In the latest findings from the Office for National Statistics (ONS) covering September to November 2023, the UK’s labour market showcases a complex landscape with notable shifts in key indicators.
Vacancies fall, marking longest consecutive quarterly decline
The estimated number of vacancies in the UK saw a significant drop of 45,000 in the quarter, reaching 949,000. This decline marks the 17th consecutive quarter of falling vacancies, setting a record for the longest continuous decline ever recorded. Despite this, the current figure remains above pre-coronavirus pandemic levels, indicating ongoing challenges in the job market.
Steady annual pay growth but varied sector performances
Annual growth in regular pay (excluding bonuses) in Great Britain remained robust at 7.3% for the period of August to October 2023. However, this growth, while strong, did not reach the heights of recent periods. In contrast, annual growth in employees’ average total pay (including bonuses) stood at 7.2%. Notably, the public sector experienced a significant annual average regular earnings growth of 6.9%, marking one of the highest rates since records began in 2001. In the private sector, the annual average regular earnings growth was slightly higher at 7.3%.
Real-term pay growth and labour disputes
In real terms, adjusting for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH), annual growth for total pay rose by 1.3%, and regular pay rose by 1.4%. These figures provide insight into the actual purchasing power of the workforce amid economic fluctuations.
October 2023 witnessed 131,000 working days lost due to labour disputes, with three-fifths of these disputes concentrated in the health and social work sector. The number of workers involved in these disputes reached 49,000, marking the lowest figure since June 2022.
Job market dynamics and employee growth
The estimated number of workforce jobs in the UK hit a record 36.8 million in September 2023, reflecting an increase of 210,000 from June 2023. This includes both employee jobs and self-employment jobs. Employee jobs have been on an upward trend since September 2020, reaching a record high of 32.5 million in September 2023.
Payrolled employees and revised growth figures
The estimate of payrolled employees in the UK for November 2023 remained largely unchanged compared to the revised October 2023 figure, showing a decrease of 13,000 to 30.2 million. This November estimate is provisional and is likely to be revised with additional data expected next month. UK payrolled employee growth for October 2023, compared with September 2023, has been revised from an increase of 33,000 reported in the last bulletin to a higher figure of 39,000, indicating ongoing adjustments in the employment landscape.
The latest ONS findings provide a multifaceted view of the UK’s labour market, illustrating both challenges and positive indicators as the nation continues its journey toward economic recovery.
Michael Stull, Director at ManpowerGroup UK, commented: “The latest data comes time of concerning economic stagnation and when we know both anecdotally and from our own data that eight in ten UK employers are reporting difficulties in finding the skills and talent that they need. It’s a struggle that is happening across all sectors and it means that even though most organisations are feeling understandably cautious going into 2024, their intent to hire is staying strong because they are facing more pressure than ever to plug those skills gaps.
“Our advice to employers – who we know from our own Employment Outlook data released today are frustrated with hiring because of the skills shortages – is to rethink their recruitment approach and consider moving from experience-based, to skills-based hiring as part of a solution to these challenges and economic headwinds. Those who are prepared to pivot, consider new ways of doing things, and embrace new technologies and skillsets with confidence, will have the best chance of unlocking growth and seeing positive changes in the New Year. The same can be said of employees and candidates – it is those who are prepared to retrain, upskill and adapt, who stand to benefit as the labour market remains tight.”