Employers need to get creative as employment rate rises

The UK’s employment rate has hit 74.6% – the joint highest since records began back in 1971, figures from the Office for National Statistics reveal.

The findings, released today, show the number of people in work continued to increase – up 39,000 on the latest quarter to 31.8m, while the UK’s unemployment rate remained at 4.7%, though the number of people unemployed fell by 45,000 to 1.56m in the three months to February.

Welcoming the figures, Mariano Mamertino, EMEA economist at global job site Indeed, noted the UK unemployment rate hasn't been this low since 1975, the year Queen’s Bohemian Rhapsody was released.

"With the number of people in work up and unemployment level down, rhapsodies of praise about the UK jobs market certainly won't be in short supply.

“On the surface the jobs market is firing on all cylinders but the UK labour market has been adding jobs at a much slower pace over the last six months so the big picture may not be as rosy as it seems.

“For those in the know, the only show in town has been a contest between wage growth and inflation. The two have been level pegging and wage rises are only just keeping pace. For now pay is rising at 2.3% so real wages are actually falling in real terms once you exclude bonuses.  
 
“Productivity growth is also still well below its pre-downturn trend and this is certainly one of the reasons why wage growth is struggling.”

Meanwhile, Lee Biggins, founder and managing director of CV-Library, said the figures further confirm what a strong position the UK’s job market is in right now. 

“Not only are there more people in work, the employment rate is at the highest that it’s ever been and this indicates that business confidence is at an all-time high.

“We always expected these figures to be high, given that the early part of the year is one of the busiest times for recruitment, and our own data found that job vacancies grew by 38% and 7.6% in January and February respectively.

“There is one concern, however, and that relates to pay growth. With inflation continuing to rise, and average earnings not keeping pace, this could place employees in a compromising position going forward.”

And Recruitment & Employment Confederation CEO Kevin Green said the figures point to a labour market moving in a positive direction, with employment at a record high and unemployment still falling. 

“Our monthly jobs report shows placements via recruiters are increasing and demand for staff is at an 18-month peak, so it's likely employment numbers will continue to creep up.

“However, wage growth is slowing as inflation is rising, meaning people are feeling the pinch as their take-home pay doesn’t stretch as far. Our data shows employers are increasing starting salary offers to compete for the limited talent available. People will be tempted to move jobs as a way of increasing income, especially if pay in their current role remains static. As demand for staff increases yet supply of candidates deteriorates, employers need to reward their staff so they retain them.

“It’s already really tough to find candidates and skills shortages have been intensifying. Sectors across the economy, from healthcare to food manufacturing, are reliant on EU workers. They’re getting increasingly worried about how they’ll cope if recruiting from abroad becomes even harder post-Brexit.”

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