The UK’s employment rate has hit levels not seen since records began in 1971.
Figures from the Office for National Statistics, published this morning, reveal the proportion of 16 to 64-year-olds in work, was 74.8%, while the number of people unemployed fell by 53,000 to 1.54m in the three months to March 2017.
Commenting on the figures, Recruitment & Employment Confederation CEO Kevin Green said they point to the growing skills crisis in the UK, backing up REC data showing falling candidate availability.
With real wages now falling, the main way to secure a pay rise is to move jobs. Recruiters are reporting that starting salaries continue to increase as employers offer pay incentives to attract the talent they need. At the same time, signs that the economy is creaking could be putting some people off from moving jobs and taking the associated risks.
Whichever party forms a government after 8 June will have to get to grips with multiple challenges to keep the jobs market on course. Addressing the skills shortage needs to be a priority, because businesses will suffer if they are unable to fill vacancies. We need serious investment in skills for UK jobseekers, as well as an approach to immigration which is agile and pragmatic enough to meet labour market needs.
Also commenting on the figures, Julia Kermode, CEO of the Freelancer & Contractor Services Association (FCSA), an independent trade association for accountancy providers and umbrella firms, said the increase in permanent employment means business confidence is growing.
Self-employment decreased slightly last quarter, but year-on-year the 381,000 increase in the UK workforce includes [more than] 82,000 self-employed, which is 21.5% of the increase in people working. However, we are also seeing some early indications of difficulties ahead, with CIPD’s survey results issued yesterday suggesting that 19% of organisations expect to announce a pay freeze with wages set to rise by just 1% in the year ahead. If that is the case then businesses are likely to become reluctant to add more permanent roles and will turn to freelancers to find short-term replacements to fill the gap, which will be good news for the flexible workforce.
Meanwhile Mariano Mamertino, EMEA economist at the global job site Indeed, reflected on a UK labour market pulling workers in opposing directions, with more jobs being created while both productivity and real wages are falling.
The UKs job creation engine continues to purr away, with both the number of people in work and the number of vacancies reaching record levels. But with inflation at its highest level for four years, wage growth is slowing and people’s pay packets are simply not keeping pace with rising prices. Those in work are slowly getting worse off.
Lee Biggins, founder and managing director of CV-Library, called the figures promising. It’s extremely promising to see that the number of people in work has increased, and our own job market data for the first quarter of 2017 found that jobs were up by 15.4% year-on-year and 14.5% quarter-on-quarter.
Finally, John Salt, director at job site totaljobs, said this latest fall in the UK’s unemployment rate is testament to a robust job market.
We may not know the outcome of the 8 June vote, but resilience in the face of change has been a feature of the job market this past year. Brexit and the shockwaves from across the Atlantic have done little to halt a continued fall in the unemployment rate, which is good news for the next government.