Experts from the UK’s staffing industry have been commenting on the latest employment figures from the Office for National Statistics. Published last week, the new data shows the unemployment total tumbling by 53,000 to 1.54 million in the first three months of 2017, while the share of people aged 16 to 64 now in work has reached 74.8 per cent.
Kevin Green, the Chief Executive of the Recruitment and Employment Confederation (REC), highlighted the growing signs of a worsening skills crisis in the UK, which are implicit in the data. The REC’s own surveys confirm that candidate availability has been falling.
As real income continues to decrease, people are becoming aware that the best way to obtain a pay hike is to change jobs, Mr Green said. Recruiters are reporting that starting salaries are rising as hirers seek to attract talent with pay incentives. Yet, he noted, some people are being deterred from moving jobs by indications that the economy is “creaking.”
Following the 8th June election result, Mr Green warned, whichever party forms a Government will have to tackle the numerous challenges involved in keeping the jobs market in a healthy state. A pressing priority will be dealing properly with the skills shortage, as UK businesses will inevitably suffer if they are unable to fill vacancies.
He called for “serious investment in skills” for jobseekers and an agile and pragmatic approach to immigration if labour market needs are to be met.
Meanwhile, Julia Kermode, Chief Executive of the Freelancer and Contractor Services Association (FCSA), an Umbrella Company trade association, welcomed the rise in permanent hiring, which she said reflected growing business confidence.
However, warning of forthcoming labour market problems, she added: “Self-employment decreased slightly last quarter, but year-on-year, the 381,000 increase in the UK workforce includes [more than] 82,000 self-employed, which is 21.5 per cent of the increase in people working. However, we are also seeing some early indications of difficulties ahead, with CIPD’s survey results issued yesterday suggesting that 19 per cent of organisations expect to announce a pay freeze, with wages set to rise by just one per cent in the year ahead.”
Ms Kermode went on to observe that, should the CIPD’s predictions prove accurate, businesses are likely to become more cautious about expanding their permanent headcounts and turn instead to skilled contracting professionals and other freelancers, using short-term talent to plug staffing deficits and manage fluctuations in demand. Such a development, she added, would turn out to be good news for the UK’s flexible professional contracting community.