Employment rate rises to 76.1%
The ONS has released it labour market economic commentary for the months from November 2018 to January 2019.
The level of employment in the UK increased by 222,000 to a record high of 32.71 million in the three months to January 2019. The UK employment rate was estimated at 76.1%, higher than for a year earlier (75.3%) and the highest figure on record.
The UK unemployment rate was estimated at 3.9%; it has not been lower since November 1974 to January 1975.
The UK economic inactivity rate was estimated at 20.7%, lower than for a year earlier (21.2%) and the lowest figure on record.
Excluding bonuses, average weekly earnings for employees in Great Britain were estimated to have increased by 3.4%, before adjusting for inflation, and by 1.4%, after adjusting for inflation, compared with a year earlier.
Including bonuses, average weekly earnings for employees in Great Britain were estimated to have increased by 3.4%, before adjusting for inflation, and by 1.5%, after adjusting for inflation, compared with a year earlier. Real total average weekly pay increased by 1.5% on the year in January 2019 and real regular average weekly pay increased by 1.4% on the year over the same period.
Recruitment & Employment Confederation (REC) chief executive, Neil Carberry, shared, “Today’s figures demonstrate the continued strength of the UK labour market, with recruiters helping firms hire the right staff for them to prosper amidst pressing skills shortages. But they need a Brexit deal that helps maintain and enhance this strong performance, rather than gambling with it.
“Uncertainty is threatening to jeopardise this healthy position, with 4 out of 5 recruiters polled by the REC saying that no-deal would have a negative effect on the jobs market.
“As business confidence drops, the political establishment needs to find a solution that can help protect people’s jobs and livelihoods.”
Lee Biggins, founder and CEO of CV-Library, commented, "In spite of a bleak backdrop amidst Brexit uncertainty, employers appear to be bucking the trend and continuing with their hiring efforts. What's more, our own data shows that wages are growing significantly, as many organisations seek to pull out all the stops in order to attract the best workers into their companies.
"However, this positive progress is at risk of stalling if the government cannot put aside their differences and work together to secure an efficient exit from the EU. Particularly as we know that many employers are already struggling to recruit the staff they need in order to drive productivity and strong economic growth."
Pawel Adrjan, UK economist at Indeed, said, “After years of stagnation, average wages are finally rising at a respectable rate. On the recruitment front line, the combination of skills shortages and yet another record high in employment is forcing many employers to ramp up salaries to attract staff.
“While the average worker may notice little difference to their monthly earnings, a lucky few with specialist skills are seeing their pay rise at double-digit rates.
“In sectors where there are long-term shortages of skilled staff, such as dentistry, insurance underwriting and industrial engineering, the battle for talent is morphing into an all out salary arms race.
“Analysis of the hundreds of thousands of job vacancies advertised on Indeed found that dentists’ salaries rose by a breathtaking 25% between March 2018 and March 2019.
“Vets have seen their advertised salaries rise by 10% on average over the same period, and insurance lawyers and underwriters by 21%.
“Endemic shortages in these sectors have historically made them reliant on attracting talent from abroad. But with early signs showing that it is becoming harder to lure skilled workers from the EU, that reliance is forcing employers to ramp up salaries at an ever more dizzying rate.”
Jon Boys, CIPD labour market economist, added, “The jobs market continues to impress, driven by full-time employment. Employment growth has been particularly strong in sectors such as construction, IT and public administration. The figures suggest strong employment growth for women, partly due to pension reform which means fewer women aged between 60 and 65 are retiring. For younger age groups it may also be due to the relatively recent introduction of childcare reforms, such as free childcare for three year olds. Organisations are also having to be more flexible in their approach to recruitment given the tight labour market.
“The outlook for living standards is also positive. Nominal pay growth has stayed the same but with a fall in inflation real pay growth has increased. In the face of Brexit uncertainty businesses may be employing more people to reach demand instead of making investments in plants and machinery. The latter is needed for long term productivity growth. As ever, the official figures lag and as we get closer to Brexit the date of departure will soon fall within businesses recruitment planning horizon. At this point many may hold steady so we might expect less rosy results in the coming months.”
Ben Frost, solution architect EMEA at Korn Ferry, said, "Today’s ONS employment stats have once again confirmed strong employment growth up and down the country, which is great news for companies and employees. The challenge, however, remains in competing for the right staff with the right skills.
“Not all businesses are in the financial position to offer monetary rewards to attract and retain top talent. However, for the most part employees’ expectations have begun to shift and so money is no longer necessarily the most effective way of rewarding staff or appealing to new talent.
“Companies need to look at benefits beyond financial incentives in order to attract the best talent. From flexible working schemes for a better work-life balance, to robust career development programmes and creative working environments, employers need to communicate the benefits associated with their brand.
“With this change in focus, organisations are able to attract and retain the best talent and so combat the current skills shortage that is affecting many industries”
David Morel, managing director of Tiger Recruitment, shared, "While Brexit negotiations continue to flounder, the administrative support hiring market has prospered, with many of our clients continuing to recruit in the face of uncertainty. In the first three weeks of March 2019, permanent business support roles received increased by 2.6%, when compared to the same period last year. Meanwhile, the private market is thriving, with private support roles received increasing by 138% compared to last year.
"With unemployment dropping to 3.9%, the candidate-led market is only going to tighten, meaning that employers will need to pull out all the stops to attract the best talent. This doesn’t mean just increasing salaries - improving benefits and flexible working arrangements are equally as important."
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