Employers and the government are being urged to do more to support young people enter, and stay in, employment, as latest statistics have shown the jobs market remains deeply challenging.
The latest figures from the Office for National Statistics have concluded job openings fell by 5.8%, to 718,000, between May to July across nearly all industries.
Labour market
Vacancies down 17% as labour market weakens
This was the 37th consecutive period where vacancy numbers had dropped compared with the previous three months, the ONS said, with vacancies decreasing in 16 of the 18 industry sectors.
Liz McKeown, director of economic statistics at the ONS, said: “The number of employees on payroll has now fallen in 10 of the last 12 months, with these falls concentrated in hospitality and retail. Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries.”
Responding to the figures, James Cockett, senior labour market economist for the CIPD, said they highlighted the need for more action to be taken to support youth employment.
As organisations grappled with rising employment costs, the government needed to refocus its efforts in supporting young people into work, he emphasised.
“The labour market is continuing to cool as vacancies continue to fall, reaching levels last seen in early 2015. The impact of the national insurance changes on employers’ costs is clear, with pronounced falls in employee numbers in hospitality and retail over the past year,” said Cockett.
“As employment costs increase, it’s critical that employers aren’t dissuaded from hiring young people. Industries like hospitality and retail provide meaningful job opportunities for young people at the beginning of their working lives.
“The government needs to go further than the youth guarantee and introduce an apprenticeship guarantee for all 16 to 24-year-olds, to provide valuable opportunities for young people to both learn and earn. Better training and employment opportunities will ensure they start their working lives on the right foot while helping employers build future talent pipelines,” he added.
TUC general secretary Paul Nowak welcomed the fact that average wage growth had remained stable at 5%.
“The government is raising national investment, repairing public services, and improving the support people need to get into work. This is putting Britain on the road to recovery,” he said.
“But more is needed. Bold action must continue to match the size of the problems we face. This should include improved support for disabled workers and a comprehensive youth guarantee,” Novak added.
Kate Shoesmith, deputy chief executive at the Recruitment and Employment Confederation, said the figures illustrated that the labour market remains “challenging”, with many businesses “maintaining a cautious approach to hiring”.
“Tackling economic inactivity, which saw a fall over both the quarter and the year, remains the single greatest challenge for this government if they are to ever achieve their goal of 80% employment,” she highlighted.
“With pay growth steadying overall after a volatile few years – prompted in part by inflating-busting rises in national minimum wage rates – now is the time for pragmatism from the Low Pay Commission before they make any further decisions on pay rates, and as the Bank of England continues to monitor interest rates closely. Business cannot afford further cost rises,” she added.
Catherine Foot, director of Standard Life’s Centre for the Future of Retirement, also highlighted the need to be tackling economic inactivity, particularly among the over-50s.
“The current slowdown risks more older workers leaving the labour market for good. This would significantly undermine efforts to boost participation and ease the UK’s chronic workforce shortages,” she said.
“Supporting more over-50s to stay in or return to work remains essential for turning our economy around and heading off a looming retirement savings crisis. Greater access to flexible working remains key, alongside action from employers and policymakers to promote age-inclusive hiring,” Foot added.
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