February 2021 Update
According to the latest employment figures from the ONS (September – November 2020):
- The UK employment rate dropped by 1.1 percentage points on the previous year to 75.2% and fell by 0.4 percentage points compared with the previous quarter (June-August 2020).
- The latest data shows that the economy (GDP) increased by 1.2% in December 2020, following a revised 2.3% decline in November where there were more extensive restrictions to activity. GDP grew by 1% in Quarter 4 (Oct-Dec), following revised 16.1% growth in Quarter 3 (July-Sept).
- Growth in average total pay (including bonuses) among employees for this period increased to 3.6% and growth in regular pay (excluding bonuses) also increased to 3.5%; this impact is caused by a fall in the number and proportion of lower-paid jobs compared with before the pandemic.
- In real terms, total pay and regular pay is now growing at a faster rate than inflation, at +2.8%. Average pay has rebounded from the sharp falls during early summer 2020, with regular pay in November being at a record high.
- The estimated UK unemployment rate for all people (aged 16 years and over September to November 2020) was 5.0%; this is 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter.
- The proportion of workforce on furlough increased through November 2020, reaching 16% in the period 16-29th November, but it then decreased to 11% between 30th November – 13th December 2020.
Permanent placements in January fell after a mild upturn in December, driven by the reintroduction of national lockdown measures, however REC research produced in partnership with KPMG this month showed that temporary recruitment grew in January for the sixth month in a row, whilst growth in short-term vacancies moderated.
Commenting on the latest survey results, Neil Carberry, Chief Executive of the REC, said:
“With the vaccination programme making progress, it’s likely that a path out of the pandemic is emerging. As that happens, we expect a strong recovery in permanent hiring.”
January 2021 Update
According to the latest employment figures from the ONS (August – October 2020):
- The UK employment rate dropped by 0.9% percentage points on the previous year to 75.2% and fell by 0.5% percentage points compared with the previous quarter (May-July 2020).
- This quarter saw a real term growth in average total pay (including bonuses) among employees. For the three months August to October 2020 average pay increased to 2.7% and growth in regular pay (excluding bonuses) also increased to 2.8%. For total pay, this is the first time that the index has been on positive territory since the three months to March 2020.
- The estimated UK unemployment rate for all people (aged 16 years and over August to October 2020) was 4.9%; this is 1.2 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter. For context full employment in the UK is considered 5%.
- Surprisingly, this quarter employment rates increased for women. Estimated employment rates for men are down 1.9% on the previous year. However, the employment rates for women are 0.1% up on the previous year.
- Business hiring confidence increased as growth has been identified in the vacancy sector with 1.77 million active UK job adverts in December 2020, which is approximately 10.5% more than in December 2019.
- Estimates for August to October 2020 show 32.52 million people aged 16 years and over in employment, 280,000 fewer than a year earlier. This was the largest annual decrease since January to March 2010.
However, REC research produced in partnership with KPMG this month showed that total demand for staff has risen for first time in three months, with temporary vacancies rising at a much steeper rate (up by 26% compared to last year) than that seen for permanent workers. It was encouraging to read the comments of Neil Carberry, Chief Executive of the REC:
“The underlying strength of the British economy shone through in the December jobs figures. The biggest expansion in temporary recruitment since October 2018 shows how important the flexible jobs market is to that performance. Growing permanent placements and starting pay also emphasised the resilience of our economy”.
So whilst the latest employment statistics from the ONS may appear pretty gloomy, we can take encouragement from the most recent REC research and words of James Stewart, Vice Chair at KPMG who said:
“… with the UK leading the way on the vaccine roll out and continued government financial support, there is hopefully light at the end of the tunnel for both business and jobseekers.”