Unemployment has fallen to the lowest level since records began in 1971, with the working age employment rate reaching 74.9% according to data from the Office for National Statistics (ONS).
The number of candidates in work climbed above 32 million for the first time in the three months to May. The ONS said a fall in joblessness pushed the unemployment rate down to 4.5% over the period, compared with 4.7% in the three months to February – the lowest rate in 42 years.
However, official earnings data showed total pay packets were down, due to higher inflation. Despite this, nominal pay growth jumped two per cent in the quarter to May compared to a year ago, from 1.8% in April.
Lee Biggins, Founder and Managing Director of CV-Library, is optimistic about the continuous drop in unemployment rates. “Our own job market data for the second quarter of 2017 has found that advertised job vacancies were up by 1.6% on the first quarter of the year, and 14.9% when comparing data from the same period last year,” he comments. “Not only this, but the ONS figures indicate that weekly earnings for employees have increased and we also found that salaries rose by an extremely promising 1.9% in Q2 2017, when compared with Q2 2016.”
Phil Sheriden, Senior Managing Director at Robert Half, however, warns that organisations cannot afford to become complacent with their retention efforts, as today’s workforce is ripe for disruption.
“High employment often brings challenges for retention and hiring as the availability of skilled talent continues to shrink, further fuelling the war for talent. Our research shows that 81% of human resources directors have concerns about losing a top performer, as the competition for talent intensifies.
“As we head into the summer month, maintaining productivity and success hinges on hiring and retaining the right talent — and keeping them motivated. With rising workloads, a growing talent shortage and workplace digitisation, today’s workforce is ripe for disruption.”
Director of Policy at the Recruitment & Employment Confederation (REC), Tom Hadley, is voicing concerns about the UK’s need to have a robust immigration system to continue to attract talent crucial to the survival of our economy.
“With the unemployment rate at its lowest since 1975, there is no relief for employers struggling to fill vacancies,” he said. “We rely on people from abroad and need an immigration system based on this reality. At the same time, employers are reaching out to encourage applicants from underrepresented groups and are reviewing hiring practices. The Matthew Taylor report, published yesterday, encourages businesses to drive good employment practices, which is increasingly important as a way of attracting and retaining staff.”
He adds that whilst pay isn’t keeping up with inflation, REC’s data shows that employers are increasing starting salaries in a bid to attract candidates, putting those with the right skills at an advantage.