Job vacancies have fallen to their lowest level in almost four years, reflecting lessening demand for workers as employment costs rise.
According to the latest labour market statistics from the Office for National Statistics (ONS), the number of jobs on offer fell to 781,000 during the first three months of this year.
The number of open jobs fell to pre-pandemic level for the first time, the ONS said. The number of workers on payrolls also dropped by 78,000 in March, revised down from the previous month.
Average UK pay over the three months continued to rise, up 5.9%. However, this could be driven by employers preparing for last week’s increase to the national minimum wage and an increase in employer national insurance costs.
Labour market
The UK unemployment rate remained roughly the same as the previous three months, at 4.4%.
The employment rate for people between the age of 16 to 64 was 75.1%, still short of the government’s ambition of 80% employment.
Neil Carberry, chief executive of the Recruitment and Employment Confederation, said the real question was whether the slowdown would abate.
“There are some cautious reasons for optimism in employers’ reported views of their own business prospects, and in the relatively stable levels of unemployment and employment, and economic inactivity that is finally starting to drop.
“But there are also huge headwinds related to the sheer cost of employment, that the government would do well to take seriously as a threat to recovery.”
Carberry said the government needed to “offer business more than warm words” as they prepared for the Employment Rights Bill and dealt with rising costs.
“While a rebound in hiring is expected in 2025, recent global trade disruptions have brought fresh uncertainty,” he added.
“Targeted support for sectors such as automotive is welcome, but businesses are still waiting for a clear industrial strategy to unlock long-term investment across the economy. It is time for competitiveness to enter the chat.”
Seemanti Ghosh, principal economist at the Institute for Employment Studies said: “Against the backdrop of a slowing economy, marked by weaker productivity growth and dampened business sentiment, and with nearly one in five working-age adults out of the labour force, rolling out the government’s industrial strategy cannot come soon enough.
“Initiatives focusing on the expansion of voluntary employment support such as the launch of the new Connect to Work employment scheme and individually tailored support via the proposed Jobs and Career Service are a positive step.
“But success will be dependent on creating a joined-up system, working closely with employers and taking a long-term approach, and much relies on the economic landscape, with a downturn potentially undermining new policy initiatives.”
The Labour Market Survey has been beset by challenges thanks to a significant drop in response rates. There are concerns these issues may not be resolved until at least 2027, and the ONS has said its jobs figures should be treated with caution.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
