This morning, the UK’s Office for National Statistics published its labor market overview for July.
This report found that that the UK’s labor market is recovering. The UK’s employment rate has grown by 0.3 percentage points in the past quarter to 75.1% and unemployment declined 0.2 percentage points to 4.7%.
In addition, the number of pay-rolled employees increased for the eight-consecutive month to 182,000 – however, this is 201,000 lower than pre-pandemic levels.
In good news, redundancies also reduced in the previous quarter and returned to pre-pandemic levels, while the UK saw a record monthly high of 1 million job vacancies in July.
ONS figures recorded that number of job vacancies between May and July was 953,000, which is 290,000 (43.8%) higher than the previous quarter, and 168,000 (21.4%) higher than pre-pandemic levels. Vacancies were growing across 10 of 18 industries and all business size bands measured by the ONS.
Wages are also on up. The ONS found there was an 8.8% increase in average total pay, including bonuses, and a 7.4% growth for regular pay if you exclude bonuses.
All of this suggests that the UK job market and employment rate is rebounding, which is particularly promising as the UK’s furlough scheme that aims to stop people becoming unemployed comes to an end in September.
Talking about the report, ONS deputy national statistician Jonathan Athow said:
— Office for National Statistics (ONS) (@ONS) August 17, 2021
UK Chancellor of the Exchequer Rishi Sunak MP said:
“I know there could still be bumps in the road but the data is promising – there are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched.”
However, while having lots of vacancies is good for the job market, is it good for companies? What do companies need to do to attract those unemployed or those employed looking for new opportunities?
According to SAP Concur’s managing director for small and medium businesses Ryan Demaray, “it is no surprise to see vacancy levels increase, as the country starts to return to normality and businesses open up once again.
“It is obviously positive to see businesses bounce back and unemployment reduced, but many organizations are struggling to recruit and some even facing a talent exodus.
“To overcome this, it is absolutely vital that businesses prioritize the employee experience to keep staff engaged and happy.
“The statistics are clear: companies that create exceptional experiences for employees face 24% less staff turnover than those that do not.”
How does the US job market compare?
The situation in the UK in July is similar to what is happening over the pond in the US.
June figures from the US’s ONS equivalent the Bureau of Labor Statistics suggested that nonfarm payroll increased by 850,000 and was 15.6 million higher than April 2020, despite being 4.4% lower than pre-pandemic levels.
Further growth was seen in July with nonfarm payroll rising by 943,000; this 16.7 million higher than April 2020. In addition, the unemployment rate fell by 0.5 percentage points to 5.4% and the number of unemployed people fell by 782,000 to 8.7 million.
This is a lot lower than figures for February to April 2020 but remains 1.9% and 3 million higher than pre-pandemic levels.
In other good news, the number of long term unemployed (those who have been unemployed for 27 weeks or more) in July fell by 560,000 to 3.4 million; this is only 1.1 million higher than in February 2020.
Average hourly earnings also increased by 11 cents to $30.54 in July, and the Bureau concludes that the rising demand for labor – linked with unemployment and the so-called ‘Great Resignation’ – may be the reason for the upward pressure on wages.