Employment rate rises to 75.3%
Estimates from the Labour Force Survey show that, between June to August 2017 and September to November 2017, the number of people in work increased, the number of unemployed people was little changed, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) decreased.
There were 32.21m people in work, 102,000 more than for June to August 2017 and 415,000 more than for a year earlier.
The employment rate (the proportion of people aged from 16 to 64 who were in work) was 75.3%, higher than for a year earlier (74.5%) and the joint highest since comparable records began in 1971.
There were 1.44 million unemployed people (people not in work but seeking and available to work), little changed compared with June to August 2017 but 160,000 fewer than for a year earlier.
The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.3%, down from 4.8% for a year earlier and the joint lowest since 1975.
There were 8.73 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 79,000 fewer than for June to August 2017 and 167,000 fewer than for a year earlier.
The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.2%, lower than for a year earlier (21.7%) and the joint lowest since comparable records began in 1971.
Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.5% including bonuses and by 2.4% excluding bonuses, compared with a year earlier.
Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) fell by 0.2% including bonuses, and fell by 0.5% excluding bonuses, compared with a year earlier.
Recruitment & Employment Confederation (REC) chief executive, Kevin Green, stated, “Businesses are still planning to hire and there was a record number of vacancies at the end of last year. However, it’s becoming even tougher to find people with the right skills to fill the jobs available, so employers across a range of sectors are desperately searching for candidates – from nurses to baristas to engineers.
“Employers who want an edge over the competition have to design new ways to attract people, like flexible work patterns. Some may need to go to specialist recruiters to get help sourcing talent in areas where there are very few candidates.
“Our data shows employers are increasing starting salaries in a bid to get applicants. However, this isn’t translating into broader pay rise for current staff and workers are facing hard times as inflation continues to outstrip pay growth. Employers need to think about salaries and benefits for all of their staff – otherwise employees could be tempted by better offers from rival companies.”
David Clift, HR director at totaljobs, said, “Today’s unemployment figures show an ongoing stability in the British workforce, which is hugely encouraging. As we head into 2018, it is reassuring to know that despite the political and economic uncertainty of the last year, unemployment is continuing to fall. This shows confidence in the nation’s jobs market. This is particularly important as political uncertainty shows no sign of abating, partly due to Brexit negotiations. This year we saw a record number of jobs advertised on totaljobs in the first week of January, with 54,000 posts on the site, which is up 20% from the same period in 2017. We hope to see unemployment continue to fall throughout the course of 2018.”
Tara Sinclair, economist and senior fellow at Indeed, commented, “The addition of such a surprisingly high number of new jobs proves the UK has yet to reach the employment high water mark. Clearly the jobs boom isn’t over yet, but the economy’s ability to keep creating new jobs is waning - and the prime suspect is the UK’s stubbornly low productivity.
“British labour productivity is growing at its slowest pace for nearly two centuries, and while this problem isn’t unique to the UK, Britain’s worrying combination of stagnant productivity and falling real wages is.
“Today’s modest increase in average salaries - up just 2.4% on the same time last year - means real wage growth remains tantalisingly out of reach for millions of Britons. Even though consumer price inflation eased in December, workers’ paypackets are still not keeping up.
“While many of us made ‘get a pay rise’ a New Year’s Resolution, research by Indeed has revealed that men are much more willing than women to ask their employer for a raise. Our study also found women are three times more likely than men to be too embarrassed to ask for a pay increase.
“Ten months on from the triggering of Article 50, the wage-sapping surge in inflation is a side effect of the fall in the Pound, and the steady erosion of employers’ confidence may be due to the uncertainty triggered by Brexit.
“But the roots of Britain’s productivity problem - which is the underlying reason for the slow wage growth and a serious speed bump for the economy - run deeper and cannot be blamed on Brexit alone.”
Doug Monro, co-founder of Adzuna, stated, “Recent figures show the inflation rate has fallen slightly, down to 2.9%. No rush for a celebration just yet as prices are still high, but this does give some indication that the worst of the pay squeeze could be over. However at present, the knock-on-effects on costs has resulted in retailers cutting their prices to attract customers and stay afloat ahead of the tide imminently turning. Companies such as Tesco has resulted in cutting 1,700 shop floor jobs as part of a cost-cutting drive to improve its operational structure. On one hand, an example of a smart and competitive move for UK firms to adapt their business model to remain ahead of the times, to stay resilient and dynamic. Yet, another bitter pill of uncertainty for those currently in employment to swallow, given the volatile nature of the jobs market.
“Looking at the jobs market through an optimistic lens, it’s likely that UK pay growth in 2018, is set to pick up speed for jobseekers and employees, given the ongoing dark cloud that has sat above UK average salaries. Improving for the first time since 2015, UK salaries currently reside at £32,598, improving for the first time since 2015. With 102,000 more people in work than for June to August 2017, the employment rate has reached a new high of 75.3%, and sets the standard for the UK’s growing and enriched talent pool.”
“The UK jobs market is never too far away from Brexit negotiations, and the question remains as to whether its impact will take a toll on the number of EU workers willing to come to work in the UK. Despite no actual signs of this impact on the labour market at present, opportunities are rife for the UK productivity to be boosted by a strong economy and this calls for further investment in UK technology such as the development of 5G service.”
Lee Biggins, founder and managing director of CV-Library, added, “This month’s ONS figures indicate that businesses across the UK remained confident, with the number of job vacancies setting a new record. This reflects our findings from Q4 2017, in which job vacancies saw an impressive increase of 12% when compared with data from the same period in the previous year. While it’s good to see the unemployment rate continuing to drop, it’s clear that candidates are remaining cautious, choosing to stay put in the face of ongoing economic uncertainty.
“Not only this, but our Q4 job market report revealed that advertised salaries rose by 2.7% quarter-on-quarter and 1% year-on-year. It’s clear that businesses across the nation are pulling out all the stops in a bid to rouse candidate appetite and stimulate growth in the economy. That said, with inflation rates remaining higher than pay growth, more needs to be done to encourage candidates to begin moving around and looking for their next career opportunity.”
Gerwyn Davies, Senior Labour Market Analyst for the CIPD, said, "The latest jobs figures paint a picture of cautious optimism in the UK labour market. It’s positive to see such strong quarterly employment growth. However, the record high number of vacancies points to a tightening of the labour market. Employers will increasingly need to review their employment offering to continue to attract applicants. The constraints in labour supply could therefore require a change in recruitment processes and greater investment in the training and upskilling of existing staff to ensure organisations have the skills they need to succeed. This will prove particularly pressing given the fall in net migration from the EU.
“With inflation increasing, real wages are struggling to keep up and people will be feeling a squeeze on pay. This is being exacerbated by the fact that employers are proving reluctant to increase wages as a potential response to the tightening labour market, as shown by recent CIPD research.”
Richard Shea, managing director for search at Korn Ferry, Futurestep, EMEA, commented, “Despite businesses continuing to walk the tightrope of economic uncertainty, these recent figures have once again signalled strong employment growth up and down the country. The challenge, however, remains competing for the right staff with the right skills to get the job done.
“The age of digital disruption is seeing business models, industries and working practices transform, with jobs that didn’t exist a few years ago being created. What this means is there are increasing demands for new skill sets in virtually every job and profession. As a result, hiring and retaining workers who are agile and who can adapt to the fast pace of change is and will be critical for staying ahead of the competition curve.
“In order to keep abreast of this wave, organisations must ensure that they have the pulling power to attract and retain the best. From flexible working schemes for a better work-life balance and increased holiday allowance, to robust career development programmes and creative working environments, employers need to communicate the benefits associated with their brand.
“Moreover, speed and agility are vital in any kind of competitive market, and this applies to the switched-on, digitally-savvy recruitment marketplace. Having the right recruitment tools and technology in place will make the process efficient and more responsive to the expectations of prospective employees.”
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