Liberty Towers’ Post

👑 Labour & Talent Index UK - August 2024 Update 👑 Ladies and gentlemen, as of August 2024, the UK job market presents a mixed picture. Employment has risen, with workforce jobs increasing by 431,000 over the past year to 37.2 million. However, the unemployment rate has climbed to 4.4%. The economic inactivity rate, at 22.1%, has slightly decreased recently but remains higher than last year. Vacancies have declined for the 24th consecutive period but still exceed pre-pandemic levels. Notably, average earnings have grown robustly, with a 5.7% annual increase in regular pay, highlighting the market’s resilience. Despite challenges, these developments offer a promising outlook. Labour & Talent Index UK: 🟢 68 - Positive 🔍 Last updated: 2nd August 2024 Historical Values: • August 2024: Positive (68) • July 2024: Positive (60) • July 2023: Positive (62) Introducing the Labour and Talent (LT) Index for the UK Job Market! The LT Index is a comprehensive tool designed to gauge the current health and dynamics of the UK job market, drawing inspiration from the Fear and Greed Index used in financial markets. Just as the Fear and Greed Index provides insights into market sentiment, the LT Index offers valuable insights into the UK’s labour and talent landscape. Stay tuned for more insights and updates on the UK job market! A big thank you to Prince William for being in our photo shoot and supporting our small business. P.S. Has anyone ever noticed how long Prince William’s fingers are?👀 https://lnkd.in/eW_8jMuE #JobMarket #Recruitment #TechIndustry #Healthcare #EmploymentTrends #LabourIndex

The labour market in the United Kingdom has demonstrated remarkable flexibility in the face of economic swings and geopolitical concerns. The country's unemployment rate has been declining recently, demonstrating its adaptability to shifting conditions. The UK’s labour market is currently unusually tight, with more than one million job vacancies across the country. The employment rate in early 2020 was 76.6%—the highest rate since records began in 1971; and rates of unemployment (3.7%) are close to their lowest levels. But rates of economic inactivity have risen, and the UK is the only country in the developed world where people have continued dropping out of the labour market in greater numbers beyond the acute phase of the Covid-19 pandemic. The sustained decrease in unemployment rates signals a fundamental shift in the UK's labour dynamics. As job opportunities continue to expand through various sectors, employers are battling with the challenge of sourcing and retaining skilled talent. This trend is particularly common in industries such as technology, healthcare, and finance, where specialised skills are in high demand. Here are few conditions that cause tight labour: Economic Growth and Business Expansion: The UK's steady economic growth has fueled business expansion, resulting in increased demand for labour across sectors. This has caused companies to actively seek skilled professionals to drive innovation and productivity. Demographic Shifts: Factors like ageing population and declining birth rates are reshaping the UK's labour market. With a declining pool of young workers entering the workforce, employers are facing competition for talent. Technological Advancements: The high rate of technological advancements is transforming job roles and skill requirements across industries. Automation and digitization have created new opportunities while rendering certain traditional roles obsolete. As a result, employers are seeking candidates with advanced technical skills and adaptability to navigate the digital space effectively. In the midst of the tight labour market conditions, employers are advised to adopt proactive measures to attract and retain top talent. As the UK's labour market continues to evolve, organisations must remain proactive in addressing emerging challenges and opportunities. By prioritising talent development, fostering a culture of innovation, and embracing flexible workforce strategies, employers can position themselves for sustained success in an increasingly competitive landscape. The tightening labour market in the UK presents both opportunities and challenges for employers across sectors. Collaboration, creativity, and a dedication to talent development will be crucial in guiding sustainable growth and prosperity as we negotiate the intricacies of today's labour market.

Pay growth continued to outpace inflation in autumn 2023, but at a slower rate than seen earlier in the year, official figures have shown, reports Personnel Today. Annual growth in employees’ regular earnings excluding bonuses in Great Britain was 6.6% in September to November 2023, while average total earnings including bonuses grew by 6.5%, according to the Office for National Statistics’ January 2024 labour market figures. 🔹 When adjusted for inflation measured by the consumer prices index, regular pay rose by 1.4% compared with a year earlier and total pay increased 1.3%. 🔹 There were signs of a struggling labour market in October to December 2023, when the estimated number of vacancies in the UK fell to 934,000, down by 5% from July to September. 🔹 This was the 18th consecutive quarterly drop in job openings, the longest run of quarterly falls ever recorded by the ONS, but this period is traditionally a quieter time for recruitment activity. 🔹 Only four industry sectors saw quarterly percentage growth in their average vacancies from July to September 2023: real estate, administration and support, construction and finance and insurance. Comment from Jonathan Boys (CIPD), Matthew Percival (CBI (Confederation of British Industry)), and Julia Turney (Barnett Waddingham). #wagesandsalaries #warfortalent #earnandlearn #skillsgaps #vacancies2023

The latest labour market figures show unemployment on the rise and vacancies continuing to drop, but lower inflation has seen real-terms pay growth increase. The number of payrolled employees in the UK fell by 18,000 (0.1%) between January and February 2024, but rose by 352,000 (1.2%) between February 2023 and February 2024. The employment rate (for those aged 16 to 64 years) was estimated at 74.5% in December 2023 to February 2024, below estimates of a year ago and a decrease from the latest quarter. The unemployment rate is also up on the year and the quarter, at 4.2% in December 2023 to February 2024. Meanwhile, economic inactivity for people aged 16-64 was up at 22.2%, above estimates of a year ago (December 2022 to February 2023), and up in the latest quarter. In January to March 2024, the estimated number of vacancies in the UK fell by 13,000 on the quarter to 916,000. Vacancies fell for the 21st consecutive period but were still above pre-pandemic levels. Jon Boys, senior labour market economist for the CIPD, the professional body for HR and people development, said that the figures may lead to the Bank of England cutting interest rates. He told HR magazine: “With unemployment up and employment down, today’s statistics show a cooling labour market. Other evidence of cooling includes the continued fall in vacancies, and an uptick in the redundancy rate. “Taken together, this will ease pressure on recruitment and retention. It may also lead to the Bank of England cutting the base rate sooner.” Annual growth in employees' average regular earnings (excluding bonuses) was 6.0% in December 2023 to February 2024, or 1.9% adjusted for inflation. Annual growth in total earnings (including bonuses) was 5.6%, or 1.6% adjusted for inflation. ONS director of economic statistics Liz McKeown told HR magazine that slower inflation is pushing real-terms pay growth up. She said: “Recent trends of falling vacancy numbers and slowing earnings growth have continued this month, albeit at a reduced pace. But with the rate of inflation also slowing, real earnings growth has increased and is now at its highest rate in nearly two and a half years.” [HR Magazine] #Employment #CIPD #ONS

As we approach the half way point in the year (it will be once I have returned from holiday), I wanted to share some stats and facts about the UK job market this year; 𝙀𝙢𝙥𝙡𝙤𝙮𝙢𝙚𝙣𝙩 𝙖𝙣𝙙 𝙐𝙣𝙚𝙢𝙥𝙡𝙤𝙮𝙢𝙚𝙣𝙩: - The UK employment rate for January to March 2024 is 74.5%, a decline from 75.1% in the previous quarter and below the pre-pandemic levels (Gov.uk) (Office for National Statistics). - The unemployment rate stands at 4.3%, up from 4.0% a year ago, with 1.49 million people unemployed (Office for National Statistics) (House of Commons Library). 𝙑𝙖𝙘𝙖𝙣𝙘𝙞𝙚𝙨: - Job vacancies have decreased for the 22nd consecutive quarter, down by 26,000 to 898,000 from the previous quarter, yet they remain above pre-pandemic levels (Office for National Statistics) (House of Commons Library). 𝙎𝙖𝙡𝙖𝙧𝙞𝙚𝙨: - Nominal wages continue to rise, with total earnings including bonuses increasing by 5.7% annually (Office for National Statistics) (Prism Executive Recruitment). - The Midlands saw the steepest rise in starting salaries, reflecting ongoing wage pressures across the UK (Prism Executive Recruitment). I don't think any of the above will come as much of a surprise to anyone as we have been going through a period of adjustment within the UK market due to several factors post Covid. I am confident that things are settling down so fingers crossed we see a prolonged period of stability. I think working within the tech sector changes in the market can bring with it huge opportunity and as things settle down there will be a wave of new projects which we have already started to see. What are your thoughts on the remainder of 2024 and are you started to see project accelerate? #MarketInsight #MarketUpdate #UKMarket #ConspicuousRec

The UK economy is facing a number of significant challenges as we move through 2024, and these issues have important implications for both employers and jobseekers. Understanding these dynamics can help navigate the current landscape and prepare for the future. One of the most pressing concerns is the rising unemployment rate. As of early 2024, the UK's unemployment rate has increased to 4.3%, up from 4.0% the previous year. This is particularly stark among young people aged 16-24, where the rate has jumped to 13.0%. For employers, this means a larger pool of candidates but also indicates potential issues in job market stability and confidence. For jobseekers, particularly younger ones, the competition is fierce, making it crucial to differentiate themselves through skills and experience. Additionally, the UK is grappling with a trade deficit, despite a slight improvement in early 2024. The trade deficit was reduced to £4.1 billion in Q1 2024 from £7.3 billion in Q4 2023, yet challenges remain with both exports and imports seeing declines. For businesses, this might mean tighter margins and the need for innovative strategies to manage costs and sustain operations. Inflation and rising costs are also hitting businesses hard. A significant number of companies have reported increases in staffing costs, including wages, bonuses, and pension contributions. This trend affects profitability and could lead to more cautious hiring practices or even layoffs, adding to the uncertainty for jobseekers. Moreover, the overall economic outlook remains tepid with productivity showing minimal growth. Productivity was only 0.1% higher in Q1 2024 compared to the previous year. For employers, improving efficiency and productivity could be key to staying competitive, while jobseekers might find opportunities in roles focused on process improvement and innovation. Lastly, the number of online job adverts has significantly decreased, down 21% from the previous year. This reduction reflects the broader economic uncertainties and could signal fewer opportunities available. For jobseekers, this underscores the importance of leveraging networks, gaining additional qualifications, and being flexible in job search strategies. In summary, the current UK economic climate presents a complex mix of challenges and opportunities. Employers need to balance cost management with strategic investments in talent, while jobseekers must stay adaptable and proactive in a competitive market. Keeping an eye on these economic indicators can help both groups make informed decisions. #UKEconomy #Employment #JobMarket #Recruitment #BusinessStrategy #EconomicOutlook

As of 2022, the UK was home to approximately 5.5 million private sector businesses, with a notable distinction: 1.4 million of these businesses had employees, while a staggering 4.2 million operated without additional staff, essentially representing self-employed individuals. This statistic sheds light on the significant role of independent entrepreneurship within the UK business landscape, where nearly 75% of businesses function without engaging additional personnel beyond their owners. The evolving dynamics of the UK job market have been a subject of close scrutiny. Reports from August 2023 revealed a nuanced picture, with the private sector experiencing modest increases in staff demand, while public sector vacancy growth exhibited a cooling trend. The economic outlook has influenced hiring patterns, with a decline in permanent placements reflecting muted confidence. However, amidst these fluctuations, strong pay growth has been a notable constant, with regular pay seeing a real-terms increase. The broader labour market has faced its share of challenges, as evidenced by a drop in UK payroll numbers and a concurrent rise in unemployment. The number of workers on employers' payrolls decreased, and job vacancies experienced a consecutive quarterly decline. These trends underscore the complexities and adjustments within the UK's employment landscape. The resilience and diversity of UK businesses have been evident despite the prevailing challenges. The services industry emerged as the largest business sector, encompassing over 4.2 million businesses and representing more than three-quarters of all companies in the UK. Small and medium-sized enterprises (SMEs) continued to form the backbone of the business ecosystem, with over 99% of businesses classified as SMEs, employing 0-249 individuals. The interplay of these statistics offers a multifaceted understanding of UK business life, reflecting the prevalence of independent entrepreneurship, the nuances of the job market, and the enduring significance of SMEs within the country's economic tapestry. As the business landscape continues to evolve, these insights provide valuable context for stakeholders across various sectors. Sources: LinkedIn - August 2023 UK Job Market Report LinkedIn - UK's Labour Market Challenges Rise money.co.uk - UK Business Statistics 2023 Statista - Businesses in the UK UK Parliament - Business Statistics

The pulse of change in the UK's labour market is unmistakable. The REC and KPMG's recent findings reveal a significant downturn in employer demand for staff, a low not seen since the 2021 lockdowns. This isn't merely data; it's a pivotal moment for those of us in the workforce, signalling a time to reassess our career paths and strategies. The stark decline in hiring, especially for permanent roles, coupled with the fastest shrinkage in temporary staff billings since July 2020, marks a critical juncture. These trends are more than statistical fluctuations; they are key indicators guiding our professional decisions in an increasingly uncertain landscape. Furthermore, the slowdown in salary growth for new permanent positions, the most subdued since March 2021, might hint at a broader economic recalibration, potentially influencing the Bank of England's approach to inflation and interest rates. This complex interplay between wages and inflation deeply affects our financial planning and career expectations. As I reflect on these developments, the implications are clear. The accelerated decline in temporary billings is particularly alarming, underscoring the need for both professionals and companies to adapt swiftly to the evolving employment market conditions. Recent insights from the Bank of England, indicating a more cautious approach to staffing and wage projections, mirror the broader cooling trend in the job market. This moderation in expectations is not just an economic indicator; it's a critical pivot point for us in the workforce, necessitating a strategic rethink of our career trajectories. In this transformative phase, our adaptability, foresight, and resilience are paramount. These shifts in the labour market are not mere challenges; they are opportunities to realign our skills and ambitions with the changing demands of the economy. #economictrends #talentdemand #skillsdevelopment

UK earnings grew a little faster (annualised total pay growth of 5.8%) in December than anticipated, partly because the labour market was a little tighter (i.e., vacancies reduced slower, unemployment was lower) than expected. Also, #inflation still being higher in December (and before) will have been feeding thorugh to pay awards. #dataisbeautiful The chart below illustrates the far-from-perfect but pretty convincing relationship that exists between the vacancy rate - a good measure of labour market tightness - and pay growth. In fact, from first principles, it is a little surprising that the relationship is this tight, as you'd expect many other factors to play into changes in pay levels. Nevertheless, this gives us a nice basis on which to understand changes in pay - an issue of interest for both employers and employees (not to mention monetary policy makers). The purple start in the chart indicates the coordinates of the data in December 2023, and all other dots are other months since May 2001. The fact that the purple star is quite far to the right relative to the majority of the dots, and also quite high on the y-axis, indicates that in December, we still had many more vacancies than is "typical", and - unsurprisingly - wages grew faster than is typical, too. This data is non-seasonally adjusted, so there will be a fair amount of noise in it. Having said that, a similar pattern holds if you look at the data for each of the months of the year. Compared to other Decembers in the dataset, the purple star is still towards the top right hand corner of the chart; and above the regression line. The latter means that for the given level of vacancies, wages grew a little faster in December 2023 than you "would have expected". That's probably partially just noise, but the current high-inflation environment is another likey factor. Based on what I've seen from other analyses (and in organisations I've observed), there's always a bit of a delay in how high inflation feeds through to higher pay. In other words, employees will try to recoup past inflation in their pay demands. We have now seen positive real pay growth - i.e., wage growh considerably above inflation - since May 2023. I'd expect that the balance will now gradually shift in favour of employers, so that that "recouping" process will become harder for employees - especially if the labour market continues to cool. With benchmark inflation also coming down, that would suggest a slowdown in wage growth, which is indeed what most economists are expecting in the short term. As for the medium- and long-term many more shocks and developments - in either direction - could still take us on a different trajectory.

The rate of UK unemployment has dropped to 4.1% this quarter, data from the Office for National Statistics (ONS) has revealed. The official figures showed that the percentage of those out of work has fallen for the three months to the end of July from 4.4% the previous quarter. However, pay growth continues to slow, with wages excluding bonuses increasing by 5.1% in the three months to July. The last time it dropped below this was in the quarter to June 2022, when it was 4.7%. The ONS data also estimates that in June to August 2024, there were 857,000 job vacancies, down 42,000 on the quarter and 143,000 on the year. However, this is still 61,000 more than pre-Covid. Meanwhile, youth unemployment has soared to 13.3% – its highest level in three years. Among 18-24-year-olds, the percentage out of work in the three months to July had last been as high in January 2021, amid Covid lockdowns. Julia Turney, partner and head of platform and benefits at Barnett Waddingham, said: “The UK labour market is still grappling with ongoing issues. An ageing workforce and a large number of people disengaged or not participating in the workforce continue to contribute to productivity issues across the country. “To meet the government’s ambitious objective of ‘rebuilding our country’ and strengthening the labour market, these issues must be tackled head-on. This means a focused effort on improving wellbeing within organisations nationwide, while also ensuring targeted government initiatives are in place to increase productivity and steer us back on course. “Now is the time for both employers and policymakers to act —businesses must gain a deeper understanding of their people’s needs and invest in their retention. Meanwhile the government needs to implement meaningful reforms to ensure employees across all age groups feel supported.” In July, the government announced the launch of Skills England, with the aim of boosting the nation’s skills and getting people back into work. At the time. the Department for Education revealed that between 2017 and 2022 skills shortages in this country doubled to more than half a million, now accounting for 36% of job vacancies. [Personnel Today] #employment #ons