Labour Market Update – May 2023

30/5/23

Labour Market Overview

May has been an eventful month, as the nation watched the coronation of King Charles III and Queen Camilla with celebrations across the country, as well as 3 bank holidays. There has also been some slight changes within the labour market. The latest ONS Labour Market Overview reported:

3.9% or 1.33 million people were unemployed; 23.5% have been unemployed for more than 12 months and a 0.1% increase on previous quarter.
Employment rate increased slightly to 75.9%
8.73 million people are economically inactive, 156,000 lower than the last quarter, driven by part time and self-employed workers.
Economically inactivity is still 361,000 higher than pre-pandemic levels, and 586,000 are classified as long term sick but want to have a job.
Record high movement of people out of economic inactivity into employment.
Vacancies fell again to 1.08 million, the tenth consecutive quarterly fall. The number of unemployed people per vacancy was 1.2.
The number of payrolled employees fell for the first time since February 2021 down 136,000 to 29.8 million.
Growth in total pay was 5.8% and regular pay was 6.7% and they fell in real terms by 3% and 2% respectively.
5.9 million people were claiming Universal Credit, of which 1.44 million were searching for work.
Redundancies fell to 2.8 per thousand employees and is lower than pre-pandemic levels.

The latest REC Labour Market Tracker revealed that job adverts remain at high levels despite inflation concerns. There were 189,832 new job listings in the week 17-23 April, which was 31.8% higher than the week before, as companies returned to hiring after the Easter break. There are more than 1.4 million active job adverts.

KPMG and REC, UK Report on Jobs: North of England, reports that the North of England continued to record the strongest rise in both temporary and permanent types of job vacancies across the monitored English regions in April. However, there was another slowdown in the rate of permanent job vacancy growth in the North of England during April, continuing the trend which started in the previous survey period. In fact, the increase in permanent job openings was the slowest since February 2021. On the other hand, demand for temporary staff rose at a faster pace.

The Resolution Foundation has published two new reports that impact on the labour market. The first one the Labour Market Outlook Q1 2023 which focuses on a longer-term issue of the decline in workplace training, and the impact on low-paid workers. The second being Growing, but for how long? which looks at how the labour market has grown since Covid and how sustainable this is due to inactivity among the over 50s and long-term illnesses remains stubbornly high, there continue to be signs that firms’ demand for workers is cooling, and average pay, despite growing fast in cash terms, continues to fall in real terms.

ONS report on the Motivations of those aged 50 to 65 years leaving work during the coronavirus (COVID-19) pandemic in Great Britain from March 2020, why they left and whether or not they intend to return. Based on adults aged 50 to 65 years in Great Britain (GB) who have left or lost their job since the start of the coronavirus (COVID-19) pandemic and not returned to work was due to:

The majority (66%) owned their homes outright, and were more likely to be debt free (61%) compared with those who left their job since the pandemic and returned to work (42% debt free).
Financial resilience varied by age: those aged 50 to 54 years were significantly less likely to be debt free, excluding a mortgage (49%), compared with those aged 60 to 65 years (62%), and more likely to have credit card debt (39%, compared with 24%).
More than half (55%) of those aged 60 to 65 years were confident or very confident that their retirement provisions would meet their needs, compared with just over one-third (38%) of those aged 50 to 54 years.
Age was also a factor when considering whether to return to work; the younger cohort were more likely to say that they would consider returning to work (86% for those aged 50 to 54 years, 65% for those aged 55 to 59 years and 44% for those 60 to 65 years).
Adults aged 50 to 59 years were more likely to report mental health reasons (8%) and disability (8%) as a reason for not returning to work when compared with those aged 60 to 65 years (3% and 3%, respectively).
Adults aged 50 to 59 years (14%) were also more likely to be currently looking for paid work, compared with adults aged 60 to 65 (6%).
Among those who would consider returning to work (58%), the most important factors when choosing a paid job were flexible working hours (32%), good pay (23%), and being able to work from home (12%).
Among those currently in work, access to support may be a factor in retaining the workforce with those who have never left the workforce more likely to have access to employer support than those who left work.
Around 1 in 5 (18%) said they were currently on an NHS waiting list for medical treatment; this rose to 35% for those who left their previous job for a health related condition.

To support the labour market, Jobcentre Plus has produced a short video: How Jobcentre Plus can help you recruit which explains the services they have to offer and how they can support employer’s recruitment campaigns.

The Telegraph reported that net migration is on track to be as high as one million when figures are released later this month. This will surpass the previous peak of 504,000 in the year to June 2022. The surge is fuelled by a continued sharp increase in non-EU migrants entering the UK to study, work or escape conflict or oppression.

References
https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment
www.youtube.com/watch?v=wB9O2rMPMNQ
https://www.rec.uk.com/our-view/news/press-releases/labour-market-tracker-job-adverts-remain-high-levels-despite-inflation-concerns-rec
https://www.resolutionfoundation.org/publications/labour-market-outlook-q1-2023/
https://www.resolutionfoundation.org/comment/growing-but-for-how-long/
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/reasonsforworkersagedover50yearsleavingemploymentsincethestartofthecoronaviruspandemic/wave2
https://www.telegraph.co.uk/politics/2023/05/11/net-migration-million-home-office-government-conservative/

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