The latest labour market report from the Office for National Statistics highlights several important trends that may affect your business.

Firstly, the job market appears to be cooling down. There are fewer job openings now, indicating that businesses aren’t hiring as aggressively as before. Additionally, the unemployment rate has increased to 4.4%, higher than last year.

Regarding employment, the data presents a mixed picture. Recent surveys and tax data show a slight drop in the number of jobs. However, since December 2023, there has been an overall increase of 431,000 jobs, suggesting long-term growth despite recent declines.

Interestingly, the rate of people not working or actively looking for work has risen to 22.3%. This suggests that more individuals are staying out of the workforce for various reasons.

On a positive note for employees, but perhaps not for businesses, wages are rising. Regular earnings have grown by 6.0%. Even after adjusting for inflation, people are earning more, which is beneficial for employee morale.

However, there has been an increase in the number of people claiming unemployment benefits, both from last month and last year, now totaling 1.629 million.

Implications for Your Business

  • Reconsider Hiring Plans: With fewer job openings and more people out of work, it might be wise to focus on retaining and training your current employees.
  • Plan for Higher Wages: As pay rates are increasing, budgeting for higher wages is essential.
  • Flexible Work Options: Offering flexible work arrangements or training programs could help attract those who aren’t currently working.

Looking ahead, while there are short-term changes, the long-term trend indicates a slowdown in job growth. Focusing on sustainable business practices and long-term planning will be crucial to navigate these labour market changes.

For more information, see: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/june2024