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Tight labour market

ended 04. September 2022

Tomorrow (Monday) morning at 09:30, the Office for National Statistics is publishing a report entitled, How tight is the UK labour market?, with the following preamble: A labour market is “tight” if vacant jobs are plentiful and available workers are scarce. This article considers broader measures of labour market availability and indicators of mismatch between unemployment and vacancies across industries. Please answer any or all of the following Qs:

  • How tight is the UK labour market overall in your experience?
  • How tight is the jobs market in the sector(s) that you cover?
  • To what extent have Brexit and the pandemic contributed to tightness in the labour market?
  • Do you expect more slack to appear in the labour market as people rush to get jobs as the cost of living crisis bites?
  • Do you see unemployment levels rising in the months ahead?

Any other thoughts, jot them down. We'll issue your responses to the media tomorrow AM when the report is published.

4 responses from the Newspage community

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Sam Alsop-Hall
Chief Strategy Officer at Clive Henry Group
We’re in the business of supporting the NHS, VSE and Charity sectors and the employment picture is frightening right now. Recently, the NHS confirmed that the number of vacant posts had reached a record high of 132,139 – almost 10% of its planned workforce. This is also a sharp increase too as it’s an increase of almost 30,000 from the end of June figures. The real issue is that there isn’t a quick fix here, as the vacant posts are often highly specialised and essential to maintain the sustainability of health services. The reason for the vacancies are long standing and systemic issues around pension benefits, low morale and now pandemic-induced early retirements. Traditionally, the workforce gap would have been met by agencies like ours supplying temporary workers, but government policy in recent years including tax changes like IR35, new frameworks and of course Brexit has meant even the agencies are now struggling to provide staff as the talent is so scarce. This is a particular problem for rural areas such a Devon, Shropshire and Sussex and is becoming a major problem as we have seen from NHS performance figures recently, especially in the context of a backlog of care and real terms funding cuts. It's also becoming an issue for charities who often provide niche skills such as eating disorder nurses, specialist mental health practitioners or crisis support workers. They are all in a war for talent that doesn’t currently exist and they’re also in a war for non-clinical staff with organisations like Amazon, DHL or EDF who can pay more and provide better benefits for call-handlers or shift workers.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The labour market is very tight in the UK, but it’s lower paid jobs that can’t be filled. Brexit has caused chaos with filling these positions and we are seeing shortages everywhere from the hospitality industry to the NHS and social care. The looming recession might push people, who wouldn’t normally do these jobs, into accepting these positions. This could mean that the unemployment rate remains low. People in low paid work will find the next 12 months a struggle. Inflation will outstrip increases in wages for these positions, potentially significantly. We need to see an acceleration in the policies to support employment. A cut in corporation tax may help stave off a glut of redundancies. Liz Truss has a massive to-do list and she needs to start quick.
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Cheney Hamilton
CEO at The Find Your Flex Group
The labour market certainly feels to be tightening, but from the conversations we are having it's not due to a labour shortage, but more to labour becoming unaffordable. Inflation is driving salaries up as workers try to deal with the cost of living crisis, which for many smaller and larger businesses working to small margins, means that they just cannot attract the people they need to operate. We at the Find Your Flex Group have been saving multiple Tech and Talent Acquisition people from redundancy caused by mergers or a withdrawal of flexibility, who are coming to us to find secure, well paid, outcome-based working (the only way to work flexibly). More and more of our clients are now choosing to opt into accessing these shared workforce teams to deliver their business needs too, when faced with the current employment marketplace, as they don't create any fixed costs (useful as we head toward recession). When you also get the benefit of accessing talent pools that you could not afford if trying to hire directly and the people within our teams get the flexibility they need and are able to earn more, by working for multiple companies, synchronously, it creates a win-win for both parties and eliminates the business risks of a tightened labour force.
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Sarah Loates
Director at Loates HR Consultancy
Demand for labour is outstripping supply. And employers find themselves in a death spiral of inflation-busting pay offers and endemic counter-offer culture. The latest CIPD Labour Market report found that the hiring boom has not yet peaked. We’ve been advising clients to adopt a two-pronged approach, with targeted niche attraction and strategies to retain existing employees. If employers are losing talent as fast as they are recruiting new talent, the reality is employers are running to standstill.