Labour Market Update – October 2023
Labour Market Overview
As a leading provider of human resource solutions across the region we wanted to share with you latest trends and insight for the month of October.
The British Chamber of Commerce has published its latest Quarterly Economic Forecast Q3 2023. It reports that the UK labour market remains very tight, and their recent survey showed that 8 in 10 firms attempting to recruit were facing recruitment difficulties. It is expecting a modest increase in unemployment, peaking at 4.7% in 2024. Average earnings are expected to grow more strongly over the next three years, with 5.5% growth in 2023 and anticipated 3.5% in 2024, and 2.5% in 2005, this is above the forecasts for year-end CPI inflation in the next two years.
KPMG and REC, UK Report on Jobs reported that the demand for staff stabilised in October, following a slight reduction in September. Underlying data highlighted that permanent vacancies fell only fractionally, while the number of temp positions increased modestly. After declining slightly for the first time since February 2021 during September, overall demand for staff stabilised at the start of the fourth quarter. This was signalled by the seasonally adjusted Total Vacancies Index rising from 49.2 to the neutral level of 50.0 in October.
It also reported a strong rise in overall candidate numbers. The October survey data signalled that the overall availability of candidates increased for the eighth successive month. Notably, the respective seasonally adjusted index picked up from 55.5 in September to 59.0 in October, to indicate a sharp and accelerated rate of expansion. Data broken down by candidate type showed that both permanent and temporary worker availability improved sharply.
The KPMG and REC, UK Report on Jobs: North of England reported temp billings fall back into contraction territory in October. After a renewed rise in September, billings received from the employment of short-term staff declined moderately in the North of England during October. The respective seasonally adjusted index fell into contraction territory for the fifth time in the past six months and signalled a modest rate of decline overall. Compared to the other monitored English areas, the North was the worst-performing and the only region to register a deterioration in temp billings in October.
The availability of temporary staff across the North of England increased for an eighth consecutive month in October. Some recruiters noted that a number of candidates were more willing to carry out temp work, while others attributed the uptick in supply to relatively subdued demand for short-term staff among employers. The latest increase in temp worker availability was marked overall.
Vacancies in the North of England continued to increase in October, and at the fastest rates of all four monitored English regions. Recruiters in the North of England registered a sustained improvement in the availability of permanent staff in October, stretching the current sequence of growth to eight months. Anecdotal evidence highlighted that the increase in staff availability was often due to redundancies and company restructuring.
CIPD’s latest survey report on Health and Wellbeing at work found that sickness absence levels are now the highest they have been for over a decade. UK employees were absent for 7.8 days on average over the past year, and two days more than the pre-pandemic sickness absence rate of 5.8 days. As well as an overall increase in absence, it found stress to be a significant factor for both short- and long-term absence, with over 76% of respondents reporting stress-related absence in their organisation in the past year. Key findings:
The top causes of short-term absence are:
- Minor illnesses (94%)
- Musculoskeletal injuries (45%)
- Mental ill health (39%)
Causes of long-term absence are similar:
- Mental ill health (63%)
- Acute medical conditions, such as stroke or cancer (51%)
- Musculoskeletal injuries (51%)
The government has announced that the Department and Work and Pensions is expanding its Youth Offer to provide tens of thousands of young people with support to find work. This will give over 30,000 of 16-24-year-olds the option to access three types of support through the Youth Offer: additional time with a Work Coach early in their claim; access to Youth Hubs; and Youth Employability Coaches. The government has announced that the Department and Work and Pensions is expanding its Youth Offer to provide tens of thousands of young people with support to find work. This will give over 30,000 of 16-24-year-olds the option to access three types of support through the Youth Offer: additional time with a Work Coach early in their claim; access to Youth Hubs; and Youth Employability Coaches.
The October edition of the HMRC’s Employer Bulletin includes important updates on new guidance for employment businesses who use umbrella companies to employ workers and reporting PAYE information in real time when payments are made early at Christmas. Details are included in the link below in the references.
The London School of Economics has carried out a study Is the UK undergoing a “quiet quitting” revolution? Quiet quitting is where workers opt to reduce their efforts and working hours rather than leave a job. The study found that there has been a decline in working hours post pandemic of 36 hours (4.5 days) a year compared to pre-pandemic levels. This has impacted on the post pandemic UK recovery particularly amongst the younger generation. Given the 24.5 million UK full-time, full-year workers, “quiet quitting” equates to an estimated 55.1 million discretionary hours lost to the UK labour market each year between 2020 and 2022, 48 per cent of which are accounted for by Millennials.
The Migration Observatory’s latest briefing on UK Public Opinion toward Immigration: Overall attitudes and level of concern has found that overall views in the UK are divided with 52% thought the immigration numbers should be reduced, but there are fewer people (32%) saying that immigration was a bad or a very bad thing. British people make clear distinction between types of migrant with the highly skilled preferred to unskilled overall and the majority in favour of making immigration easier for health care workers. The Migration Observatory has also published a report on Family Migration to the UK. It found that in 2022, 3.5 million people living in the UK had originally moved to join a British citizen or settled resident. People on family unification visas are more likely to settle long term in the UK than those on work or study visas. Since 2020, dependents of workers and students have significantly outnumbered family unifications migrants.
An updated version of the Employer’s guide to right to work checks was published on 18th October. The significant updates relate to removing the requirement for employers to verify a digital Certificate of Application (CoA) with the Home Office Employer Checking Service (ECS) when conducting a right to work online check involving an outstanding EU Settlement Scheme (EUSS) application made on or after 1 July 2021 and the removal of 28 day Immigration Enforcement notices in respect of EEA citizens which are no longer in use.
References
https://eds6gjavpdk.exactdn.com/wp-content/uploads/2023/09/QEF-infosheet-Q3-2023.pdf
https://www.gov.uk/government/news/124-million-to-help-change-choices-about-work
https://migrationobservatory.ox.ac.uk/resources/briefings/family-migration-to-the-uk/
https://www.gov.uk/government/publications/employer-bulletin-october-2023