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New ONS statistics show job vacancies continue to rise and average pay is not keeping up with inflation.
Employment – and job vacancies – continue to rise, but wages are not keeping up with inflation and the number of part-time workers have decreased, according to the latest Labour Force Survey estimates for February to April 2022.
The UK employment rate increased by 0.2 percentage points on the quarter to 75.6%, but is still below pre-coronavirus pandemic levels. The number of full-time employees increased over the quarter to a record high, but this was partially offset by a decrease in the number of part-time employees. The number of self-employed workers fell during the coronavirus pandemic and has remained low, although they have increased over the quarter.
Average weekly hours worked are up, but total numbers of hours worked are below Covid rates due to the reduced number of people in employment. The number of people unemployed for up to six months rose, but was offset by a fall in the number who are unemployed for more than six months.
The economic inactivity rate also fell, mainly due to an increase in the number of people who were inactive due to being students.
Meanwhile, the number of job vacancies in March to May 2022 rose to a new record of 1,300,000. However, the rate of growth in vacancies continued to slow down. And growth in employees’ average regular pay (excluding bonuses) was 4.2% in February to April 2022, representing a 2.2% cut in pay due to inflation rates.
Tony Wilson from the Institute for Employment Studies said: “This is really grim news on pay and is only likely to get worse. Despite the tightest labour market on record, nominal pay is broadly flat meaning that rocketing inflation is leading to the largest cuts in real pay in at least two decades. The picture is particularly bad for public sector workers, with real pay falling by nearly 6% year on year. At the same time while employment is starting to pick up, there’s still a million people missing from the labour force compared to pre-pandemic trends – particularly older people, those with health conditions and overseas workers. The large rises in long-term ill health are particularly concerning, with a quarter of a million more people outside the labour force than before the pandemic.
“With inflation and interest rates both continuing to rise, the tightest labour market on record, economic growth flat and a ‘missing million’ from the labour force, the crises that we’ve got are not the ones that we prepared for through the Plan for Jobs. So we need urgent measures to boost labour supply rather than to dampen demand, and in particular to reinvest the £2 billion underspends on measures announced to tackle unemployment since the Plan for Jobs.”
Julia Kermode, founder at Nantwich-based IWork, added: “Businesses are still struggling to recruit and applicants are picking and choosing the best employer to suit them. Incredibly some candidates are ghosting recruiters even after job offers have been made. If you want to attract the best talent right now, you’ve got to modernise how you do things. Ditch those long-winded recruitment processes, ditch those outdated job descriptions and ditch your dull corporate image. As an employer, you need to sell yourself like never before. Make sure that everything your company has in the public domain is interesting, exciting and enticing, and make people choose you.”
ONS analysis of data from the Organization for Economic Cooperation and Development (OECD) of the Group of Seven industrialised nations has found that only the UK and the US have a participation problem, with more workforce drop-outs than before the pandemic. The OECD earlier this month warned the UK government that “a prolonged period of acute supply and labour shortages could force firms into a more permanent reduction in their operating capacity”.
Meanwhile, it emerged that Lloyds Banking Group will pay staff an additional £1,000 this summer to offset rising prices. The one-off payment in August will benefit over 64,000 employees – covering all staff apart from senior executives. The extra pay will cost Lloyds about £64m and comes in addition to budgeting advice and conversations with money experts under the bank’s relaunched Healthy Finances Hub programme.