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Latest NewsEconomics, government & businessInflationJob creation and lossesLabour market

ONS data: Uncertainty continuing to suppress recruitment

by Ashleigh Webber 18 Apr 2023
by Ashleigh Webber 18 Apr 2023 The real estate industry saw the biggest fall in vacancies in January to March 2023
Image: Shutterstock
The real estate industry saw the biggest fall in vacancies in January to March 2023
Image: Shutterstock

Job vacancies continued to fall in January to March 2023, as economic pressures forced many employers to hold back on recruitment. 

The latest labour market figures from the Office for National Statistics (ONS) showed that economic uncertainty was still weighing heavily on organisations, reflected in the number of jobs being posted and growth in wages.

The estimated number of vacancies fell for the ninth consecutive quarter, dropping by 47,000 to just over 1.1 million. Availability of jobs fell in 13 of the 18 industry sectors tracked by the ONS, with real estate activities, mining and quarrying seeing the largest falls.

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There were 1.2 unemployed people per vacancy, which is a slight increase from the previous quarter and suggested that organisations looking to fill jobs had more choice over candidates, but only by a narrow margin.

Pay growth continued to be eroded by high inflation. Average weekly pay including bonuses in December 2022 to February 2023 fell 3% compared with the same period a year ago, when adjusted for inflation, while pay excluding bonuses fell 2.3%. These are among the largest falls in pay since ONS records began in 2001.

This is despite seeing growth in the headline pay figures (5.9% for pay including bonuses and 6.6% without bonuses).

The difference between private and public sector pay packets also continued to narrow. The average public sector pay packet grew 5.3%, while private sector pay without bonuses grew 6.9%. This could partly be due to ongoing pressure from unions in the public sector.

The ONS labour market figures from April 2023 also showed there were 348,000 working days lost because of industrial disputes in February 2023, up from 210,000 in January 2023. Over three-fifths of the strike days in February were in the education sector.

Ben Harrison, director of the Work Foundation at Lancaster University, said: “This is another challenging set of figures for workers who are seeing their wages fall in real terms for the 15th consecutive month. With inflation still high at 10.4%, it is vital public sector industrial disputes are resolved as quickly as possible to ensure those on low and insecure incomes are better able to deal with the cost of living crisis.

“Participation in the labour market remains a big issue too. While economic inactivity has fallen to 21.1% driven by a fall in the number of students, that risks masking the fact that long-term sickness continues to rise by 89,000 on the quarter.

“Instead of further tightening benefit sanctions – which the government’s own research suggests doesn’t result in more people in work – the focus should be on improving the quality of jobs available. In the forthcoming King’s Speech, the government has a final chance to introduce a new Employment Bill to strengthen job security and flexibility to attract more people back to work – it should end the delay and get on with it.”

The ongoing industrial action shows that many are unsatisfied with their jobs, and employers need to act on this, said Jonathan Boys, labour market economist at the CIPD.

“It’s not just about pay. Excessive workloads and a lack of flexibility also undermine people’s wellbeing and work-life balance, which has led to large numbers of people dropping out of work completely. Employers must focus on providing quality jobs with flexibility, autonomy and meaning to retain and attract staff,” he said.

Job board Indeed has seen evidence of employers scaling back their recruitment efforts, said its UK and Ireland economist Jack Kennedy.

After the fall in inflation expected in March failed to appear, the clamour for pay rises from workers will only get increasingly intense until the government wrestles it back under control.” – Jim Moore, Hamilton Nash

“For example, employers’ use of signing bonuses, which soared during acute worker shortages, has reduced as competition for new hires abates. Today, the share of job postings offering a joining bonus has dipped below 0.9%, from a peak of 1.1% in November,” he said.

Jim Moore, employee relations expert at HR consultancy Hamilton Nash, suggested that employees’ demands for pay rises will continue as inflation fails to drop off at the rate that has been expected.

“After the fall in inflation expected in March failed to appear, the clamour for pay rises from workers will only get increasingly intense until the government wrestles it back under control,” he said.

“Employers that can’t afford to give pay rises need to confront the issue head-on and be honest with their staff. Workers will be more likely to understand if they feel that their concerns are being acknowledged.

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“Don’t make promises that you might not be able to keep, and it’s better to offer staff a small pay increase than give none at all. Employers can also consider alternatives to pay rises, such as more flexible working arrangements or considering a four-day week.”

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Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

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