Tag: unemployment

Unemployment falls by 0.2%

According to the ONS’s latest labour market overview, the UK employment rate remained largely unchanged for July to September 2022 was 75.5%, and 1.1% lower than before the COVID-19 (December 2019 to February 2020). The data revealed that over the latest three-month period, the number of employees decreased, while self-employed workers increased.

Payrolled employees for October 2022 shows another monthly increase, up 74,000 on the revised September 2022 figures, to a record 29.8 million whilst the unemployment rate fell by 0.2% for July to September.

The big news of the week has been confirmed with the report stating that economic inactivity rate increased by 0.2% on the quarter to 21.6% in July to September 2022. During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high. In a recent article published by the ONS explored the economically inactive because of long-term sickness in more detail. It showed that over two-thirds of those becoming long-term sick in 2021 and 2022 were already economically inactive for another reason in the three months before interview.

Vacancies for August to October 2022, fell by 46,000 on the quarter to 1,225,000 but despite four consecutive quarterly falls, the number of vacancies remain at historically high levels. An increasing number of businesses are now reporting holding back recruitment because of economic pressures.

According to the report, growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.7% among employees in July to September 2022. This is the strongest growth in regular pay seen outside of the coronavirus pandemic period.

Average regular pay growth for the private sector was 6.6% in July to September 2022, and 2.2% for the public sector. Outside of the height of the coronavirus pandemic period, this is the largest growth seen for the private sector and the largest difference between the private sector and public sector.

In real terms (adjusted for inflation) over the year, total pay fell by 2.6% and regular pay fell by 2.7%. This is slightly smaller than the record fall in real regular pay reported in April to June 2022 (3.0%), but remains among the largest falls in growth since comparable records began in 2001.

Joanne Frew, Global Head of Employment & Pensions at DWF commented: “The latest ONS figures show a steady labour market despite the UK’s ongoing economic struggles. The UK economy is certainly facing a challenging period with soaring inflation and the Bank of England warning that the UK could be set for its longest recession since records began.  The Chancellor, Jeremy Hunt, is due to deliver his Autumn Statement on Thursday 17 November and has already warned that tax rises are necessary to help tackle inflation.  Against this backdrop it is likely that the labour market will face a relatively turbulent time.  Despite the ongoing resilience of the market during the pandemic, it is likely that the economic difficulties will lead to more job losses over the coming months.”

Bev White, CEO of Nash Squared said: “Despite Big Tech recently putting a freeze on their recruitment plans or even shedding jobs, today’s ONS jobs figures show that UK Tech continues to buck this global trend by adding a further 92,000 jobs over the last quarter, and firmly cementing itself as the UK’s standout private sector job creator over the last three years – with almost 350,000 additional jobs created.

“This performance is even more startling when you consider that we’ve lost over three quarters of a million private sector jobs over the same three-year period in the UK.

Despite the downturn, there is little sign of a tech slowdown. Tech investment in the UK is expected to hit its third highest level for more than 15 years and over half (56%) of digital leaders running tech departments in the UK plan to increase their technology headcount this year.”

Lauren Thomas, Glassdoor’s UK Economist also commented: “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 percent.

“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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The latest ONS labour market figures remain stable

The highlights of the period between June and August 2022 show an employment rate of 75.5%, 0.3% lower than the previous quarter. The UK unemployment rate was estimated at 3.5%, 0.3% lower than the previous quarter and the lowest rate since 1974.  It is worth noting that the previous quarter (March to May 2022) had a notably higher employment rate than other recent periods meaning that the employment rate drop appears more significant.

The number of job vacancies in July to September 2022 was 1,246,000 a reduction of 46,000 from April to June 2022.  Vacancies fell by 3.6% in July to September and is the third consecutive fall.

Joanne Frew, employment law expert and Interim Global Head of Employment & Pensions at DWF, commented: “Although the so called ‘Great Resignation’ remains an issue for many employers, these figures indicate that the labour market is starting to slow down after a particularly volatile period.

“It will be interesting to see what impact the change of government may have on the labour market. With all EU-derived employment law under review following publication of the Retained EU Law (Revocation and Reform) Bill and suggestions that the Government may be considering introducing “no fault dismissals” for higher earners, many employees may feel more hesitant to move jobs until it is clear what impact the new bill may have on workers’ rights.

“The ONS figures show a fall in regular pay by 2.9% for the period between June and August 2022. With the cost of living crisis biting, employers will need to consider new and innovative ways to help support their workforce during this difficult period – from increased flexibility to help reduce childcare costs to one off bonuses (where financially possible) to help with rising costs.”

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But less optimistic about finding new jobs: New York Fed

According to the Federal Reserve Bank of New York’s Center for Microeconomic Data’s Survey of Consumer Expectations, consumers’ expectations for inflation substantially declined in July, but they were less optimistic about their ability to find a new job in the next three months.

Reports revealed that the median inflation expectations for one year ahead fell to 6.2% in July from 6.8% in June. The decline was broad-based across income groups but largest among respondents with annual household incomes of less than $50,000 and no more than a high school education.

Looking at the labor market, median one-year-ahead earnings growth remained unchanged for the seventh consecutive month in July at 3.0%.

Mean unemployment expectations — or the mean probability that the US unemployment rate will be higher one year from now — fell by 0.2 of a percentage point to 40.2% in July.

The mean perceived probability of losing one’s job in the next 12 months declined slightly to 11.8% in July from 11.9% in June. It remained below its pre-pandemic reading of 13.8% in February 2020.

The mean probability of leaving one’s job voluntarily in the next 12 months rose to 19.5% in July from 18.6% in June. The series has moved within a narrow 18.6% to 20.4% range over the past year.

Meanwhile, the mean perceived probability of finding a job in the next three months (if one’s current job was lost) declined to 55.9% in July from 56.8% in June, moving slightly below its trailing 12-month average of 56.5%.

The report draws data from an internet-based survey of a rotating panel of approximately 1,300 household heads.

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Inflation is at a 40-year high at 9.1%

The latest data from the Office for National Statistics (ONS) has revealed that the UK’s unemployment and economic inactivity rates have decreased from March to May 2022 and is exacerbating the already critical talent shortages. In response, AMS (formerly Alexander Mann Solutions) has urged businesses to place more emphasis on internal hiring strategies.

The ONS data also revealed that, when adjusted for inflation, total pay fell by 0.9% and regular pay fell by 2.8% in the three months to May, which is certainly cause for concern given that CPI inflation hit a 40-year record of 9.1% in May and is expected to reach as high as 11% later this year.

Steve Leach, Managing Director, UK & Ireland, at AMS commented: “With unemployment and economic inactivity rates on the decline, it’s inevitable that the skills gap will continue to widen. Rather concerningly, the ONS statistics also reveal that wages are dropping when adjusted for inflation. With firms seemingly no longer using financial incentives to attract and retain talent, greater reliance on other skills strategies will be needed.”

“In my opinion, a lot of firms are overlooking a significantly valuable source of skills: their current talent. Identifying where internal mobility opportunities lie provides an opportunity for individuals to progress their career and move into higher salary brackets, which will not only help with filling the skills gap but also aid staff retention rates, particularly during the cost-of-living crisis.”

“As many talent acquisition leaders know all too well, there is no quick fix for the UK’s skills shortage, but opening positions up internally as well as implementing upskilling or reskilling programmes for current staff will really benefit businesses as well as the economy as a whole. A lack of career opportunity is regularly cited as the reason that people leave their current employer so ensuring companies are looking at their internal employee population will have a swift impact on skills deficits.”

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Unemployment rate hits record low

According to Statistics Canada, employment in Canada fell by 43,200 jobs in June from the previous month, the first decline since January and fully offsetting the increase of 39,800 recorded in May. This marks the first employment decline not associated with a tightening of public health restrictions since the beginning of the pandemic.

The agency indicated the employment loss in June from May was almost entirely due to a decrease of 51,000 jobs among workers aged 55 and older; there was little change in total job numbers among youth aged 15 to 24 and the core-age population aged 25 to 54.

The numbers came as a surprise to economists, who had been expecting the economy to add about 20,000 jobs during the month, CBC reported.

Positively however, Canada’s unemployment rate fell 0.2 percentage points in June to a new record low of 4.9% — the lowest rate since comparable data became available in 1976 — as fewer people looked for work. Total employment in Canada was 19.6 million in June.

June’s employment decline was driven by losses in part-time jobs, which fell by 39,100. Full-time employment fell by 4,000. Self-employment declined, while the number of employees in both the public and the private sectors held steady.

Jobs fell by 76,000 in the services-producing sector with losses spread across several industries, including retail trade. However, the goods-producing sector saw an increase of 33,000 jobs in June, with gains in construction and manufacturing.

Average hourly wages for employees increased 5.2%, or C$1.54, on a year-over-year basis in June to $31.24, compared with a year-over-year increase of 3.9%, C$1.18, in May.

By province, employment decreased in Newfoundland and Labrador and Quebec, while there were gains in Prince Edward Island and Manitoba.

Looking at just Ontario, the number of jobs fell by 24,700 to a total of more than 7.7 million. The province gained 27,900 full-time jobs but lost 52,500 part-time jobs. Ontario’s unemployment rate fell to 5.1% in June from 5.5% in May.

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50% of businesses are losing customers due to staff shortages 

New research by WorkJam has revealed that almost 50% of the business leaders surveyed have been understaffed for 5-6 months, while 36% have been understaffed for 3-4 months, and 78% are currently understaffed. A further 48% have lost customers because of staff shortages.

The survey of CxOs, Directors, and VPs in industries including retail, manufacturing, consumer goods, transporting, and warehousing found that for 30% of businesses, the shortages have amounted to between 16 and 20% of their workforce in the last 12 months. An additional 26% lost 11-15% of their staff during the same period.

There is little doubt that these results seriously impact day-to-day performance while putting additional strain on the employees left behind.

The survey also found that for 64% of businesses, churn levels have stayed the same (33%) or are somewhat higher (31%) than in the previous 12 months, with little chance of imminent improvement. In addition, more than half (53%) of those surveyed did not expect changes to hiring issues over the next 12 months. Fifty percent also expected retention issues to remain the same.

Reasons for employee churn included

  • Employees feel that their hours are too long or there wasn’t enough flexibility in their position (25%)
  • Diversity and inclusion issues (16%)
  • Dissatisfaction with salary (14%)
  • Dissatisfaction with benefits (10%)

Fifty-one percent of the survey respondents want to solve retention and hiring issues by providing better employee perks or benefits. A further 30% are investing in HR or frontline technology, and 27% are investing in learning and development.

Mark Williams, Managing Director EMEA of WorkJam, commented: “We’re in the midst of a global recruitment crisis. While it’s no secret that key sectors have been struggling to find and retain talent since the start of the pandemic – if not before – the figures revealed by our survey really put the problem into context. And the difficulty is that the issue is self-sustaining. Churn puts additional pressure on existing employees, increasing the likelihood that they, in turn, will seek employment elsewhere, again heaping pressure on those left behind.”

“Executives are faced with finding solutions that will aid retention and recruitment without necessitating a price hike in the middle of the cost-of-living crisis. According to our research, a quarter of businesses have already had to raise their prices. But this carries the risk of further deterring customers. It’s a difficult balance to strike.”

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Temporary billings rise more than permanent placements

The latest KPMG and REC, UK Report on Jobs survey has found that permanent staff appointments and temp billings have grown at the lowest rate in 16 months in June. While recruitment activity continues to expand across the UK, temporary billings have risen more than permanent placements.

According to the report compiled by S&P Global, recruiters shared that candidate shortages were limiting hiring activity. In addition, with ever-increasing economic uncertainty, low growth was attributed to slower client decision-making. The report also found that overall demand for workers had increased at the slowest rate since March 2021.

Further findings include that the rate of decline for staff availability has been the quickest for three months. Efforts to attract and secure candidates have resulted in marked increases in starting pay; however, salary and wage inflation rates have lessened since May.

Recruitment consultancies attributed lower candidate numbers to:

  • a generally low unemployment rate;
  • fewer foreign workers;
  • robust demand for staff; and
  • hesitancy to switch roles in the increasingly uncertain economic climate.

While overall vacancies continue to increase dramatically, the latest upturn was also the lowest in 15 months. The results also showed lower demand for both permanent and temporary workers at the end of Q2; however, the quicker expansion rate was in demand for permanent workers.

Staff availability declined severely in June, with the deterioration going up to the sharpest for three months with both permanent and temporary labour supply dropping quickly.

Imbalances between the supply and demand for workers also resulted in steep increases in starting pay rates during June. However, as sharp and well above the series average as the starting salary rates are, the rates were the softest since August 2021. Furthermore, temp wage growth dropped to a 12-month low.

Regionally, softer rises in permanent placements were noted in all four monitored English regions. However, North of England saw the weakest increase overall.

London saw the sharpest increase in temp billings at the end of Q2, whereas the softest expansion was noted in the Midlands.

In terms of vacancies, the strongest increase was for permanent workers in the private sector, followed by permanent staff in the public sector. However, the former saw a notable drop in growth in June compared to May. The softest rise, although still marked, was in vacancies for temporary workers in the public sector.

When looking at the results by industry, the data signalled steep increases in permanent staff demand across all ten monitored employment categories. Hotel & Catering showed the sharpest upturn in vacancies overall, with IT & Computing and Nursing/Medical/Care following.

Higher temp vacancies were seen in nine of the ten monitored job categories at the end of the Q2, with Hotel & Catering at the top of the rankings. Retail was the only sector to show a drop in demand, even though the rate of contraction was modest.

Neil Carberry, Chief Executive of the REC, commented: “The labour market is still strong, with demand for new staff high. That said, today’s data show that we will likely be past the peak of the post-pandemic hiring spree. That pace of growth was always going to be temporary – the big question now is the effect that inflation has on pay and consumer demand over the course of the rest of the year. Whether we will see the market settle at close to normal levels, or see a slowdown, is unpredictable at this point.

“Part of the reason for unpredictability in the market is a slower economy accompanied by severe labour and skills shortages. These are already proving a constraint on growth in many firms. The government should be thinking about how to ensure all its departments enable greater labour market participation and encourage business investment funds to help address this.

“It is important to note that plenty of hiring is happening in this tight market – there are candidates out there for firms who get it right. Skilled recruitment professionals are at the heart of this, making a difference to opportunity and growth for companies and workers.”

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “The apparent buoyancy of the jobs market overall continues to mask some increasingly concerning trends. Firstly, the fluctuations in demand for permanent and temporary workers in some sectors may be showing a sustained downward trend, as it becomes clear that current economic pressures are impacting employers’ confidence to grow. Secondly, the supply of candidates in all sectors continues to decline, with the rate of contraction accelerating to the quickest for three months in June. Added to that, competition for candidates pervades all sectors with employers offering financial incentives to retain talent, so increasing wage inflation. This latest data could be signalling that the UK jobs market may be more fragile than it seems.”

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Economic activity decreases again

According to the latest Labour Force Survey (LFS) from the ONS, its estimated that for the period of January to March 2022 there was a decrease in the unemployment rate, while the employment and inactivity rates increased.

Even though the market is contracting, the employment rate increased by 0.1 percentage points on the quarter to 75.7%, however this is still below pre-pandemic levels. According to figures, the increase in the employment rate was driven by the movement of people aged 16 to 64 years from unemployment to employment. However, there was also a record-high movement of people from economic inactivity into employment with total job-to-job moves also increasing to a record high of 994,000, driven by resignations rather than dismissals, during the January to March 2022 period – the Great Resignation continues…

The estimated number of payrolled employees for April 2022 shows a monthly increase, up 121,000 on the revised March 2022, to a record 29.5 million.

The unemployment rate for January to March 2022 decreased by 0.3 percentage points on the quarter to 3.7% and for the first time since records began, there are fewer unemployed people than job vacancies.

Tania Bowers, Global Public Policy Director at APSCo commented on the skills shortages: “The skills shortages in the UK are reaching concerning levels and this latest data shows the scale of the pressure on employers and the staffing sector as demand continues to outstrip supply. We’ve seen some encouraging signs from the Government, including the highly skilled immigration visa which was announced by the Chancellor earlier this year.

“However, we are concerned that the absence of the Employment Bill in the Queen’s Speech is an indication that the immediate skills crisis has slipped off the priority list for the Government. At a time when the job market is growing at unprecedented rates and competition is rife, more appropriate regulation is needed for the modern labour market.”

Economic activity 

The economic inactivity rate increased by 0.1 percentage points to 21.4% in January to March 2022 and this recent inactivity is believed to be driven by those aged 50 to 64 years.

The number of job vacancies in February to April 2022 rose to a new record of 1,295,000. However, the rate of growth in vacancies continued to slow down.

Kate Meadowcroft, Employment Partner at legal business, DWF, commented on the UK Labour Market figures regarding increased pay: “Undoubtedly the cost-of-living crisis and soaring inflation will have a knock on effect on the labour market.  ONS figures have previously shown that although wages have risen, once you consider inflation pay is actually falling. Employees will be seeking out the most attractive rewards packages in order to combat the financial repercussions of the turbulent economy.

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Prison leavers receive mentoring to create and market clothing range

A new project, established by social enterprise Inside Out, has been launched to rehabilitate young ex-offenders by helping them create and market a clothing brand. The hand-produced clothing range is currently being sold in a pop-up store in London.

New data from Cebr, commissioned by LinkedIn, estimates that only 2 in 10 prison leavers can find work in the first year after their release. According to the data based on prison leavers in 2020, the unemployment rate for ex-offenders is 89% six weeks after their release and only improves to 44% a year after their release.

The initiative, supported by LinkedIn, provided training and mentoring to a group of ex-offenders. The prison leavers were aged between 18 and 27 years and struggling to find work, and the project was designed to build skills to help them find permanent employment.

The programme taught the young people technical skills, such as screen printing and design, business skills, like sales and marketing, as well as soft skills – including teamwork and problem-solving. Additionally, they were assisted in building professional profiles on LinkedIn and taught best practices on networking and applying for roles.

The clothing range is a collection of branded hoodies, hats, T-shirts, facemasks, and bags and is available for purchase at ‘Blank Canvas’, a pop-up store in Westfield Stratford, London, between the 19th and 28th April.

Tashan Lane-Pierre, Project Ambassador, Inside Out Project, said: “I started my own clothing line in 2017 before I went to prison. Now that I’m out, I want to learn the business of fashion, how it’s produced behind the scenes in the hope that I’ll be able to run my own label one day. The skills I’m learning through this project will help me in business and I’m excited to be a part of it. I just want the opportunity to be treated normally and not judged for my past actions.” 

Janine Chamberlin, UK Country Manager at LinkedIn, said: “This group is full of ideas and it’s been amazing to see their drive to go on and make a positive impact in the world. Ex-offenders have a lot to offer potential employers and I really hope the skills they’ve learned and the networks they are building through this programme will help them find a fresh start and a new role.”

Inside Out Project Founder Greg McKenzie, said: “Unemployment rates for former prisoners are much higher than among the wider population, even ten years after release. But there is a positive correlation between employment and reduced reoffending, which shows the need for proactive policies to ensure more prison leavers are able to access job opportunities and the tools and training they need to succeed. This is what Inside Out is all about.”

The hope is that projects such as Inside Out will help prison-leavers with their unemployment challenges and reduce reoffending.

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ONS stats show increase in economic inactivity

The latest figures from the ONS have been released and what stands out is that even though average pay rises for the first quarter are at an average of 4% (excluding bonuses), this appears well below inflation. However, in real terms (adjusted for inflation), growth in total pay was 0.4% and regular pay fell on the year at negative 1.0%. Strong bonus payments over the past six months have kept recent real total pay growth positive but employers may find it even harder to retain talent through salary increases alone as the cost-of-living crisis continues in the UK.

The latest Labour Force Survey (LFS) showed that for December 2021 to February 2022 the employment rate remains unchanged on the quarter, while the unemployment rate decreased. Over the same period, the economic inactivity rate has increased slightly which signals a slight dip in the economic rebound following the end of the pandemic with inactivity increasing by 0.2 percentage points to 21.4% from December to February 2022.

There was a noteworthy increase, albeit small, in the number of payrolled employees for March 2022 which is up 35,000 on the revised February 2022 to a record 29.6 million.

The report showed that once again, the number of job vacancies in January to March 2022 rose to a new record of 1,288,000, with the rate of growth in vacancies continuing to slow down.

Jon Keeble, employment partner at DWF commented on the latest report: “The latest ONS labour market figures demonstrate continued resilience in the labour market. The highlights for the period between December 2021 and February 2022 show a largely unchanged employment rate of 75.5%.

“With legal requirements largely removed across the UK and a shift over to personal responsibility we are very much in the phase of having to live with COVID-19. Although employers are now faced with a number of practical challenges as we enter this next chapter, the relaxation of restrictions should have a positive effect on the labour market.

“We are yet to see what impact the cost-of-living crisis will have on the labour market and whether the Chancellor’s Spring Statement and the rise in the National Minimum Wage will provide sufficient support.  Undoubtedly, employees who are struggling to cope financially will be seeking out those employers, which are able to provide the most attractive rewards package.”

James Reed, Chairman of Reed.co.uk, also commented: “The economy is facing a crunch point as businesses contend with serious challenges, from rapidly rising inflation to severe labour shortages. The jobs boom that began last year continues to be reflected in the ONS’s labour market statistics. With job postings on Reed.co.uk in March increasing 18% year-on-year and 14% month-on-month, this trend shows little sign of slowing. But with economic growth now as low as 0.1% and unemployment at historic lows, the jobs boom is in danger of becoming a jobs overload.”

“The difficulties businesses now face in hiring staff, are having a knock-on effect on supply chains, production output and the quality of goods and services. This is slowing the UK’s economic recovery from the pandemic.

“There are now 8.8 million people who are economically inactive in the UK, which is 600,000 more than at the start of the pandemic. This is a symptom of what I call ‘The Great Lie Down’, with many workers leaving the workforce altogether, some through long term sickness and others preferring early retirement or different lifestyle choices. If these workers are to be coaxed back, they will need convincing with attractive employment arrangements, higher wages and better conditions and benefits.

“Currently, less than 20% of these people who are economically inactive say they would like a regular, paid job. However, if it was possible to help this group find work then that would be of great benefit to both them and the economy.”

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