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ONS statistics show slight falls in unemployment, with the number of vacancies outstripping unemployment as experts call for more action to get people to consider looking for a job.
The unemployment rate for January to March 2022 fell by 0.3% on the quarter to 3.7% meaning that, for the first time since records began, there are fewer unemployed people than job vacancies, according to the latest figures from the Office for National Statistics.
They show that the employment rate increased by 0.1 percentage points on the quarter to 75.7% which the ONS says was driven by the movement of people aged 16 to 64 years from unemployment to employment. However, it adds that there was also a record-high movement of people from economic inactivity into employment, although economic inactivity is slightly up, mostly driven by 5 to 64 year olds. Total job-to-job moves also increased to a record high of 994,000, driven by resignations rather than dismissals, during the January to March 2022 period.
The figures also show an increase in the number of hours worked compared to the previous quarter, with average weekly hours worked by part-time workers at a record high of 16.8 hours per week.
However, while unemployment is falling, the number of job vacancies in February to April 2022 hit a new record high of 1,295,000. Nevertheless, the rate of growth in vacancies continued to slow down.
The ONS says growth in employees’ average total pay (including bonuses) was 7% on the previous year and growth in regular pay (excluding bonuses) was 4.2% in January to March 2022. In real terms (adjusted for inflation), however, growth in total pay was 1.4% and regular pay fell on the year at negative 1.2%. Nevertheless, strong bonus payments – for those who get bonuses – have kept recent real total pay growth positive. Some of the rise in pay is due to the effect of furlough last year.
Recruitment and retention
Tony Wilson, Director of the Institute for Employment Studies, said: “There’s some good news in today’s figures, with record pay growth in the private sector just about keeping wages ahead of inflation, and unemployment continuing to fall to its lowest since 1974. However this is masking now the tightest labour market that we have seen in at least half a century, with more vacancies than there are unemployed people for the first time ever, and well over a million fewer people in the labour force than on pre-pandemic trends. It’s this recruitment crisis that is fuelling higher private sector pay and bonuses and is also behind recent rises in interest rates. However, rather than trying to dampen demand, we need to be doing far more to boost labour supply, which would support economic growth, raise household incomes and help contain inflation. In fact if anything, we’re cutting investment in employment support at just the time that we should be ramping it up.
“So alongside any new measures to support household incomes through the cost of living crisis, we need urgent action too to raise participation and help people into work. This needs to be focused on better support for older people, disabled people and those with health conditions. Employers will need to do more too, and make sure that jobs are advertised and designed in ways that are accessible and inclusive for those further from work.”
Recruitment companies say employers seeking to attract and retain workers need to offer more flexible working as candidates are increasingly asking for it.
Kieran Boyle, MD of Gloucester-based CKB Recruitment, says: “We have seen no let-up in the amount of new vacancies coming to market. There is still a huge skills gap in the labour market and recruitment is showing no signs of slowing down. The fight for talent is being won by the companies who have embraced flexible working, as people now want this as a rule. The firms who have stuck to wanting everyone in the office five days a week are really starting to struggle to attract the best talent, not to mention retain it. Post-pandemic lifestyle changes have seen the amount of people already in a job looking elsewhere go through the roof. This is easily the most candidate-driven market we have ever experienced.”
However, Julia Kermode, founder of IWork, says many employers think they don’t need to offer flexibility now that Covid restrictions have been lifted. She says this is shortsighted: “Now that we are moving post-pandemic, companies are less inclined to offer flexible working, cutting out huge swathes of potential candidates such as those with caring responsibilities, disabled people, those from disadvantaged backgrounds, part-timers, and many more. It’s about time businesses recognised the value of attracting a diverse workforce as there are so many people who are willing and able to work, and who want to contribute to the economy, but don’t have the option to do so because far too many companies have legacy mindsets.”
Meanwhile, the UK has topped a table of nations where workers would rather quit or find a new job than return to the office five days a week. A global survey of 33,000 people by WFH Research saw 23% of British workers say they would rather leave their role or start looking for a new job rather than go back to the office.