The number of days lost to strikes rose to its highest level in a decade in October, as real pay fell by 2.7%.
There were 417,000 working days lost because of industrial action in October, including major strikes by rail workers and Royal Mail staff, according to the Office for National Statistics’ labour market data for August to October 2022.
The figures also show that a gulf has formed between private and public sector pay growth. Average weekly wages not including bonuses grew by 6.9% in the private sector compared to the corresponding period in 2021 – the largest growth rate ever seen for the private sector outside of the pandemic period. However, regular pay in the public sector increased by only 2.7%.
The ONS said this was among the largest differences between public and private sector pay growth rates it had seen.
Both rates are also significantly below inflation, which in the year to October 2022 grew by 11.1% at the consumer prices index measure.
Across the economy as a whole, growth in average total pay (including bonuses) and regular pay (excluding bonuses) among employees was the same at 6.1%. Thiss the strongest growth rate in regular pay seen outside of the Covid-19 pandemic.
Ben Harrison, director of the Work Foundation at Lancaster University, said it was unsurprising that public sector workers including nurses, ambulance staff, civil servants and border staff planned to take industrial action before Christmas.
Pay growth and inflation
He said: “Failure to agree fair deals for public sector workers could have serious implications for the wider economy.
“Economic inactivity continues to be high, and just under 2.5 million people report long term sickness is preventing them from working. Addressing these challenges demands investment in public services – from the NHS to specialist employment support – and that includes investment in the workers who deliver them.”
Chris Gray, director at recruitment specialist ManpowerGroup UK, said it was challenging for employers to find ways to sustainably increase wages when costs and uncertainty remain high.
“Our anticipation is that this pay pressure will continue into the middle of next year at least, which means that many organisations will need to find short-term solutions as well as negotiate agreeable outcomes for the medium to longer-term,“ he said.
Recruitment activity slowing down
There has now been five consecutive quarterly falls in the number of vacancies, as economic pressures caused organisations to rein in their recrutiment activitiy, but the total number of job openings (1.18 million) remained at historically high levels in April to October 2022, the ONS found.
Early estimates for November 2022 show that the number of payrolled employees rose by 2.7% compared with November 2021, a rise of 777,000 employees.
Health and social work employers saw the highest increase in employees on payrolls (123,000 employees) between November 2021 and November 2022, while the wholesale and retail sector saw the biggest drop in employees (a fall of 16,000).
Jonathan Boys, labour market economist for the CIPD, said: “The fifth consecutive quarterly fall in job vacancies shows that employers are tapping the brakes but are a long way off from heading into reverse. It takes months to recruit, so vacancies are a good leading indicator of what’s coming around the corner. A recession may take some of the heat out of labour demand for some sectors, but sectors like health and social care are unlikely to be one of them, as pressure on the NHS continues to build.”
Despite the drop in vacancies, Recruitment and Employment Confederation chief executive Neil Carberry said labour shortages remained.
“The overall picture we see is one of a labour market that is still defined by labour shortage constraining its ability to grow. That’s why businesses need to work with their recruiters on innovative and effective strategies, and all firms are looking to government to act on some of the barriers – from skills to immigration, and right to work checks to employment support, there is a huge amount the government could do to fire up our labour market.”
ManpowerGroup UK’s Gray said that many organisations were recruiting to “maintain business as usual”, rather than to grow or diversify.
“It’s proving to be a real challenge for most industries, especially those that are labour intensive and operating in a low margin environment, as well as those that are consumer dependent. While it might seem counterintuitive at this time of uncertainty, businesses that have capacity to do so would be wise to invest in training and upskilling their staff which will help with their retention and overall productivity of the workforce in the longer-term,” he said.