UK Labour Market Update Q1 2022 (1)

Written by Leigh Foster

From a hirer’s perspective, the UK labour market is still proving to be a frustrating place to find top talent as we end the first quarter of 2022.  Below I have sourced some statistics to show the current position of the market and where it's predicted to go as the year progresses.

  • There is a continuing recovery in the labour market, with a quarterly increase in the employment rate and a decrease in the unemployment rate. However, economic inactivity has increased slightly on the quarter.
  • The UK employment rate increased by 0.1% on the quarter to 75.6%. Full-time employees drove the increase in the employment rate during the latest three-month period. While the number of part-time employees decreased strongly during the coronavirus (COVID-19) pandemic, it has been increasing June 2021. However, the number of self-employed workers remains low following decreases through the coronavirus pandemic.
  • Our most timely estimate of payrolled employees shows another monthly increase (up 275,000) in February 2022 to a record 29.7 million.
  • The number of job vacancies in Q1 2022 rose to a new record of 1,618,000. This is an increase of 105,000 from last quarter, with half of the industry sectors showing record highs. However, the rate of growth in vacancies is starting to slow down quite rapidly.
  • Growth in average total pay (including bonuses) was 4.8% and growth in regular pay (excluding bonuses) was 3.8% amongst employees. In real terms (adjusted for inflation), growth in total pay was 0.1% and regular pay fell on the year at negative 1.0%. Strong bonus payments over the past 6 months have kept recent real total pay growth positive.   However, we are now comparing the latest period with a period where certain sectors had increasing numbers of employees on furlough because of the winter 2020 to 2021 lockdown, so a small amount of base effect will be present for these sectors. This will not be to the degree we saw when comparing periods at the start of the coronavirus pandemic.

That is just a snapshot of where we are at right now.  The prediction is as the year continues the number of vacancies will start to drop as the job market cannot continue with the above number on an ongoing basis, it’s just not sustainable.

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