Unemployment rates in the UK fell by 97,000 to 1.86 million in the three months to December 2014, the Office for National Statistics announced today.
While the unemployment rate has continued to fall, experts warn that celebrations may be premature, with several noting that youth unemployment is still too high.
John Cridland, CBI Director-General, said:
“The recovery is now established and businesses are continuing to create more full time jobs.
“While it’s good to see unemployment falling we still need to see more young people finding roles, especially those that help them develop their skills and progress up the earnings ladder.
“Pay growth is now well ahead of inflation, and a focus on improving productivity from businesses will help keep this on track.”
Chris Jones, Chief Executive, City & Guilds Group, added:
“Youth unemployment is still too high. Countless young people are caught in the vicious cycle of trying to find work to gain experience, but needing experience to find work.
“That’s why we need programmes that help young people get the skills employers want. A great example is apprenticeships, and it’s no wonder that politicians are promising millions more in the run-up to the election. Efforts to expand access to them is certainly welcome, but apprenticeships are only one part of the solution.
“We need to see long-term planning that links skills to economic forecasts, greater coherence between central and local government and more stability in the skills and employment system. Our young people’s futures depend on it.”
Michael Mercieca, CEO of Young Enterprise, agreed that young people should be learning the kinds of skills that will make them invaluable employees:
“While overall unemployment is falling, this doesn’t tell the whole story. Youth unemployment is still triple the headline rate at 16.2 per cent. To avoid more young people falling into the highly damaging unemployment trap, immediate action is needed.
“We must equip our young people with skills such as communication, teamwork, creativity, problem-solving and resilience; readying them for the challenges, opportunities and responsibilities that they will encounter post education. We are blessed with some of the finest teachers in the world and an abundance of bright, youthful talent, but there still exists a huge disconnect between the education system output and the business world’s intake. The ongoing 700,000 unfilled vacancies proves this. We have been leaving the youth behind for far too long, and we have the opportunity now to change this to create a society of opportunity for everyone.”
Jim Hillage, IES Director of Research, commented that these statistics highlight the increasing concern of skill shortages:
“There is now a higher proportion of people in work than at any time since records began in 1971. The demand for labour is therefore still strong, with full-time employment up and signs of under-employment falling, with falls in both involuntary part-time employment and self-employment.
“However as the labour market appears to normalise, there are signs that labour supply is failing to keep pace with the rising demand.
“Unfilled vacancies have risen strongly, and as unemployment falls there are now only an average of 2.6 people chasing each available job, compared with over five two years ago. The strong demand for labour can also be seen in the rise in average earnings which are now increasing far faster than prices. Both these are portents of increasing skill shortages which could hamper economic growth in the months ahead.”
Richard Shea, Managing Director, EMEA Search at Futurestep felt that, in order to make the most of this decrease in unemployment, HR departments should be focusing on innovative practices in recruitment to secure the best talent:
“Latest UK employment figures have revealed a decline in the number of people out of work, reflecting employment is on the rise. In order to keep abreast of this wave, as the economy continues to strengthen, organisations must ensure they are streamlining their recruitment and talent management strategies to support their long-term business development goals.
“Preparing to fill the roles required in the future is vital. Best in class talent acquisition teams will be prepared with refreshed job profiles that look, not only at the skills and experiences but, at the competencies, traits and drivers that will find talent that is a fit for the current job but also for the business. Having the right recruitment tools and technology in place will also make the process fast and efficient when the time comes to hire. For example, to accommodate a marketplace that is constantly switched-on, organisations should be utilising the power and capability of mobile devices to recruit candidates. Additionally, even if businesses are not ready to hire right now, they need to ensure they have a pipeline of potential employees that they can engage and tap into, to find the right candidate for the job when needed. Talent communities play a significant role here.
“Strategies for attracting candidates must be fully developed too. A recent study, the Innovation Imperative*, showed that demonstrating innovative practices can have a huge influence when recruiting new staff. With the ONS reporting average earnings including bonuses were up 2.1 percent in the quarter, compared with a year earlier, companies need to look at initiatives beyond financial incentives in order to attract the best. From flexible working schemes for a better work-life balance and increased holiday allowance to robust career development programmes and creative working environments, employers need to communicate the benefits associated with their brand.
“Good talent will contribute to short, medium and long term business success. To make the most of the UK’s jobs-led recovery, organisations need to understand what employees want and then engage with their needs.”