The Office for National Statistics has released the latest labour market figures. Pleasingly showing that the rate of unemployment rate has dropped over the 3months to February 2017 to 4.7%. Twleve months ago it was 5.1%. The rate has not been lower since June to August 1975.
Employers want more employees and are increasingly wanting those employees full-time workers. All workers whether they are full or part time are working more hours.
Worryingly along side the increased demand for workers the number of vacancies is now at its highest level since records began, suggesting that there are simply not enough people available to fill all the vacancies that employers have.
The increase in demand for workers coupled with a shortage of candidates should create a growth in wages, but this is not happening.
TUC General Secretary Frances O’Grady, has described the Consumer Price Index (CPI) published in March 2017 which showed an inflation rate of 2.3% as meaning that, “Rising prices and sluggish pay increases mean that real earnings growth has now ground to a halt. Without government action, another living standards crisis is on the cards. We urgently need more investment in skills and infrastructure to build strong foundations for better paid jobs. And it’s time to scrap the pay restrictions hitting midwives, teachers and other public servants.”
The ONS have described the earnings situation as meaning that annual real wage growth is at its lowest rate since 2014.
It is likely that seasonal factors have given the jobs market a boost.
Doug Monro, co-founder of Adzuna, said “that their website now has a total number of advertised job vacancies sitting at 1,126,376, so there are still numerous opportunities available to jobseekers and employees alike.”
The question remains do the candidates have the skills that employers are looking for?
The pay rates listed in job adverts on Adzuna is starting to show a slight increase but says Doug “it not be at a rate worth celebrating quite yet but it does show the resilience of the labour market and is a promising indicator of future growth.”
We do need the talent pool, both domestic and international, to keep pace with the labour market, however, there are still some questions that need to be answered as the country gears up for Brexit.
Former Chancellor George Osborne has said that he wants to win the race to becoming the FinTech centre of the world, but the UK is neither creating a home grown workforce with the necessary skills or attracting international workers to fill the gap. It is debatable how Brexit will affect this.
The Spring Budget did promote spending on the development of IT experts and access to people with digital and IT skills so perhaps the outlook for the medium-term future could be quite bright. But in the short-term, British business will need to take real care to maintain access to overseas talent.