UK unemployment hits 1975 low which may intensify 'war for talent'

UK unemployment was at its lowest level since January 1975 in the three months up to October 2019, which can intensify the “war for talent”.

This is according to Robert Half,  as the Office for National Statistics (ONS) reported that the unemployment figure fell by 13,000 to 1.281 million.

The employment rate has risen to 76.2 per cent, meaning an increase of 24,000 people in work giving a total number of 32.8 million individuals in work.

Matt Weston, managing director, Robert Half UK said:

The UK labour market has been characterised by a competitive hiring environment over the course of 2019, with today’s statistics highlighting that employment rates remain at record levels. As such, we expect the buyer’s market – where in-demand professionals are often receiving multiple offers – to continue into 2020.

This ‘war for talent’ places the onus on employers to review their talent attraction and retention strategies. Skilled professionals today are looking for more than just a competitive remuneration package – flexibility, development opportunities and company culture are increasingly valued when reviewing an offer.

It’s also worth noting that professionals are forming their opinions on the role from the very start of the job application process, through to the interview process and offer stage. Therefore, employers who are able to create a positive recruitment experience – as well as an attractive offer – will be able to hire the industry’s leading talent.

Professionals have given warnings to the Government regarding their next steps in which they should take following this news and Brexit.

Gerwyn Davies, senior labour market adviser for the CIPD said:

Employment has reached a record high but employment growth has significantly slowed following a period of sharp growth. Despite the recent slowdown, the jobs market remains tight.  It’s imperative that the Government’s post-Brexit immigration policy does not impose unreasonable restrictions on employers given the prevalence of skill shortages. In particular, it’s essential that the introduction of an Australian-style points-based system prioritises employers’ skills and labour needs.

Growth has slowed to a trickle in many sectors apart from health and public administration, which continues to see relatively strong growth.  In contrast, employment levels are continuing to fall in some consumer-facing sectors such as construction and retail.  The encouraging news is that these sectors look set to benefit most from the continued rise in real wages and more political certainty.

Neil Carberry CEO at the Recruitment & Employment Confederation (REC), said:

These figures show why the government needs to be focused on making great work happen. Uncertainty before the election took its toll, with the gentle slowdown we have seen in the jobs market over the past few months continuing, led by a 10 successive month of falling vacancies. Taking a longer-term view, we should remember that overall performance is strong. And a lot has changed since this data was collected. It remains to be seen if the clarity the election result has delivered will translate into businesses launching the ambitious hiring plans they have been cautiously putting on hold, as our data has shown for many months.

The Government shouldn’t wait for confirmation of this to get on with the task of supporting businesses to grow. Keeping the campaign trail promise to review IR35 changes swiftly would be a great start – the reform should not go ahead until it can be effectively delivered and that will not be in 2020. A sensible plan that avoids a no-deal Brexit must be delivered in 2020 with long-term trading arrangements in place for the UK’s world leading services sector, as well as manufacturing.

The biggest challenge to growth is continuing skills shortages. Productivity hinges on government’s ability to address this. One huge opportunity is to open up the apprenticeship levy to the millions of people who choose flexible work.  For the sick to be treated, for homes to be built, and for food to be produced, the UK also needs an immigration system that meets employers’ needs for skills at all pay-levels.

Lee Biggins, founder and CEO of CV-Library believes with this news and the Conservative majority win, the job market may pick up in time for January 2020 which usually sees a high level of recruitment.

Mr Biggins said:

It’s clear that uncertainty surrounding the general election and our future in the European Union has affected employers’ ​confidence, with many putting their hiring plans on hold over the past few months. Indeed, our own data supports this, with job vacancies dropping by 11.8 per cent month-on-month in November.

Now that the Conservative party has a dominating presence in Parliament, we can expect some serious movement with Brexit ​and hope that the job market will pick back up again in time for the new year; especially as January is usually a busier time for recruitment.