{"id":13363,"date":"2022-09-26T19:46:37","date_gmt":"2022-09-26T18:46:37","guid":{"rendered":"https:\/\/www.hiringlab.org\/uk\/?p=13363"},"modified":"2022-10-13T15:48:51","modified_gmt":"2022-10-13T14:48:51","slug":"september-2022-labour-market-update","status":"publish","type":"post","link":"https:\/\/www.hiringlab.org\/uk\/blog\/2022\/09\/26\/september-2022-labour-market-update\/","title":{"rendered":"September 2022 UK Labour Market Update: Hiring Challenges Unlikely to Dissipate Anytime Soon"},"content":{"rendered":"\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Job postings remain elevated and resilient to the slowing economy.&nbsp;<\/li><li>Demand remains particularly strong in lower-paid categories, some of which have seen 7-9% year-on-year growth in nominal advertised pay.&nbsp;&nbsp;&nbsp;<\/li><li>Inactivity jumps amid rising long-term sickness rates, pushing the unemployment rate even lower even as employment dips.&nbsp;<\/li><li>Real wages continue to be squeezed by high inflation.<\/li><\/ul>\n\n\n<style>\n       .errordiv { padding:10px; margin:10px; border: 1px solid #555555;color: #000000;background-color: #f8f8f8; width:500px; }#advanced_iframe {visibility:visible;opacity:1;vertical-align:top;}.ai-info-bottom-iframe { position: fixed; z-index: 10000; bottom:0; left: 0; margin: 0px; text-align: center; width: 100%; background-color: #ff9999; padding-left: 5px;padding-bottom: 5px; border-top: 1px solid #aaa } a.ai-bold {font-weight: bold;}#ai-layer-div-advanced_iframe p {height:100%;margin:0;padding:0}<\/style><script type=\"text\/javascript\">var ai_iframe_width_advanced_iframe = 0;var ai_iframe_height_advanced_iframe = 0;function aiReceiveMessageadvanced_iframe(event) {  aiProcessMessage(event,\"advanced_iframe\", \"true\",\"\",\"false\",\"false\");}if (window.addEventListener) {  window.addEventListener(\"message\", aiReceiveMessageadvanced_iframe);} else if (el.attachEvent)  {  el.attachEvent(\"message\", aiReceiveMessageadvanced_iframe);}var aiOnloadScrollTop=\"true\";var aiShowDebug=false;\n\t\tif (typeof aiReadyCallbacks === 'undefined') {\n\t\t\tvar aiReadyCallbacks = [];\n\t\t} else if (!(aiReadyCallbacks instanceof Array)) {\n\t\t\tvar aiReadyCallbacks = [];\n\t\t}    function aiShowIframeId(id_iframe) { jQuery(\"#\"+id_iframe).css(\"visibility\", \"visible\");    }    function aiResizeIframeHeight(height) { aiResizeIframeHeight(height,advanced_iframe); }    function aiResizeIframeHeightId(height,width,id) {aiResizeIframeHeightById(id,height);}<\/script><iframe id=\"advanced_iframe\"  name=\"advanced_iframe\"  src=\"https:\/\/hiring-lab.github.io\/visualization-data\/#GB\"  width=\"100%\"  height=\"585\"  frameborder=\"0\"  border=\"0\"  allowtransparency=\"true\"  loading=\"lazy\"  style=\";border-width: 0px;;border: none;;width:100%;;height:585px;\" ><\/iframe><script type=\"text\/javascript\">var ifrm_advanced_iframe = document.getElementById(\"advanced_iframe\");var hiddenTabsDoneadvanced_iframe = false;\nfunction resizeCallbackadvanced_iframe() {}<\/script><script type=\"text\/javascript\"><\/script><p style=\"display:block !important; visibility:visible !important;margin: -18px 14px 0 0;padding-left: 3px;padding-top:3px;background: white; overflow: hidden; position: relative; line-height:15px;width: fit-content;\"><small style=\"display:block !important;visibility:visible !important\">powered by Advanced iFrame<\/small><\/p>\n\n\n\n<p><strong>Resilient job postings trend continues<\/strong><\/p>\n\n\n\n<p>Real-time data from Indeed job postings continue to indicate strong demand for staff. Postings were 43% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 9 September 2022. Though down from a post-pandemic high of 50% on 31 March, the trend has remained resilient to mounting economic headwinds amid the cost of living crisis. Postings have been sustained at a high level by a robust inflow of new job postings.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/he2pbd8w6DRBK_iy7frM3QL8dsBL80TKrFdIMj5OfL9JxmWXHvph-Zjf4TPu325hgLUFbWuEUh6wPDlt53Bn1R70FTPrGlZtWh1yjp6Y9HszZAY2ya55c6xFMBKwVf99wIw_4VnQAxGIgQCZYjgj4uGdOAV8Z9_3Z23Mx5TV9gaLBGwoyW-WDvgBQA\" alt=\"A line graph titled \u201cJob postings on Indeed UK\u201d showing the percentage change in job postings on Indeed UK since 01 Feb 2020, to 09 Sep 2022.\" \/><figcaption><em>A line graph titled \u201cJob postings on Indeed UK\u201d showing the percentage change in job postings on Indeed UK since 01 Feb 2020, to 09 Sep 2022. There was a 43% change in UK job postings on a seasonally adjusted basis over the period.<\/em><\/figcaption><\/figure>\n\n\n\n<p>Job postings remain elevated in a number of categories, though some have seen a correction in recent months. Four categories <strong>\u2014<\/strong> retail, loading &amp; stocking, cleaning &amp; sanitation and therapy <strong>\u2014<\/strong> have at least doubled since the onset of the pandemic. Retail and therapy have gained momentum since the start of Q2, but most of the other leading categories have seen a correction.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/d8CQ9T3VVe_DUgaOQTpFmyPjt9qDtAnUhCIv6kmBBaV3tHjLIeCCafuD6TwLcE4axJ2RK50OlhmDoyLqGfuF1lZHZqbHomHCp1VLcVosiemjoJt-IZ-M9Gd5gVNVMHx_TowufNND-gzW-PnvqY11o500QlqAgRUCtxNPVMpX9_1U6b4ijS53ClsmqA\" alt=\"Chart showing that job postings remain high in a number of sectors, including Retail, Loading &amp; Stocking and Cleaning &amp; Sanitation.\" \/><figcaption><em>Chart showing that job postings remain high in a number of sectors, including Retail, Loading &amp; Stocking and Cleaning &amp; Sanitation. Retail job postings are up 125% through 9 September 2022 since 1 February 2020, the pre-pandemic baseline, while Loading &amp; Stocking is up 121%.&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p><strong>Lower-wage job postings continue to outperform<\/strong><\/p>\n\n\n\n<p>With most of the leading categories being lower-wage ones, there remains a considerable gap in job postings performance across wage tiers. Despite a slight recent softening, the lower-wage tier remains 69% above the pre-pandemic baseline, comfortably ahead of the mid- and high-paid tiers (34% and 40% respectively).&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/UTj_bz1SdMxhWAbh6U1gSjlZrzDcI5Ie6dLGnIPYH93TObelItv5n2h3hRL457CLxsdZNd0fMVoIh228QYcejF-yN0I9PFTmca0vnVVPYlPtMcplJhQuz6atDSIEa3G8UpuXcDpMcA7irT3JOUz4cmZ0JAF5ULpmuJNETbncE4RqmpRx6xY2UYZvGA\" alt=\"Line chart showing the job postings trend from 1 February 2020 to 9 September 2022 across low, mid and high-wage tiers.\" \/><figcaption><em>Line chart showing the job postings trend from 1 February 2020 to 9 September 2022 across low, mid and high-wage tiers. The low-wage tier continues to outperform by a considerable margin.&nbsp;&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p><strong>Labour Market Overview<\/strong><\/p>\n\n\n\n<p>We\u2019re starting to see signs of the labour market losing momentum, as cost of living pressures <a href=\"https:\/\/www.reuters.com\/world\/uk\/uk-economy-slides-into-contraction-august-pmi-suggests-2022-09-05\/\" target=\"_blank\" rel=\"noreferrer noopener\">weigh<\/a> on the UK economy and the post-pandemic jobs boom seemingly fading. The latest figures from the Office for National Statistics (ONS) showed the employment rate slipping further to 75.4% in the three months to July, down from a recent peak of 75.9% in the period to May.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/TOScTmdRpOpWnHCTi4kUwkXkGNVR9RJcoPPE5koZ62EaePb0XOMepajOjha8G12yK8R5IdYO343Zz-psLPUy9iqVASr0Ka0Wc2pUY-7bMrSqyj3r3ZnNDEG3aZg0lmxy5E3Oor6tMwmo72IkfCSc07fix-Quh9uC4zjlIEPzBKEusIBoJQ5avSyj-Q\" alt=\"Line chart showing the employment rate from January 2017 to July 2022.\" \/><figcaption><em>Line chart showing the employment rate from January 2017 to July 2022. The employment rate dropped back to 75.4% in the three months to July, the second successive decline.&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p>Vacancies dropped 33,000 in August on the single-month measure, though remain close to record levels. With the unemployment rate dropping to just 3.6%, there remains extreme tightness in the labour market with fewer than one unemployed jobseeker per vacancy.<\/p>\n\n\n\n<p><strong>Inactivity jumps&nbsp;<\/strong><\/p>\n\n\n\n<p>The rate of economic inactivity jumped in the three months to July, reversing its recent falls to hit its highest since late-2016. The UK is an <a href=\"https:\/\/learningandwork.org.uk\/resources\/research-and-reports\/participation-gap-labour-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">outlier<\/a> internationally in having a lasting participation gap in the wake of the pandemic. The latest jump was centred on the 16-24 and 50-64 age groups. Rising student numbers and a continuation of the concerning trend of growing<a href=\"https:\/\/www.ft.com\/content\/c333a6d8-0a56-488c-aeb8-eeb1c05a34d2\" target=\"_blank\" rel=\"noreferrer noopener\"> long-term sickness<\/a> were key drivers.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/sNtxf1_6wPJAELvzxQ7H7Ijd7ym5OWJtSD9U2p_DtTT-GtDq-pXuHKkHe3CRASYBsxzOKE4DVej6-aNUcQ7DmHengiQ-u5yK8rWDbD0gxKq5UTRZ7I6JQ37KnmsHQ7jXX_fjLMAyRfBADFf82oo7y_OxJAMRulD3xAOOHhYdlrLOkGdJZ8T6Y4Xxng\" alt=\"Line chart showing the rate of economic inactivity from January 2016 to July 2022.\" \/><figcaption><em>Line chart showing the rate of economic inactivity from January 2016 to July 2022. The inactivity rate rose to 21.7% in the three months to July, its highest since late-2016.&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p><strong>Real terms pay squeeze<\/strong><\/p>\n\n\n\n<p>Despite historically strong nominal regular pay growth at 5.2% year over year (y\/y), high inflation meant that real wages were down -2.8% y\/y, one of the largest falls on record.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/JwtVk-WuRN8jPw0ZL-OCP_AFQVeOU7aZSkgzVv7yPjKKsVqDP0ljMj7PGqxP7HKS6OU-NxFqRiVMkqnMYVsz9Y-r1YDswoIIlfGb8WbRFitedjM8cckDpe_vUffnhXu_UIMgd69GBnt9vzsk_RA42qMVb3o9n_dS6aG8vV1YEtqSt6fuFtaJN1lK5Q\" alt=\"Line chart showing year-on-year growth in regular pay in nominal terms and after adjusting for CPIH inflation.\" \/><figcaption><em>Line chart showing year-on-year growth in regular pay in nominal terms and after adjusting for CPIH inflation. Despite historically brisk nominal pay growth, real terms wages were down 2.8% y\/y in July.&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p>The squeeze on public sector workers is particularly acute. Their regular wages increased by just 2% y\/y in nominal terms compared with 6% for private sector workers, the largest gap on record outside of the pandemic period.&nbsp;<\/p>\n\n\n\n<p>In Indeed data, we are seeing that the high demand for new workers in low-paid jobs is driving pay growth rates higher. Several lower-paid categories continue to show robust annual increases in advertised wages in Indeed job postings, driven by persistent hiring challenges. That said, few categories are seeing wages keep up with <a href=\"https:\/\/www.ons.gov.uk\/economy\/inflationandpriceindices\/bulletins\/consumerpriceinflation\/august2022\" target=\"_blank\" rel=\"noreferrer noopener\">inflation<\/a>. The overall increase for all jobs is 6.0% y\/y.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/rPB8lsfa5_GExsL14PaGCOglWfxu8k74lbxWS4uOEaHAlXpydOmUT35BhTDKcKzpQR465Oz0HZLiO5OYRAuCaGi7jepyQpDlMxBiTa9JMJOSn3kjtn4z0hf4pcPNv0N763zOYU-YxdpTm0LQ40IrkmXTXT8gZr7UyMctaFxqQVamRRLAA7Abv2oSPw\" alt=\"Table showing year-on-year growth in advertised wages in Indeed job postings across categories.\" \/><figcaption><em>Table showing year-on-year growth in advertised wages in Indeed job postings across categories. In August, personal care &amp; home health saw the strongest rise at 9.5% y\/y, while the increase across all jobs was 6.0% y\/y.&nbsp;<\/em><\/figcaption><\/figure>\n\n\n\n<p><strong>Conclusion<\/strong><\/p>\n\n\n\n<p>The UK economy faces considerable headwinds but the labour market remains remarkably tight. Though an economic slowdown could result in vacancies retreating from current elevated rates, the labour supply picture remains concerning and hiring challenges don\u2019t appear set to dissipate any time soon. The tight labour market generating strong nominal wage growth is a clear concern for Bank of England policymakers as they grapple with inflationary pressures at a time when the government has announced a <a href=\"https:\/\/www.bbc.co.uk\/news\/uk-politics-63005302\" target=\"_blank\" rel=\"noreferrer noopener\">major fiscal expansion<\/a>.&nbsp;<\/p>\n\n\n\n<p>We host the <a href=\"https:\/\/github.com\/hiring-lab\/data\" target=\"_blank\" rel=\"noreferrer noopener\">underlying job-postings chart data on Github<\/a> as downloadable CSV files. Typically, it will be updated with the latest data one day after this blog post was published.<\/p>\n\n\n\n<p><strong>Methodology<\/strong><\/p>\n\n\n\n<p><em>All figures in this blogpost are the percentage change in seasonally-adjusted job postings since 1 February, 2020, using a seven-day trailing average. 1 February, 2020, is our pre-pandemic baseline. We seasonally adjust each series based on historical patterns in 2017, 2018, and 2019. Each series, including the national trend, occupational sectors, and sub-national geographies, is seasonally adjusted separately. We adopted this methodology in January 2021.&nbsp;<\/em><\/p>\n\n\n\n<p><em>The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit\u2019s HR Technology segment.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Labour market is cooling, but a spike in inactivity means it\u2019s getting even tighter.<\/p>\n","protected":false},"author":103,"featured_media":13364,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"recruiter-hub-blocks.php","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[252],"post_mwm_category":[349],"post_topic":[],"post_content_type":[],"post_duration":[],"post_actions":[],"post_franchise":[],"post_mwm_author":[305],"class_list":["post-13363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_mwm_category-state-of-the-labour-market","post_mwm_author-jackkennedy"],"acf":[],"yoast_head":"<!-- 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