Labour Market Update – September 2023


Labour Market Update – September 2023

Labour Market Overview

As a leading provider of human resource solutions across the region we wanted to share with you latest trends and insight for the month of September.

The latest ONS Labour Market Overview reported:

  • 4.3% or 1.46 million people were unemployed; an increase of 159,000 on the previous month and 0.3% higher than pre-pandemic levels largely driven by people unemployed for up to 12 months
  • Unemployment amongst young people remains high (aged 16-17 at 16.8% and aged 18-24 at 12.2%)
  • The employment rate decreased slightly to 75.5%
  • 8.78 million people are economically inactive, 63,000 higher than the last quarter largely driven by people aged 16 to 24
  • Economic inactivity is still 411,000 higher than pre-pandemic levels, and a record 606,000 are classified as long-term sick but want to have a job
  • The total UK workforce jobs fell slightly to 36.7 million
  • Vacancies fell again to 989,000, the 14th consecutive period fall, down 268,000 from a year ago, but higher than pre-covid levels
  • Payrolled employees remained similar to the previous quarter at around 30 million, up 449,000 over the 12-month period
  • Median monthly pay has increased by 6.7% compared to 12 months ago and 21.4% since February 2020
  • 6.1 million people were claiming Universal Credit in July. This has increased from 5.5 million in March 2023 and is higher than the previous peak in March 2021. There were 1.4 million people searching for work
  • Redundancies were 3.6 per thousand employees, an increase previous quarter but still lower than pre-pandemic levels

The CIPD latest Summer 2023 Labour Market Outlook reported that many employers have hard to fill vacancies, particularly in the public sector. Those facing hard to fill vacancies are doing everything from upskilling staff, to raising wages, to tackle them. To retain staff many employers are even making counteroffers. Key findings:

  • Net employment balance remains stable
  • Redundancy intentions rising in the public sector
  • Employers with low wage staff hit by NMW increase
  • Expected pay rises in public sector hit new peak
  • Counteroffers more common in past 12 months and often exceed value of existing offer

The Food and Drink Federation has published its State of Industry Report Q3 2023. It found that labour shortages cost businesses £1.4bn over the last year, with companies being forced to leave vacancies unfilled and reduce production – all of which contributes to rising wage bills, higher prices, and stifles growth, which is vital for a strong economy.

The latest Report on Jobs produced by the REC and KPMG reports that overall permanent billings in August decreased.  The data shows pay pressures remain sharp for permanent workers and temp wages also increased across all four English regions, with London seeing by far the steepest rate of pay inflation, and in Scotland. This is partly because of a shortage of labour with specific skills.

Demand for both permanent and temporary staff increased during August, but temp staff demand expanded at a solid pace. Moreover, labour supply also increased during August for permanent and temp staff.

HR Review reported that employment support services provided by local job centres have come under heavy criticism in a recent report by the Institute of Public Policy Research (IPPR). The study suggests that the current approach, based on financial conditionality, is failing both job seekers and employers, leading to inappropriate job applications and wasted resources. IPPR calls for a complete overhaul of Jobcentre support services to create a new universal service focused on quality rather than quantity.

The Department of Works and Pensions Resettlement Team, have advised that many refugees have now been transferred to being the responsibility of local authorities. This is in line with a statement made by Robert Jenrick, the immigration minister. This change means that many refugees are now linking in with local jobcentres to find work. There is estimated to be around 12,000 Afghans and 80,000 Ukrainians that are seeking work.

Home Office immigration and nationality fees go up on the 4th October 2023. The Sponsor Licence fee for small and large sponsors will remain the same as will the cost of the priority fees for sponsors, however, the fee for assigning a certificate of sponsorship will be increasing from £199 to £239 from 4th October 2023. The fee increases will have a more significant impact on the individual’s visa and related fees. Therefore, employers who provide assistance with these fees should be mindful of these change increases also. Examples of increases for individuals include:


Please note the list provided is not exhaustive. Given that each candidate’s immigration process often involves multiple applications, the cumulative additional cost can become substantial.

Additionally, it’s important to be aware that the Immigration Health Surcharge (IHS) is also due to increase at some point this Autumn (exact date to be confirmed), rising from £624 to £1,035 per person per year for most primary applicants.


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