15.11.2022

Responses to ONS labour market statistics

The latest statistics released today by the Office for National Statistics (ONS) on earnings and unemployment show that:

The rate of annual pay growth for total pay was 6.0%, and the annual pay growth for regular pay was 5.7%, in July to September 2022; this is the strongest growth in regular pay seen outside of the pandemic period
The UK unemployment rate was estimated at 3.6%, which is 0.2 percentage points lower than the previous three-month period and 0.4 percentage points below pre-pandemic levels

RIFT Tax Refunds

CEO of RIFT Tax Refunds,Bradley Post, commented: "The latest increase in earnings combined with a drop in unemployment makes for welcome reading. But when considered against the current economic backdrop, the reality is that most will still find themselves teetering on the edge of financial insecurity as the rising cost of living swallows any boost to their monthly pay packet.

"When you also consider the impending likelihood of tax hikes in this week’s budget, it’s unlikely that many, if any of us, will be enjoying an actual increase in earnings in the near future.”

APSCo: vacancy drop doesn't mean skills shortages will ease

Responding to the latest labour market statistics from the ONS, Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), commented: "The continued decline in vacancy numbers is no surprise and is indicative of the trends we've seen over the last three months. With ongoing economic uncertainty, recruitment activity will be negatively impacted. However, while this latest data does show a decrease, the number of vacancies remains well above pre-Covid figures, meaning that skills shortages are still prevalent, particularly in the highly skilled labour market."While the upcoming Autumn Statement will hopefully stabilise the market following a turbulent few months across the UK, the issue of a limited workforce does need urgent attention. We have found the new Prime Minister's recent focus on skills and education promising, however there has been too much disruption that has distracted efforts away from the skills agenda. The UK needs urgent action to rebalance skills availability, including a suitable visa route for international highly skilled contractors, a flexible approach to apprenticeships and an Employment Bill that is appropriate in the modern, flexible world of work."

Glassdoor

Glassdoor's UK economist Lauren Thomas outlines some of the findings in the report :

Involuntary redundancies have increased but remain low. News reports and our own data on discussion of redundancies suggest layoffs increased over the last few months. However, many industries are still facing hiring shortages and can simply cut back on hiring in the face of worsened economic conditions rather than resort to layoffs. Increased layoffs are likely to come mostly from industries like tech rather than healthcare and hospitality.
Economic inactivity increased, driven by a rise in long-term illness and continually high numbers of students. The numbers of long-term sick have now reached a record high. Though numbers of students have decreased since last month’s report, they remain higher than earlier this year. In the autumn following the start of the pandemic, the UK saw a large increase in the number of full-time students as a reaction to the covid-induced weak labour market. Though the labour market remains strong, our data suggests public perception has become increasingly negative. This will drive those on the fence to choose education over work.
Vacancies have dropped for the fourth month in a row. Worsening economic instability and a consistent shortage of employees mean that many employers can pull back on hiring rather than laying off current employees, and our data suggests many more employers are implementing hiring freezes. However, in industries like healthcare where shortages are a long time in the making and demand is unlikely to fall much, vacancies have remained high.

And new analysis of Fishbowl by Glassdoor data shows:

Workers are feeling the freeze. In the last year, discussion of hiring freezes have increased by more than 450 percent, though overall mentions are still relatively low.
Employees are increasingly worried - October mentions of layoffs have doubled, discussion of inflation has tripled, and talk of recession has increased nearly tenfold from last October.

Lauren Thomas, Glassdoor’s UK Economist said: “As news of tech layoffs spreads, Glassdoor’s data shows that employees are increasingly anxious with discussion of layoffs doubling and mentions of recession up tenfold from last October. Hiring has also taken a hit, with mentions of hiring freezes up more than 450 per cent.

“However, this isn’t 2008. Unlike the Great Recession, the current shortage of workers is much more acute and even a potential recession would be unlikely to result in the same peak of unemployment as we saw then. There are reasons to be hopeful – vacancies are likely to remain higher and both redundancies and unemployment are lower than before the pandemic.”

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