Employment rate rises to 75.6%
Estimates from the Labour Force Survey show that, between October to December 2017 and January to March 2018, the number of people in work increased, the number of unemployed people decreased and the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) also decreased.
There were 32.34m people in work, 197,000 more than for October to December 2017 and 396,000 more than for a year earlier.
The employment rate (the proportion of people aged from 16 to 64 years who were in work) was 75.6%, higher than for a year earlier (74.8%) and the highest since comparable records began in 1971.
There were 1.42m unemployed people (people not in work but seeking and available to work), 46,000 fewer than for October to December 2017 and 116,000 fewer than for a year earlier.
The unemployment rate (the proportion of people in work plus unemployed people, who were unemployed) was 4.2%, down from 4.6% for a year earlier and the joint lowest since 1975.
There were 8.66m people aged from 16 to 64 years who were economically inactive (not working and not seeking or available to work), 115,000 fewer than for October to December 2017 and 171,000 fewer than for a year earlier.
The inactivity rate (the proportion of people aged from 16 to 64 years who were economically inactive) was 21.0%, lower than for a year earlier (21.5%) and the 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 2.9% excluding bonuses, and by 2.6% including 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) increased by 0.4% excluding bonuses, but were unchanged including bonuses, compared with a year earlier.
Phil Coulter, EMEA head of technology at Korn Ferry Futurestep, shared, “Whilst today’s figures have once again confirmed strong employment growth up and down the country, the challenge still remains competing for the right staff with the right skills to get the job done. The truth is, not all businesses are in the financial position to offer substantial monetary awards to their staff, regardless of their desires. The good news is that, for the most part employees’ expectations have begun to shift. For today’s workforce, money is not necessarily the most effective way of engaging staff with their role, and it needn’t be the most effective way to reward them, either.
“In order to keep abreast of changing expectations, organisations must ensure that they have the pulling power to attract 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.”
Recruitment & Employment Confederation (REC) director of polic,y Tom Hadley, said, “Candidates are now in a better position, if moving jobs there is a strong chance of getting a pay rise. Businesses want to grow and with employment rates high they are having to compete with each other to attract people. Our data shows that one way they are making themselves more attractive is by offering higher starting pay for new recruits.
“There are plenty of jobs out there for candidates with high in-demand skills in sectors ranging from education to hospitality. We simply don’t have the number of people in this country to fill the vacancies businesses are creating. If the government wants to boost economic growth businesses need to be able to continue to attract and recruit workers from the EU.”
Tara Sinclair, economist and senior fellow at Indeed, commented, “A repeat of last month’s exceptionally strong set of labour statistics was going to be a long shot, yet despite weak GDP figures, this is exactly what has happened.
“Years of job creation have brought the UK within touching distance of full employment. Unemployment now stands at its lowest rate since 1975, while the employment rate is the highest on record. While it’s too early to say if this will be the high water mark, a clear line in the sand has been drawn.
“However, the reality is, without adding more people to the potential workforce, the pace of job generation will slow and could cause an already tight labour market to burst.
“It is clear that thousands of employers are still betting on economic growth and are trying to hire. As that demand bumps up against the limited supply of workers, there is a need to offer higher salaries to attract new staff.
“Workers will be celebrating two straight months of real gains in regular pay and if inflation continues to fall and the jobs keep on being created - the average person’s paypacket could continue to expand.
“A word of caution though. The latest figures show productivity is falling and it bears repeating that the UK’s economic growth has painted a worrying picture. These employment figures are out of sync with the wider picture and something will have to give in the not too distant future.
“Pay rises alone cannot deliver lasting benefit to Britain’s economy; the holy grail remains productivity. And improving that remains as elusive as ever.”
Martin Talbot, director at totaljobs, said, “This result is great news for the UK jobs market, as it’s further proof that job confidence and security is withstanding the pressure squeezing other sectors of the UK economy. As such, we expect to see a battle brewing amongst employers who are looking to secure and retain the most talented individuals.
“We’re encouraged by this continued optimism in the labour market following last month’s record high employment levels, even as we continue to hear shock job loss announcements.
“We have seen a continued resilience in job availabilities on our platform as well. Tech and IT have seen the greatest rise in job postings, standing 18% higher than last month. With availabilities in most industries, it’s a buyer’s market. For those in need of a change, now is the time to start looking for a new role.
“Regardless of what the future holds, we are confident that British businesses and employees will draw great confidence from this month’s strong labour market results.”
Gerwyn Davies, senior labour market Analyst for the CIPD, stated, “Record high employment, record low economic inactivity and a further increase to regular earnings all point to a labour market that is in rude health. However, beneath the surface, the data indicate that the UK labour market looks set to tighten further, which will heap further pressure on the increasing share of employers who are struggling to raise wages. Today’s disappointing productivity figures will undoubtedly raise questions about the sustainability of wages to rise beyond the immediate-term.
“Regular pay has edged up slightly, suggesting that skill and labour shortages are starting to put pressure on employers to raise wages. However, the combination of strong jobs growth and weaker economic growth means that the productivity revival is in danger of fizzling out yet again, which may dampen wage growth in the months to come.
“Employers need to be better prepared for a changing and tighter labour market. Labour supply looks set to fall further in the coming months, partly due to an abrupt plateauing in the number of EU citizens in employment in the UK, as this morning’s figures show. Greater investment in skills is needed to offset recruitment difficulties and increase productivity growth alongside more workforce planning activity. Meanwhile, the Government has to do more to kick-start our productivity growth, for example, by providing better support to small firms and by reforming the apprenticeship levy to a more flexible training levy that can start to boost organisations’ investment in skills.”
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