Graduate labour market update: moderation in hiring activity

Charlie Ball, Head of Labour Market Intelligence at Jisc, analyses recent data from the ONS, revealing a decline in the number of job openings across the UK

The July update from the ONS on the UK labour market is now out. This month's labour market figures continue to show signs of gradual cooling, with the number of vacancies still falling and unemployment rising. Earnings growth remains relatively strong although lower than a few months ago. 

• In the latest quarter, the employment rate decreased and remains below pre-coronavirus levels. The quarterly decrease was largely because of full-time employees and part-time self-employed workers, this decrease was partially offset by an increase in part-time employees and full-time self-employed workers. Meanwhile, the annual decrease was largely because of part-time workers.
• The number of people in employment with second jobs has been decreasing since mid-2023 but increased in the latest three-month period and on the year to 1.25 million (3.8% of people in employment).
• The number of total actual weekly hours worked has been generally increasing in the UK since the relaxation of coronavirus lockdown measures, but was largely flat during 2023. In the latest period (March to May 2024), total actual weekly hours worked increased on the quarter to 1.06 billion hours and are above the level a year ago (March to May 2023). The increase was largely because of increases in women's working hours, but men's hours also increased.
• Average actual weekly hours worked was at 32.1 hours per working week, remaining largely unchanged on the quarter but up 0.4 hours per week on the year.
• The estimated number of vacancies decreased on the quarter by 30,000 to 889,000 in April to June 2024. This was the largest quarterly decrease since December 2023 to February 2024. The largest decreases observed were in wholesale and retail trade: repair of motor vehicles and motorcycles, and accommodation and food service activities, which were down by 9,000 and 8,000 vacancies, respectively.
• When comparing April to June 2024 with the same time last year, total vacancies decreased by 151,000 (14.5%), with declines in 17 of the 18 industry sectors. The industries that decreased the most were wholesale and retail trade: repair of motor vehicles and motorcycles, accommodation and food service activities, and human health and social work, each of which fell by more than 25,000 vacancies. The only industry to increase on the year was water supply, sewage, waste and remediation, up an estimated 1,000 vacancies.
• The total estimated number of vacancies remains 93,000 (11.6%) above its January to March 2020 pre-coronavirus (COVID-19) pandemic level. The two industry sectors that have increased the most from their January to March 2020 levels are human health and social work activities, and professional, scientific and technical activities, which were up by an estimated 26,000 and 16,000 vacancies, respectively. Five industry sectors are currently below pre-pandemic levels, with a combined decrease of 30,000 vacancies. This includes wholesale and retail trade: repair of motor vehicles and motorcycles, down the most by an estimated 23,000 vacancies.
• In March to May 2024, the number of unemployed people per vacancy was 1.7, up from 1.6 in December 2023 to February 2024. This is because of declining vacancy numbers alongside rising unemployment.

Scottish data is also available.

• Early seasonally adjusted estimates for June 2024 indicate that there were 2.47 million payrolled employees in Scotland, a rise of 0.6 per cent (14,000) compared with June 2023.

Explore the figures for Wales.

• Early estimates for June 2024 indicate that the number of paid employees in Wales has increased by 1,100 (0.1%) over the month to 1.32 million.

The NISRA have analysed the data for Northern Ireland.

• The number of employees receiving pay through HMRC PAYE in NI in June 2024 was 808,000, an increase of 0.4% over the month and 2.4% over the year.
• NISRA, acting on behalf of the Department for the Economy, received confirmation that 310 redundancies occurred in June 2024. Over the year July 2023 to June 2024, 2,560 redundancies were confirmed, which was almost double the figure for the previous year (1,340).
• There were 390 proposed redundancies in June 2024, taking the annual total to 2,890, which was around three quarters of the figure for the previous year (3,730).

The regional summaries are also available.

• In March to May 2024, the highest employment rate in the UK was in the South East (78.4%) and the lowest was in Wales (68.7%).
• The largest change in the employment rate was in the North East, down 4.6 percentage points compared with estimates a year ago, while London saw the largest increase, up 1.1 percentage points. In March to May 2024, the highest unemployment rate was in the East Midlands (5.6%) and the lowest was in Northern Ireland (2.0%).
• Comparing June 2024 with the same period last year, changes in the number of payrolled employees ranged from a 2.4% increase in Northern Ireland, to a 0.5% increase in London.

The total number of online job adverts on 12 July 2024 decreased by 2% when compared with the previous week, according to ONS data from Adzuna.

• Over the last week, online job adverts decreased in 10 of the 12 UK countries and English regions. The largest decreases were in the South East, North East and London, where online job adverts fell by 3%. The only UK countries or English regions to increase were Northern Ireland and Wales, rising by 4% and 1%, respectively.
• The total number of online job adverts in the latest week was 21% lower than the equivalent period of 2023. All UK countries and English regions were lower than the equivalent period of 2023 with the largest year-on-year decrease in Scotland, falling by 31%.
• 40% of the UK workforce worked some or all of the time at home in June.

The British Chambers of Commerce are reporting more hiring difficulties in Q3 and are amongst a number of organisations flagging a shortage of workers in construction as a potential barrier for the new Government's plans to increase building.

• The latest Quarterly Recruitment Outlook (QRO), a survey of more than 4,700 UK firms of all sectors and sizes, by the British Chambers of Commerce Insights Unit, reveals hiring problems have increased across all sectors.
• The second quarter results for 2024 show that 59% of respondents said they had attempted to recruit in the last three months, slightly down from 62% in Q1. 80% of hospitality businesses attempted to recruit, whereas the figure for the retail sector was just 44%.
• Of the firms who tried to hire in Q2, 74% reported recruitment difficulties, compared with 66% in the first three months of the year.
• Construction and engineering firms are bearing the brunt of staffing issues, with 82% reporting recruitment problems in Q2, up from 69% in Q1. 79% of firms in the transport and logistics sector said they had faced difficulties (up from 69% in Q1). Meanwhile, in production and manufacturing, 77% of businesses trying to recruit faced problems, up from 70% in the previous quarter.
• Although most businesses are still struggling to increase investment in workplace training, Q2 did see a slight increase. 28% of firms reported an increase in staff training investment, up from 26% in Q1, with 11% reporting a drop. 61% reported no change in their investment plans for training over the past three months. 
• Labour costs continue to be the main external pressure on businesses in Q2, with 67% of firms saying they could be forced to put up prices as a result. Concerns around labour costs are highest in hospitality (77%), followed by construction and engineering (76%), and production and manufacturing (72%). 

REC's Labour Market Tracker, in conjunction with Lightcast, offers a similar story to the ONS and BCC.

• The number of overall active postings in June 2024 was 1,689,040 – down by 1.6% on the number of postings in May 2024 but still above pre-pandemic levels.
• There were 737,584 new job postings in June 2024 – a 2.6% decline from the month before.
• Of the top ten jobs with the highest increase in postings from May to June, five were related to the driving and logistics industry.
• Compared to the previous month, the Construction industry had a 1.7% increase in the number of job postings.

A major study from the Institute of Employment Studies, and Timewise has concluded that increasing flexibility for frontline and site-based roles leads to improved health and wellbeing, better work-life balance and increased job satisfaction.

• The Flex for All study , funded by Impact on Urban Health, examined three employers – Guy's and St Thomas' NHS Foundation Trust, Sir Robert McAlpine and Wickes – in a two-year long action research programme to introduce flexibility into frontline roles and evaluate its impact, on both the individual and the organisation
• It found that - increasing flexibility in frontline and site-based roles improved health and wellbeing, work-life balance, and raised levels of job satisfaction. For example, before the pilot, half of survey respondents agreed with the statement 'my current working arrangements allow me to maintain a good level of personal health and wellbeing' (51%). At the end, 82% of pilot participants agreed.
• Offering opportunities for increased flexibility reduced sickness absence, increased organisational loyalty and improved performance.
• All participating organisations experienced a change process that prompted a cultural shift in the way work is done. Good practice change management processes emerged as highly relevant to implementing these flexible working policies successfully (such as piloting, monitoring change and internal advocacy).
• Devolving responsibility to individual teams ensured that solutions were co-designed with those employees who would be affected by the changes, predicating success.
• Individual autonomy was central to accruing benefit from the flexibilities on offer. Where employees were empowered to choose approaches that worked for them and their team, they were better able to balance their work commitments with their personal priorities.
• The research found a strong demand for flexible options among employees.

Written by

Charlie Ball

Head of labour market intelligence

Jisc