Unemployment on the rise as job vacancies and real wages fall
The UK’s employment rate grew by 0.2 percentage points to 75.6%, which is almost one percentage point lower than before the pandemic.
However, unemployment was also found to have increased, albeit only marginally, over the same period. It now stands at 3.7%, up by 0.1 percentage points from the previous three-month period, and 0.3 percentage points below pre-pandemic levels.
The ONS noted that while part-time employees have been gradually decreasing since the beginning of 2022, there was an increase during the latest three-month period. Meanwhile the number of people with second jobs has increased slightly over the latest quarter, by 43,000, to 1.253 million.
It also revealed the number of job vacancies over the period fell by 65,000 to 1.187 million.
Elsewhere, the ONS found that between August and October 2022, growth in total and regular pay both fell by 2.7% in real terms. That’s among the largest falls in growth since comparable records began in 2001.
According to the Trades Union Congress (TUC), workers have lost, on average, £76 a month in 2022 as a result of their pay not keeping pace with inflation.
Safer to stay put
Many workers are opting to stay put, prioritising job security, rather than hunting for a new job according to Danielle Asano, managing director of Cherry Professional.
She said: “Many are concluding that a job they’ve been in for some time is more secure than a new one. What is apparent is that, when it comes to attracting talent, it is still very much a ‘buyer’s market’ and employees are in the driving seat, looking for improved benefits, flexible working, purpose and culture, and someone to invest in them.”
This was echoed by Chris Maslin, director of Go EO, who said that some have a ‘better the devil you know’ mentality when it comes to their current job.
He said: “They are reluctant to risk moving jobs given the cost-of-living crisis, the fact that a highly uncertain winter is approaching and due to the old adage that those last in are often first out. I can’t see this stasis in the market changing until spring.”
Shifting balance of power
Lily Shippen, director of recruitment firm Lily Shippen, said that sky-high inflation and rising interest rates were “taking their toll on a growing number of companies”, meaning that those employees that are still hiring are “more measured in their approach”.
She added: “Interview processes are far less rushed than a few months ago. The roles being recruited for now have been through a rigorous process to get sign-off. It is mainly business-critical roles pushing forward to being hired. The ‘nice to have’ roles take slightly longer to move through the process.
“The balance of power is swinging back towards being in favour of employers. Candidates still have options, and there are fewer job-seekers than jobs, but companies may not be as flexible as they would have been a few months ago.”