UK job vacancies down, but income rises still lower than inflation – ONS

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The number of UK job vacancies fell by 75,000 in the last quarter of 2022 but remains at historically high levels, according to figures released today by the Office of National Statistics.

At the same time the number of employees on payroll increased slightly by 28,000, putting the salaried workforce above pre-pandemic levels. The rate of economic inactivity dropped by 0.1%. The number of redundancies increased to 3.4 per thousand jobs, but remains low.

The unemployment rate rose by 0.2 percentage points over the quarter to 3.7%, but fell over the full year. Unemployment is highest in the North East (4.7%) and lowest in the South West (2.1%).

Average nominal wages increased by 6.4% between September and November 2022, but fell by 2.6% in real terms, when adjusted for inflation. Nominal wages in the private sector (7.2%) were more than double the nominal rises in the public sector (3.3%).

Matthew Percival, the CBI’s Director for People and Skills, said: “The continued evidence of younger and older workers returning to employment is welcome news. There are early signs of softening in the labour market, but many businesses are still struggling to hire and record pay growth is not yet easing the cost of living crisis.

“The Government needs to pull every lever to ease shortages and strengthen the case for the business investment that is needed to drive growth and living standards. This means helping more people to overcome the barriers like the cost and availability of childcare or ill-health that are preventing them from working, and updating the Shortage Occupations List.”

Alexis Krachai, senior vice president at Sheffield Chamber of Commerce’s board, called for government help in training and recruitment, including an easing of the regulations around overseas workers.

He said, “The data validates what we are hearing from our business community and the members of Sheffield chamber across multiple sectors, multiple industries and at all levels of employment, businesses are facing real challenges recruiting and retaining staff.

“We have to be resilient, we have to be innovative, and we have to be agile. What the government needs to do is think about how the world has changed as a result of COVID how the labor market is looking, and then be very clear eyed and saying, it’s not that we reverse Brexit, but perhaps we do need to look at making it easier for businesses to be able to recruit from overseas – and that’s not just from Europe, but overseas overall, but recognizing that geography matters.

“So the British Chambers of Commerce are calling and it’s quite technical, are calling for more jobs to be classified by the government is capable of being filled by overseas workers. And that doesn’t that’s not unravelling Brexit. That’s not suggesting that Brexit was wrong. It’s just to acknowledge that the situation has changed, the economy has changed and that we need to be agile as a country to be able to attract the labor that we need to help grow our economy.

“The second thing, it’s really tough for all businesses at the moment dealing with the cost of living and energy prices and a tight labour market. What we also have to do is make it as easy as possible for businesses to be able to invest in training and workforce development to be able to improve the productivity of their employees, and to drive profitability in their businesses.

“At the moment when a business invests in capital equipment or research and development, they get in very simple terms of saving on their tax bill. We will be looking for the government to think about how can we incentivise local businesses to invest even more money in training and development to be able to improve the productivity of workers, which can drive increases in salaries.”