Jobs market July 22

ended 18. July 2022

The latest jobs market data is out tomorrow morning at 07:00.If you'd like the chance to see your views in the local and national media, please answer the following Qs:

  • Are employers confident right now about hiring or are they battening down the hatches?
  • Who holds all the cards right now? Employers or employees? 
  • Are employees, in your experience, asking for pay rises to keep up with inflation, and by how much on average?
  • Are companies, many of which are under pressure for no end of reasons, struggling to offer pay rises?
  • Do you think unemployment is going to rise during the latter stages of 2022 and in 2023?
  • Are employees still demanding flexibility or are they increasingly happy to have a job as inflation and interest rates soar?

Any other thoughts or insights on the jobs market, jot them down. Please don't write War and Peace.

6 responses from the Newspage community

Data shows that business confidence is on the slide. The Business Confidence Index showed a surge in positivity coming out of COVID, but weakening signs for the economy are proving to have a big influence. Businesses have to cope with higher costs of raw material caused by the very high inflation rate. In turn, employees are demanding higher wages to keep up with the cost of living. They are also being hurt by their increased tax burden from higher national insurance costs and a big jump in corporation tax. I think neither employers and employees hold many good cards at the moment. Employees may well feel entitled to ask for an increase in their pay to keep up with the cost of living, but with a recession rearing its head, employers could think that redundancies are a better option. With economic data forecast to get worse in Q3 and beyond, it looks like unemployment will rise. Couple this with increasing interest rates to cope with soaring inflation and there will be some painful times to come. The good news is that when we finally get a new Prime Minister, they will have some fiscal head room to reduce taxes due to the economy continuing to grow in May, unexpectedly. This might make any forthcoming recession just a little bit less painful.
The UK economy is very much a case Dr Jekyll and Mr Hyde at the moment. Some firms are absolutely booming whereas others, exporters and importers in particular, are struggling. Staff recruitment is also a huge factor, with employees holding all the cards. Employees, seemingly able to pick and choose jobs at the moment, are demanding much more flexible working environments. And I think the government's call for wage restraint will fall on deaf ears in the private sector.
The balance of power is very much with employees at the moment. The market has shifted 180 degrees since the start of the pandemic and businesses are struggling to attract top talent. Many companies are having to bend over backwards to secure talent, from offering 15-20% increases on pre-pandemic salaries to fully remote opportunities. Businesses are really feeling the pressure of needing to invest in their staff. Employees are demanding flexibility and there is a reluctance to move back to the office on a full-time, or even hybrid, basis. The issues businesses face is that with employees holding all the cards, if employers do not offer flexibility and pay increases, their competitors will. You are no longer competing with local businesses now that travel and location isn't a major factor. The entire country has opened up to your employees so they need to do everything they can to retain them.
With the cost of living at the forefront of everyone's minds, pay and perks are key at present. Employers offering incentives such as working from home, free parking, electric charging points or subsidised staff meals will appear more attractive to prospective employees seeking a more cost-effective job choice. Job vacancies continue to outweigh the number of applicants at the moment, which means that organisations are struggling to attract top talent. Employers are having to look at pay as a means of attracting applicants, but the importance of building a strong employee proposition has never been more important. Employees expect flexibility, hybrid working and above average benefits as there remains a reluctance to return to the office full time, and employers are pitted against each other to win the race to recruit. With remote working commonplace now, job candidates are able to spread their search wider than ever before in applying for jobs anywhere in the world. Employers are no longer able to simply match their nearest competitor and remain the top choice.
The pandemic enabled many people to work remotely, something many employers hadn't allowed before. They got to choose how/where they worked. Many loved this extra control and the freedom it provided. It gave some people the encouragement to take even more control of their working lives, giving up their jobs completely, hence the Great Resignation. It is becoming harder for traditional employers to lure them back. People want the ability to influence their own lives, not have it dictated to them by their employers. However, not everyone wants to run their own business. A stable income is still high up most people's wish list. Employee ownership can provide the perfect balance. You're not responsible for everything, you have teammates to help and you get a regular wage. But you also have power to influence how the company runs. If it performs well, you reap the benefits. People are prepared to work, but are demanding more. Empoyee ownership breaks down the barriers between owners and workers. It's the future of healthy capitalism.
The labour market is still red-hot in the UK, but falling real wages means that we’re seeing a tale of two economies. Despite concerns about sky-high inflation and a potential recession, the UK job market is still strong. The number of payrolled employees and job vacancies continue to grow and remain historically high, particularly in face-to-face industries including healthcare and hospitality. However, overall vacancy growth has begun to slow. Here are three trends we'll be watching for in the ONS July labour market overview: 1. Rate of growth in job vacancies to continue to decelerate, if not fall. 2. Regular real wage growth to remain negative. Real growth in regular pay (excluding bonuses) has consistently remained below inflation for the past several months. With year-over-year inflation in the Consumer Price Index (CPI) hitting a 40-year high of 9.1% in June, this trend looks set to continue. 3. Economic inactivity to fall for students and rise for long-term sick. As we reach the end of the academic year with a bumper labour market, many of those who chose to pursue university degrees to avoid the coronavirus recession will be leaving school and rejoining the labour market. On the other hand, the numbers of economically inactive due to long-term illness have ticked up over the past year, perhaps due to increased long COVID. With coronavirus rates again on the upswing, expect to see a slight increase in this measure.