The September 2023 ONS Market Overview provides a comprehensive snapshot of the current state of the UK labour market. This report sheds light on critical indicators such as employment rates, unemployment rates, pay trends, and job vacancies, offering valuable insights into the future of the country's workforce.
In this article, we will delve into the data presented in the report, analyse its implications for enterprises and employers, and provide a guide for navigating the UK labour market through the lens of data driven recruitment in light of these findings.
Let's start by looking at essential data from the report that can help UK businesses understand the market and plan their strategies:
The UK employment rate was estimated at 75.5% in May-July 2023, down 0.5% from the previous quarter, primarily due to a decline in full-time self-employed workers.
The unemployment rate increased by 0.5% to 4.3% during the same period, with a notable rise in those unemployed for up to 12 months.
The economic inactivity rate increased by 0.1%, reaching 21.1% in May-July 2023, primarily driven by individuals aged 16 to 24, while long-term sickness-related inactivity hit a record high.
Annual growth in regular pay was at 7.8%, the highest since 2001. Total pay growth, including bonuses, reached 8.5%, influenced by one-off payments in the healthcare and civil service sectors.
According to ONS recruitment data, vacancies fell by 64,000 in June-August 2023, marking the 14th consecutive quarterly decline. There has been a drop of approximately 17% in the retail industry in job openings compared to last year. Meanwhile, the Accommodation and Food Service sector experienced a decrease of about 29% in job openings during the same timeframe.
July 2023 witnessed 281,000 working days lost due to labour disputes impacting workforce stability, primarily in the Education and Health sectors.
Economic inactivity impacts workforce participation and productivity, especially among youth and those on long-term sick leave.
Let us understand the implications of these data points for businesses, especially regarding hiring, allocating, and managing the workforce.
The ONS data for September 2023 reveals a concerning talent gap in the UK labour market. The challenge for employers is evident with a 0.5% increase in unemployment rates. This necessitates innovative hiring and development strategies to bridge the skills deficit.
The ONS report also indicates a continuous decrease in job vacancies, with a decline of 64,000 in June-August 2023 alone. This trend poses a significant challenge for businesses, requiring them to compete more fiercely for the available talent.
According to the ONS data, annual growth in regular pay stood at 7.8%, the highest since 2001. This underscores the importance for enterprises to offer competitive compensation packages. Additionally, with flexible work arrangements in demand, employers should adapt to these preferences to attract and retain top talent in a competitive market.
In a post-pandemic era, addressing remote work preferences and work-life balance is crucial for keeping employees engaged and motivated. The ONS data from September 2023 highlights that the economic inactivity rate increased slightly by 0.1% in May-July 2023. This increase, particularly among people aged 16 to 24, signifies the need for employers to address evolving workforce preferences. Many individuals now prioritise remote work options and a healthy work-life balance, significantly impacting their engagement and motivation.
Creating an employer brand that resonates with evolving workforce values is essential to stand out and attract the right talent in a changing job landscape. The ONS data indicates a record-high annual growth in regular pay at 7.8% in May-July 2023, reflecting the changing dynamics of the labour market. To attract and retain the right talent, employers must establish an employee-centric brand aligning with these shifting values. This can be done by communicating employer value proposition (EVP) in the job description in order to attract the talent that aligns with company culture. Companies that prioritize employee well-being, career development, and a supportive work environment can have a competitive edge in attracting top talent in this evolving job landscape.
The ONS overview highlights the dynamic nature of the UK labour market, emphasising the imperative for innovation among enterprises and employers. Companies must reconsider and revamp their recruitment strategies to attract, engage, onboard, and retain talent.