Labour Market Update – July 2023


Labour Market Update – July 2023

Labour Market Overview

The latest ONS Labour Market Overview reported:

  • 4% or 1.37 million people were unemployed; an increase of 77,000 on the quarter and just 6,000 up on pre-pandemic numbers
  • Employment rate increased slightly to 76%
  • 66 million people are economically inactive, 141,000 lower than the last quarter driven by those aged 25 and over
  • Economically inactive is still 281,000 higher than pre-pandemic levels, largely driven by students and the long-term sick
  • Vacancies fell again to 1.03 million, the 12th consecutive quarterly fall
  • The estimate of payrolled employees for June 2023 shows a monthly decrease, down 9,000 on the revised May figure to 30 million, but a staggering 1.027 million up on pre-pandemic levels
  • Growth in total pay rose to 6.9% and regular pay was 7.3% and both fell in real terms by 1.2% and 0.8% respectively
  • Redundancies remained at 3.3 per thousand employees, lower than pre-pandemic levels

Centre for Cities tracks the latest unemployment claim statistics across the UK’s cities and largest towns. Its UK Unemployment Tracker measures how unemployment claims have changed since pre-covid. Select the city/town and the tracker provides the results. There are marked differences across the UK e.g., 7% of the working population in Birmingham are claiming unemployment related benefits compared to York at only 1.7%.

The REC Labour Market Tracker reported that the number of active postings in the week of 29th May to 4th June 2023 was over 2 million, down 2.4% from the previous week. Neil Carberry, Chief Executive of the REC said “Even if there are some signs of caution from employers in the face of economic uncertainty, shortages mean many firms are still hiring – and taking longer to do so……”

The KPMG and REC, UK Report on Jobs: North of England has reported the fastest rise in candidate availability since December 2020 as recruitment activity declines. Neil Carberry, Chief Executive of the REC, said: “The jobs market in the North of England overall remains fairly robust with vacancies and pay still rising, and unemployment low across the UK but there is a sense in today’s report that the UK economy will need some growth soon to sustain this positive picture. Permanent hiring has been slowing all year. To some extent this is normalisation as the post-pandemic boom abates – but it is also driven by uncertainty. This is seen in the scale of companies reshaping themselves while hiring in other areas – recruiters report that the North saw the fastest improvement in permanent and temporary candidate numbers since December 2020 with some of this due to layoffs. But it is also obvious in the way firms are relying on temporary labour to keep things going in uncertain times. Temping keeps people in work when firms are uncertain about the future path of the economy – it is a huge UK success story’

The Report advised that in regards to job vacancies a renewed slowdown in job vacancy growth across the North of England was recorded in July. While permanent job openings continued to rise, extending the current sequence of expansion which started two-and-a-half years ago, July’s upturn was the second weakest seen over this period. Temporary job vacancies rose only modestly during the latest survey period and at a slightly softer pace than seen across the UK as a whole. However in regards to staff availability the seasonally adjusted Permanent Staff Availability Index surged further above the 50.0 no-change mark in July and signalled the fastest improvement in permanent candidate numbers across the North of England since December 2020. Matching the trend in permanent staff availability, temporary candidate numbers rose at the fastest pace since December 2020 across the North of England during the latest survey period. Layoffs were mentioned as a reason for higher temp staff availability, although some surveyed recruiters noted that the candidates coming onto their books were lacking sought-after skills.

The Good Jobs Project aims to fill the UK’s 1.1m labour vacancies with people facing marginalisation. Their report says that many employers are struggling to fill vacancies, whilst individuals from marginalised groups, such as ex-offenders, homeless people, young people in or leaving care, refugees, those with mental health problems and the over-50s, are held back from accessing employment opportunities. The Project aims to support employers to intentionally target people that are commonly marginalised from accessing good jobs to fill their vacancies.

The Independent Review into Labour Shortages in the Food Supply Chain has been published with 10 recommendations, which “seek to address the short, medium, and long-term challenges faced by organisations in the food supply chain and to ensure a more resilient and prosperous industry that delivers quality and affordable food to consumers.” Recommendation 2, “Access to Migrant Labour” with regards to the Seasonal Worker route proposes, “Announce the replacement of the scheme by the end of 2023, guaranteed for a minimum of five years. Consider removing the cap on the total number of visas and extend the length of visas to nine months. Selected businesses should have the ability to directly sponsor workers. Employers should bear responsibility for the cost of the NHS health surcharge. A robust enforcement mechanism must be implemented and managed by the GLAA to reduce labour exploitation.”  The Government is expected to publish a response to the Review in Autumn 2023.

In summer 2022, Government introduced The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 which amended the Conduct Regs to enable labour providers to supply agency workers to cover the jobs of those on official industrial action. After legal challenge from a number of trade unions, the High Court ruled that the Regulations were unlawful, on the grounds that the Secretary of State had failed to comply with the statutory duty to consult before making the Regulations.


Immigration Update

The Migration Advisory Committee (MAC) has launched the Seasonal Worker visa inquiry: call for evidence. They want to hear views about the Seasonal Worker visa and how well it meets the needs of employers, employees and other organisations. The closing date is 19th September 2023.

The government have published a research briefing on the Seasonal Worker visas and UK agriculture. It reports that there are 471,000 people in the UK’s agricultural workforce, of which at least 58,000 are seasonal or casual labour. Farmers rely on workers coming from abroad to fill these seasonal roles. The current Seasonal Worker visa scheme has a quota of 45,000 to 55,000 per year. These visas are temporary with limited rights and extra safeguards

New immigration rules confirm that from September 2023 people with pre-settled status under the EU Settlement Scheme (EUSS) will automatically have their status extended by 2 years before it expires if they have not obtained settled status.  The Home Office press release also states that eligible pre-settled status holders will be automatically converted to settled status once they are eligible for it, without them needing to make an application. It says that during 2024, automated checks of pre-settled status will establish ongoing continuous residence in the UK and that safeguards will be in place to ensure that settled status is not wrongly granted.

Other updates to the immigration rules introduce an Electronic Travel Authorisation (ETA) Scheme requiring most people who travel to the UK to gain permission in advance of travel; the introduction of  the Innovator Founder route to replace the Start-Up route and updates to employment requirements in work routes.



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