Estimated number of vacancies declined
The UK employment rate saw an increase in the March to May 2023 period, reaching an estimated 76.0%, up by 0.2 percentage points from the December 2022 to February 2023 period. The rise in employment was primarily driven by part-time employees, according to recent data.
However, the estimate of payrolled employees for June 2023 showed a monthly decrease, with 9,000 fewer employees compared to the revised May 2023 figure. The provisional estimate of payrolled employees in June 2023 is subject to revision once more data is received next month.
Meanwhile, the unemployment rate for the March to May 2023 period increased by 0.2% to 4.0%. The rise in unemployment was primarily due to individuals who had been unemployed for up to 12 months.
On a positive note, the economic inactivity rate decreased by 0.4% in the March to May 2023 period, reaching 20.8%. The decline in economic inactivity was largely driven by individuals who were inactive for other reasons, such as those looking after family or home, as well as retirees.
The changes in employment, unemployment, and economic inactivity rates during the latest quarter were primarily attributed to men.
In April to June 2023, the estimated number of vacancies experienced a decline of 85,000 compared to the previous quarter, bringing the total to 1,034,000. This marks the twelfth consecutive quarter of decreasing vacancies.
In terms of average total pay growth, including bonuses, there was a notable increase of 6.9% in the March to May 2023 period. Similarly, regular pay growth, excluding bonuses, reached 7.3% during the same period. This level of growth in regular pay equals the highest growth rate observed last month and during the COVID-19 pandemic period in April to June 2021.
However, in real terms adjusted for inflation, both total pay and regular pay experienced a decrease on a yearly basis in the March to May 2023 period. Total pay fell by 1.2% and regular pay fell by 0.8%.
Finally, the number of working days lost due to labour disputes in May 2023 was 128,000, marking the lowest figure since July 2022.
Michael Stull, Director at ManpowerGroup UK, commented: “The gradual decline of vacancies overall and slight rise in the unemployment rate to 4.0%, contrasts with a very strong hiring intent that we’re seeing from employers in nearly every sector and across all parts of the UK. It brings home the reality of the talent shortages reported by 80% of UK employers, with skills development now a critical longer-term priority that will help put the economy back on track.
Added to this, questions continue to be raised over whether people are typically more productive at home or in the workplace as the debate around hybrid-working best practice rumbles on. It’s causing a lot of anxiety for both employers and employees who each have their own ideas about what ‘good’ flexibility should be.
“In such a tight labour market consisting of many workers who are set on pursuing career progression – whether that’s by acquiring new skills, earning more money, or finding the most suitable work-life balance – many businesses are understandably reluctant to draw a line in the sand and risk losing out to competition. But employers need to be crystal clear about their expectations are, treating their workers as an asset and with convincing and compelling reasons outlined for when employees are expected to be in the workplace.
“Firm and fast decision-making is advised in any case. Speed is a big determinant of success in the current labour market and those organisations that are quicker to assess and interview candidates will gain a significant advantage .”