Employment rate reaches new record high, but recruitment & employment professionals remain cautious
Meanwhile the unemployment rate is approaching pre-recession levels, and at 5.3% is the lowest since early 2008. Over the last year, there has been a drop of 210,000 in the number of unemployed people.
The government highlighted:
• There are now more women in work than ever before — with an increase of almost a million since 2010
• Youth unemployment is at its lowest level since early 2006, and the employment rate for young people who have left full-time education is up to 74.3%, the highest in more than a decade
• The number of long-term unemployed people has fallen by 25% in the last year to 514,000 – the lowest level in 6 years
Employment Minister Priti Patel, said, “Employment is at a record breaking high, and wages have continued to grow strongly, demonstrating that this Government is delivering for hardworking people.
“With two million more people in work since 2010, the unemployment rate at its lowest in seven years, and the number of people on one of the main out of work benefits down by a million since 2010, it is clear that this Government is transforming lives for the better, and creating the higher wage, lower welfare society that British people want to see.
“But this growth is only one part of the story, because our one nation approach involves a commitment to provide opportunity and security for everyone across the country.”
Following the release of the latest figures here is what a few of the UK's recruitment and employment professionals had to say.
Ann Swain, chief executive at APSCo, commented, “With an employment rate of 73.7% - representing the highest level since records began in 1971 - it is clear that we are now well and truly riding the economic cycle away from recession and towards greater prosperity. These statistics reflect what our members are witnessing – greater positivity and demand in the market. And with the EY Item Club forecasting that business investment will continue rise by an average of 6.4% annually until 2019, this investment in talent shows no sign of slowing.”
“It is unsurprising that average wages continue to climb as organisations scramble to get their hands on the best talent. Indeed, within the professional sectors, APSCo has recorded uplifts of 4.6% year-on-year, with salaries within the banking sector rising by an average of 14.7% over the same period. Acute talent shortages are putting an upward pressure on salaries as banks struggle to bring on board the people they need to simultaneously manage growth, incoming ring-fencing rules, ever-increasing legislation, retail branch transformation and a migration to digital banking.”
David Lahey, VP International at Jobvite, said, “Although employment has risen, there is still much to do in the UK labour market. Worldwide, there is uncertainty over the labour market and the UK is not exempt from this. With Bank of England’s Deputy Governor Minouche Shafik recently claiming that “the labour market will start to tighten over the coming months,” it is absolutely vital companies begin overhauling their recruitment strategies. The cornerstone of any strong business is people, and with the skills shortage sitting alongside the job market squeeze, the best candidates are going to be even harder to hire and retain. This is especially true when you consider that Jobvite’s 2015 UK Social Recruitment Study revealed that 58% of recruiters say that the biggest challenge their company faces in hiring quality talent is down to the lack of skilled or qualified workers.
“The key to safeguarding your business against a talent shortfall, lies in understanding the current state of recruitment. Today, recruitment like marketing is a constant activity. If you want to hire people that will be productive, you must be able to attract candidates that believe in the values of your company and want to be a part of it. You can only do this if you have a strong employer brand. If all recruiters focused on building strong and genuine employer brands, it would lead to a more productive and improved UK labour force. Doing this requires a focused and modern approach to recruitment that makes the most of today’s technology.”
Gerwyn Davies, labour market analyst at the CIPD, commented, “Today’s jobs figures, showing further increases in the number of people in work and equally sharp falls in the claimant count, will cheer the Chancellor of the Exchequer ahead of his Autumn Statement later this month. In addition, signs that wage pressure is moderating against the backdrop of historically low levels of inflation strengthens the Bank of England case for not hiking in interest rates in the next few months, despite unemployment falling to a seven-year low.
“Harsh critics might point out that a relatively large proportion of the jobs are part-time. However this follows a period of strong growth in full-time employment. Against the backdrop of its net migration target and the EU debate, the only potential worry for the government perversely is the sharp increase in the number of non-UK nationals in employment. The increase is driven by non-UK nationals from the EU that now make up two million of the UK workforce for the first time.
“However, this development should also be celebrated. CIPD research shows that employers have headed off the threat from skills shortages by hiring more young people, upskilling the existing workforce and turning to migrant workers. This may explain why pay pressures have not increased, which has supported stronger employment growth and eased any pressure on the Bank of England to raise interest rates at a time when the global economy is showing signs of cooling down. Even though pay pressures have eased, the rate of earnings growth comfortably exceeds price inflation, although there is still plenty of ground to be made up after several years of earnings going up by less than prices."
Doug Monro, co-founder of Adzuna, said, “Unemployment may be at its lowest level since 2008, but scratch beneath the surface and the jobs market recovery is not quite as smooth it seems. Established employees are seeing wage growth, but pay for prospective staff is diverging away, with advertised salaries falling for the last seven months on the trot. This is partly down to an increase in lower paid and temporary jobs – which will only boom further in the run-up to the festive period – but it also highlights that employers are increasingly desperate to retain their existing staff because it is currently so hard to hire.
“There is another factor at play too. Vacancies are growing but an ongoing UK skills shortage means that we don’t have the right people to fill them. Adzuna data shows that 41 out of 56 UK cities didn’t have enough jobseekers to fill available vacancies in September. To stay competitive, we need to upskill our existing workforce, through retraining and apprenticeships. Skills migration across the counties – and countries – will play a major part too, and the Government needs to fight the corner of employers to ensure access to the best international talent stays available – or we could quickly fall behind our overseas competitors.”
IPSE policy director, Simon McVicker, said, “The labour market has hit a record high in employment, which has again coincided with a rise in the number of self-employed. The figures show the resilience of the self-employed sector in what is becoming an increasingly difficult regulatory environment. Make no mistake, independent professionals are a huge contributor to the flexibility and growth of our economy, they are here to stay.
“We will be celebrating the vital work of one part of the self-employed community with National Freelancers’ Day tomorrow, Thursday 12 November. It is an opportunity to showcase the value this part of the labour market brings to the UK economy.”
Neil Carberry, CBI Director for Employment and Skills, said, “The UK labour market seems in rude health, with the strongest increase in employment since the beginning of the year, and unemployment falling by 103,000. As we approach full employment, skills shortages are starting to bite, most notably in the construction sector, where pay growth has leapt to 6.6%. To resolve this, the Government needs to ensure the new apprenticeship levy delivers the right skills. We need an independent levy board to set the rate and measure standards if we are going to deliver large numbers of high quality, business-relevant apprenticeships. While overall pay growth has ticked down, real incomes are still rising owing to rock-bottom inflation, but improving productivity remains vital to achieving sustainable faster pay growth.”