REC Response to ONS Labour Market Figures, August 2023

The ONS has published its latest labour market statistics this morning, Kate Shoesmith, REC Deputy Chief Executive, said:

“This is a labour market shifting to new ground and will be one the Bank of England and government will closely monitor because of the direct impact it is having on the economy. The unemployment rate is marginally above most predictions and we’re getting a sense of a loosening jobs market – where the demand for talent in certain sectors remains high, while there is a fall back in demand in other key sectors. These issues are deeply intertwined. For example, it’s particularly concerning to see the record high of economically inactive people because of long-term sickness, meanwhile, we continue to see significant problems recruiting and retaining staff in the health and care sectors. We need a fundamental rethink of the models of work in the NHS and beyond.  

“The labour market remains tight enough to continue to put pressure on employers by pushing up pay, with the highest regular annual growth rate we have seen since comparable records began in 2001 – but much of this will be down to recent pay deals negotiated and is one to watch closely. Pay is important, but it is not the only thing employers should consider. Today’s workers weigh pay against the whole package, such as flexible working, training, annual leave – and even whether the corporate culture aligns to their personal values. This is why our Overcoming Shortages report last year stressed to employers the importance of working conditions and getting the offer right.

“The fact there are still over one million job vacancies calls for a better jobs matching service. This is where high quality recruiters and employability experts can make a real difference to an overstretched system. The government can then focus on greater support for people with disabilities and long-term health problems, and comprehensive care services – as these are the barriers that prevent people from getting and staying in work.

“More broadly, today’s data points to why we need a plan for economic growth and investment in the UK. A proper industrial strategy that tackles the big issues we face, and fully encompasses workforce thinking around skills, transport, access to work and immigration is long called for and urgently needed.”