Labour Market Update – June 2024
Labour Market Overview
The latest ONS Labour Market Overview show that:
- UK unemployment rate increased again to 4.4%, 1.510 million people unemployed
- Unemployment amongst young people remains high, particularly the youngest age group (aged 16-17 = 27.2% / aged 18-24 = 11.8%)
- Employment rate was largely unchanged at 74.3%, 32.96 million people employed
- UK economic inactivity rate was slightly up on the last quarter at 22.3% and higher than 12 months ago. The quarterly increase was largely due to those aged 50 to 64 and the annual increase was mainly due to 16 to 24 year olds.
- 43 million people are economically inactive, an increase of 385,000 on last year and 883,000 higher than pre-pandemic levels.
- Vacancies fell again to 904,000, the 23rd period fall, down 12,000 from previous quarter, but higher than pre-covid levels. This means there were 1.7 unemployed people per vacancy in February 2024 to April 2024, an increase from the previous quarter due to falling vacancy numbers and rising unemployment.
- Payrolled employees for May 2024 were 30.32 million, a rise of 0.6% compared to last year. This is a rise of 167,000 over the last 12 months. 1.29 million higher than pre-pandemic levels.
- Annual growth in regular pay without bonus increased by 6.0%, and with bonus by 5.9%. Adjusted for inflation, annual growth regular pay was 2.3% and total pay was 2.2%.
- Claimant count increased by 35,200 on the month and 100,2000 on the year to 1.629 million. This is the measure of those receiving benefit principally due to being unemployed.
- Redundancies decreased to 3.4 per thousand employees, 0.2 higher than last year.
People Management reports that a quarter (27 per cent) of workers in the UK plan to change jobs within the next six months. The poll of 12,000 people in the UK aged 18 to retirement age found that these figures are rising – just 24 per cent planned to move jobs within the next six months this time last year, dropping as low as 22 per cent in 2022 and 19 per cent in 2021. However, in January 2020, 26 per cent said they were planning to change jobs, exceeding their pre-pandemic levels
The Centre for Ageing Better reports that the new government could boost the UK economy by up to £9bn annually by ensuring equal opportunities for older workers in the labour market. The charity’s calculations reveal that closing the employment rate gap between older and younger workers could also bring an additional £1.6 billion a year in income tax and national insurance contributions to the Treasury.
The Centre for Ageing Better urged all political parties on the run up the election to pledge to raise the employment rate of workers aged 50-64 to 75% by 2030 through its new 50+ Employment Commitment. Achieving this goal would mean approximately half a million more 50-64-year-olds in employment. Older workers currently get poorer opportunities and outcomes when it comes to finding work, receiving employment support, facing redundancy or receiving training.
The 50+ Employment Commitment highlights current labour market imbalances affecting older workers, such as:
- A 14 percentage point employment gap between those aged 25-49 (85%) and those aged 50-64 (71%).
- People in their 50s and 60s are nearly twice as likely to become long-term unemployed compared to younger adults once out of work.
- Only one in ten people aged 50-64 who are out of work engage in back-to-work support, with significantly worse outcomes than the all-age average.
- Almost one in three workers aged 50-70 who left their jobs during the pandemic report experiencing age discrimination when seeking new employment.
- Over half a million people aged 50-65 in the UK want to work but are not currently employed.
Employment Trends
The KPMG and REC, UK Report on Jobs: North of England latest report highlights that the permanent jobs market has worsened with the preference shifting to temporary staff. There was a sharp drop in the number permanent placements registered by recruitment agencies in the North of England in June, thereby extending the current downturn to a year. However, in contrast, recruiters in the North of England posted a rise in billings for temporary staff in June, marking the second increase in successive months. Firms are reportedly relying on temporary staff and more hesitant to commit to permanent contracts.
Candidates looking for permanent and temporary work has continued to rise. The number of candidates looking for permanent roles increasing again is thought to being in part due to redundancies. Others in surveyed stated this was due to job seekers not being suitably skilled. The survey data also pointed to a further increase in the supply of temporary workers, according to recruiters in the North of England. The rise in temp staff availability was the fastest seen for just shy of a year and steep overall. Survey respondents noted that demand for short-term staff had also picked up.
Hourly rates of pay across the UK rose again in June, thereby marking 40 months of successive increases. UK temp rate inflation was solid having slowed for a second month in a row. All four monitored regions of England posted upticks in hour pay, the fastest of which was in the North of England. Total employee earnings (including bonuses) rose at an unchanged annual pace of 5.9% in the three months to April, according to the latest data from the Office for National Statistics (ONS).
Immigration Policy
The government has published the latest immigration system statistics for the year ending March 2024:
- 5 million arrivals, 13% more than the previous year
- 4 million entry clearance visas granted, 7% higher than before the pandemic. 59% were visitor visas
- 315,018 work visas granted, 130% higher than pre-pandemic levels
- Skilled Health and Care visas provided most of the growth with 118,522 grants
- 290,246 dependents were granted a work visa, 55% higher than 2023
- First quarter of 2024 saw 75% fewer Skilled Worker Health and Care visas granted
- 139,175 graduate route extensions were granted for the main applicant, 49% higher than the previous year
The Resolution Foundation latest briefing Life in the slow lane found that the population grew by 0.7 per cent per year between 2010 and 2023, equivalent to 6 million more people. This was the fastest rate of population growth for a century, and three-quarters of it was driven by migration, with the 0.5 percentage point contribution, the biggest in any 20-year period on record.
References
https://kpmg.com/xx/en/home/insights.html
https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment
https://www.labourproviders.org.uk/access-to-labour-2/
https://www.resolutionfoundation.org/app/uploads/2024/06/Life-in-the-slow-lane.pdf