the problems in the labour market were restricting growth and "choking off any hope of a recovery for many firms" at a time when inflation, supply chain disruption and energy costs were adding to their problems.
“But there are several avenues open to businesses and the government to shift this data in the right direction," Ms Gratton added.
“We need to bring more economically inactive people back into the UK labour market by offering flexible working practices, rapid re-training opportunities and a focus on workplace healthcare and support.
“The government must also reform the (immigration) Shortage Occupations List criteria to include more jobs at more skill levels to give firms breathing space to train and upskill their workforce."
David Freeman, head of labour market and household statistics at the ONS, accepted that demand for labour was "clearly still very high", even at a time of falling unemployment and with another record low for redundancies. In Q2, the jobless rate was calculated to have fallen 0.1% to 3.8%.
Jonathan Boys, labour market economist at the Chartered Institute of Personnel and Development (CIPD), the professional body for HR and people development, said the data showed that the battle for talent continued but that it could be about to peak soon.
"Vacancy postings were slightly lower in April-June than March-May, but remain at very high levels. On the candidate side, the pool of unemployed and inactive continues to fall," he said.
"Competition for staff is therefore fierce. Redundancies reached a record low of 1.8 per thousand employees, showing that employers are paying just as much attention to retention as they are recruitment.
Kitty Ussher, chief economist at the Institute of Directors, added: "The labour market remains extremely tight, providing opportunities for households and no let-up in the difficulties employers have in recruiting staff. Having said that, there is a suggestion that things might be beginning to settle, with a slowing in the rate of increase in vacancies and the rate of unemployment possibly bottoming out in the most recent data.
“Firms struggling to fill vacancies will also be encouraged by early signs that some of the people that had previously said they did not want a job are now entering the labour market, as shown by the economic inactivity rate falling by 0.4% points on the previous quarter.
“Overall, however, there is nothing in this data that would prevent the Bank of England from continuing to raise rates when it meets in early August.”
Related reading from Relocate Global
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The Office for National Statistics (ONS) also revealed on Tuesday that, over the second quarter of the year, pay growth including bonuses rose by 7.2% in the private sector, but only by 1.5% in public sector. The highest bonuses were recorded in financial and professional services, and construction.
James Reed, chairman of recruitment company Reed, told BBC Radio 4's Today programme that the UK was seeing the emergence of "a two-speed workforce", with big pay offers being made to people with certain skills.
"So you might be seeing 25% - plus pay offer increases to get people to move jobs. But then we're seeing other parts of the economy where pay hasn't moved much at all and that is concerning because more and more people will end up living in in-work poverty," he said.
The ONS said that the record total of 1.3 million job vacancies continued to rise, albeit at a slower rate than earlier. The increase quarter-on-quarter increase stood at 6,900 between April and June.
Jane Gratton, head of people policy at the British Chambers of Commerce, said: “The labour market remains incredibly tight, in many cases affecting firms’ ability to maintain profitable operations. Although these figures show the employment rate has risen, it is having no noticeable impact on the overall number of job vacancies."
She said the problems in the labour market were restricting growth and "choking off any hope of a recovery for many firms" at a time when inflation, supply chain disruption and energy costs were adding to their problems.
“But there are several avenues open to businesses and the government to shift this data in the right direction," Ms Gratton added.
“We need to bring more economically inactive people back into the UK labour market by offering flexible working practices, rapid re-training opportunities and a focus on workplace healthcare and support.
“The government must also reform the (immigration) Shortage Occupations List criteria to include more jobs at more skill levels to give firms breathing space to train and upskill their workforce."
David Freeman, head of labour market and household statistics at the ONS, accepted that demand for labour was "clearly still very high", even at a time of falling unemployment and with another record low for redundancies. In Q2, the jobless rate was calculated to have fallen 0.1% to 3.8%.
Jonathan Boys, labour market economist at the Chartered Institute of Personnel and Development (CIPD), the professional body for HR and people development, said the data showed that the battle for talent continued but that it could be about to peak soon.
"Vacancy postings were slightly lower in April-June than March-May, but remain at very high levels. On the candidate side, the pool of unemployed and inactive continues to fall," he said.
"Competition for staff is therefore fierce. Redundancies reached a record low of 1.8 per thousand employees, showing that employers are paying just as much attention to retention as they are recruitment.
Kitty Ussher, chief economist at the Institute of Directors, added: "The labour market remains extremely tight, providing opportunities for households and no let-up in the difficulties employers have in recruiting staff. Having said that, there is a suggestion that things might be beginning to settle, with a slowing in the rate of increase in vacancies and the rate of unemployment possibly bottoming out in the most recent data.
“Firms struggling to fill vacancies will also be encouraged by early signs that some of the people that had previously said they did not want a job are now entering the labour market, as shown by the economic inactivity rate falling by 0.4% points on the previous quarter.
“Overall, however, there is nothing in this data that would prevent the Bank of England from continuing to raise rates when it meets in early August.”
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Read more news and views from David Sapsted, July articles.
Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
Access hundreds of global services and suppliers in our Online Directory ©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.
