Labour Market Report – November 2024
Labour Market Overview
The latest ONS Labour Market Overview shows that:
The Social Market Foundation is a cross party think tank and registered charity, their report Recovering the lost workforce explores the barriers that people face getting into work, how these barriers might be addressed and the potential that could be unlocked by doing so. Key findings:
- Over six million people are not employed but wish to work, i.e. 14% of the working population
- If these people were to find employment UK GDP would increase by £454 billion
- Getting a third of these people into work would meet the government target of 80% employment
The Logistics Living Lab (L3) has released a report showcasing how innovative technology can help cut carbon emissions, reduce costs, and improve efficiency in the UK logistics sector. Part of the Made Smarter Innovation | Digital Supply Chain Hub, the project tackled issues like empty truck journeys and rising emissions. A pilot with AF Blakemore & Son Ltd, operators of SPAR convenience stores, achieved:
- 15-30% reduction in carbon emissions
- 37% lower transport costs
- 9% better vehicle fill rates
The project used advanced technologies for secure data sharing, and to match shipments to available truck space across organisations. This shared digital infrastructure allows competing logistics providers to collaborate without one party controlling all the data, leading to smarter scheduling and reduced environmental impact. The UK logistics sector, worth £163 billion, is responsible for 31% of UK transport emissions. With 30% of trucks running empty, the pressure to decarbonise is significant. The L3 project shows how technology can help the sector cut emissions while staying efficient and competitive. The L3 model could be scaled to solve challenges like urban congestion and integrating transport modes like rail and shipping. By using smart tech, the sector can cut emissions, reduce costs, and boost sustainability.
Employment Trends
KPMG and REC, UK Report on Jobs: North of England has reported that permanent hiring activity has declined at sharpest rate since August 2023, as has been the case on a month basis since July last year. There was also a further decrease in the number of people placed into permanent roles across the North of England in November. The rate of contraction was substantial and the second-fastest seen in nearly four-and-a-half years. According to the KMPG’s panel reports there was still some hiring hesitancy following the Autumn Budget. Temp Billings having moderated in October, November survey data pointed to a renewed and marked drop in temp billing across the North of England. The decrease in billings received by recruiters was the most pronounced for just shy of four-and-a-half years and the fastest of the four monitored English regions.
Permanent job openings were down for the first time in nine months. The rate of decrease was solid, the sharpest for 50 months, but the slowest seen by region. On a monthly basis, November’s drop in temp vacancies marked the fourth of the year so far. The rate of decline was the quickest since mid-2020, but slower than the UK average.
Recruiters based in the North of England signalled another marked rise in permanent staff availability in November. The uplift in permanent staff supply was linked by The KMPG’s panel members to a combination of redundancies and greater interest among candidates for new opportunities. The rate of expansion picked up slightly from October and remained stronger than the UK average in November. November survey data highlighted a further rise in the supply of temporary workers across the North of England, as has been the case on a monthly basis since March 2023. An uplift in redundancies was the primary reason behind the latest increase in temp staff supply.
The seasonally adjusted Permanent Salaries Index pushed further above the crucial 50.0 mark in November, thus indicating a faster rise in pay offers to new permanent workers across the North of England. With that, the rate of growth was also the sharpest seen for three months. The local rise in starting salaries for permanent workers was the strongest of the monitored English regions. Recruitment consultancies across the North of England recorded another rise in temp staff pay in November, thereby stretching the current run of inflation to exactly a year. Though only modest and historically subdued, the pickup from October was sufficient enough to mean the North recorded the strongest rate of inflation of the four monitored English regions.
Updates on Legislation and Policy
The Chancellor has announced a £240 million funding boost to accelerate the rollout of local services aimed at reducing economic inactivity and supporting people back into work. The Get Britain Working package includes tailored work, skills, and health support for disabled individuals and those with long-term health conditions. This intervention comes in response to concerning figures showing the UK as the only G7 nation with higher economic inactivity rates than before the pandemic, with 2.8 million people currently out of work due to long-term illness—a factor holding back productivity and stifling economic growth. It will introduce a new jobs and careers service linking jobseekers with employers, with a focus on skills; integrated work, health, and skills plans led by local authorities and a Youth Guarantee ensuring every young person can earn or learn. These initiatives aim to tackle economic inactivity, support those impacted by long-term sickness, and contribute to the government’s goal of achieving an 80% employment rate.
The Director of Labour Market Enforcement, Margaret Beels, has launched her call for evidence for the 2025/26 Labour Market Enforcement Strategy which is due to be delivered to government in March 2025. If you would like to provide feedback on the questions and any relevant evidence that you may wish to highlight, email LMEDirectorsoffice@businessandtrade.gov.uk by 13 December 2024.
Immigration Policy
The Home Office published the number of people who have been returned from the UK from July to the end of October. 9,400 returns were recorded, of which 2,590 were enforced as they had no legal right to remain in the UK. This compares with 2,170 enforced returns over the same period in 2023, an increase of 19%. Of the total returns, 1,520 enforced and voluntary returns were of foreign national offenders (FNOs), this is an increase of 14% compared to 1,330 FNO returns in the same period of 2023.
The latest immigration statistics for the year ending September 2024, show significant decreases in work and student visa applications, reflecting the impact of recent policy changes aimed at controlling net migration. The UK issued approximately 427,000 work visas in the first half of 2024, a 27% drop compared to the 583,000 granted during the same period in 2023. This reduction is largely attributed to stricter visa regulations, including higher salary thresholds for skilled workers and changes in eligibility criteria.
Between January and October 2024, 359,600 Sponsored Study visas were issued, a 16% decrease compared to the same period in 2023. The decline follows policy changes introduced in January 2024, which restrict most international students from bringing dependents unless they are postgraduate researchers or recipients of government-funded scholarships. Applications from dependents of students dropped significantly, with only 19,100 applications recorded during this period—a decrease of 85%. The government has stated that these measures aim to reduce net migration while ensuring the education sector remains competitive.
Commentary
Maria Miller – Operations Director (Maria.Miller@gempartnership.com)
GEM are looking forward to working with our clients advising on all forthcoming changes initiated from the Employment Rights Bill and associated policy changes, impacting our industry sector. As a training provider we are also working with all relevant governing bodies to stay at the forefront of changes by Skills England. GEM hold direct funding and are able to support with a range of upskilling and staff development programmes to aid your workforce development.
I would welcome the opportunity to discuss the changing landscape with you and outline the support and programmes we offer that can enhance your People plans.
References
https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment
https://www.smf.co.uk/publications/recovering-the-lost-workforce/