The Office of National Statistics (ONS) released its Labour Market Overview for the period May – July 2019, yesterday (10th September) with the majority of bodies and businesses taking the same view, celebrating the fact that the employment rate in the UK is at a record high but worried regarding the number of vacancies which are continuing to fall.
The employment rate is at 76.1 per cent, the joint-highest number on record since comparable records began in 1971. The unemployment figure also came in at 3.8 per cent, the lowest since October to December 1974.
The ONS also reported that the rate of pay growth has been trending upwards since mid 2017. However, the number of vacancies continues to fall, and now stands at 812,000 – 33,000 fewer than a year earlier.
Jon Boys, economist at the CIPD, said:
It’s good news all round with pay continuing to grow and employment remaining at a record high.
Although just shy of the pre-crash peak, pay continues to outstrip inflation putting more money in people’s pockets.
However, this strong pay growth is largely being driven by labour shortages in sectors like construction. For this to continue in the long-term, businesses must improve their productivity. It’s also essential that they look at how they recruit, manage and develop their workforce given our uncertain political climate right now.
The Recruitment & Employment Confederation (REC) echoed this feeling that these are mixed results. They did add that a no-deal Brexit must be ruled out in order for parts of the job market to recover.
Tom Hadley, director of policy and campaigns at the REC said:
The UK’s labour market has been a key part of our economic success, and as today’s figures show, it remains in a strong position with a joint-record high rate of employment. But we cannot take this for granted. Business confidence is low, vacancy numbers are down and our own data shows that the continued uncertainty is starting to have an effect on placements. The Government must rule out a no-deal Brexit and help businesses carry on creating jobs and opportunity for people all over the UK.
Lee Biggins, CEO at CV-Library took a more negative view as he focused on the fact job numbers are continuing to drop.
Mr Biggins said:
The ONS Labour Market statistics released this morning reveal that job numbers are continuing to fall, with our own data showing that advertised jobs dropped by 3 per cent in June. And, whilst the record employment rate is something positive to shout about, it doesn’t bode well for business’ hiring efforts.
In fact, companies have been forced to hike up their salaries in a desperate attempt to attract candidates; something smaller businesses won’t be able to keep up with.
Matt Weston, managing director of Robert Half, a specialised recruitment consultancy believes the falling jobs advertised will increase the ‘war on talent’.
Mr Weston said:
The growing technical skills gaps is something that businesses will need to address as they look to widen and secure their talent pool to drive their organisation forward. As ‘the war for talent’ intensifies against the backdrop of Brexit and a lack of specialised skillsets, companies must adopt a flexible approach to their hiring strategy by tapping into the pool of highly-skilled interim professionals. This will not only allow companies to plug their most pressing skill-gaps in the short-term, but will also help upskill and train permanent staff in the long-term, as companies prepare for tomorrow’s challenges.