12.03.2024

Employment recovery continues to falter

Employment recovery continues to falter, with over half a million more people out of work than before the pandemic despite nearly a million unfilled jobs.
Largest rises in worklessness for those aged under 25 and over 50, reiterating need for employment services to reach people further from work

Commenting on today's latest Labour Market overview from the Office for National Statistics, Tony Wilson, Director at the Institute for Employment Studies said: “Today’s jobs figures show that the labour market remains pretty subdued. The employment rate is broadly flat but still about one percentage point below where it was before the pandemic, even though unemployment has fallen back to where it was. So as has been the story in previous months, there are fewer people in work because there are more people outside the labour force altogether – not looking or not available for work. In all, there are well over half a million more people out of work than before the pandemic began. This is being driven by more young people and older people outside the labour force, and in particular because of more people reporting long-term health conditions that stop them from working.

“In our view this is holding back the recovery as the economy is continuing to create jobs, with nearly a million unfilled vacancies reported today. This reiterates that we need a different approach to how we reach and engage with people who are out of work and may want to come back to work, and in particular our employment services need to be more accessible, inclusive and supportive. Employers need to play their part too, and do more to keep people in work and to open up opportunities for those who may need more support.”

Businesses turning back to permanent hiring, but inactivity rates of 16–24-year-olds concerning

Also responding to the latest Labour Market data, Janine Chidlow, Managing Director at WilsonHCG - leading global talent solutions provider - is warning employers against complacency in their talent attraction and retention strategies:

She said: “There may be continued speculation around the validity and quality of the data being published by the ONS, but they are overall showing a decline in jobs that many businesses and hiring teams are noting. Indeed, our own data (powered by Claro) does show similar trends with job postings decreasing from 791,800 in January 2024 to 719,000 in February 2024, a drop of 9.2%. The average job postings for Q1 2024 so far stand at 755,400, which is lower than both Q4 and Q3 2023 averages, indicating a continued downward trend.

“However, it’s important to look at the full details to ascertain a more accurate picture of the labour market. According to the ONS, the decline in the employment rate noted in the last quarter has been driven by a fall in part-time workers, while those in full-time work increased on the quarter and the year. This suggests that business confidence has shifted slightly, with employers now investing in increasing their permanent headcount following an increased reliance on temporary resources as economic uncertainty grew towards the end of last year.

“What does remain a concern from the latest statistics is the economic inactivity rates of those aged 16-24 years which is now at the highest levels reported in the last four years. With skills shortages rife – particularly in STEM remits – the UK simply cannot afford to have such a significant level of inactivity from the emerging demographic. More needs to be done to encourage these potential workers into meaningful employment that will add to core skills in the UK, or we could soon face a skills deficit on a more significant scale that will only have a detrimental effect on businesses and the economy.”