Following the announcement of the latest ONS labour market data published this morning, finance experts and recruiters based around the UK have been outlining how this is impacting real life out there in the day to day world of business, sharing their reactions as follows:
Commenting on the ONS data, Lauren Thomas, economist at Glassdoor said: “Companies have slowed hiring, with job vacancies continuing to fall. Data from Fishbowl by Glassdoor also suggests a rise in hiring freezes, with discussion of the topic increasing over 400% in the second half of 2022. Layoffs are another story: despite the reports of mass layoffs in tech, ONS data shows redundancies remain below their pre-pandemic norm. Glassdoor’s data shows concern about layoffs is concentrated amongst tech employees, with Jan 2023 mentions up 262% year-on-year. However, those in other industries seem less worried, with mentions for all workers only increasing 51% year-on-year. Salaries are always a hot topic for workers, but there’s no doubt employees are concerned about their pay keeping up with today’s rising prices: discussion of inflation surged 188% from Jan 2022 to Jan 2023.”
Dr Emily Andrews, Deputy Director for Work at the Centre for Ageing Better, said:
“There is again little reason for optimism for 50 plus workers in the latest labour market stats with the data again highlighting why the government is right to put increasing support for more older people back into the labour market so high up its priority list.
“It is a vital issue for individual people, for employers looking to fill skills and labour shortages and for the growth of an economy teetering on the brink of recession. The persistence of increased levels of economic inactivity for older people since the pandemic clearly indicate that the barriers to returning to the labour market later in working life remain and there are still very large numbers of people who remain locked out of it.
“There have been a considerable number of policies raised in recent weeks ranging from tax incentives to increasing GP’s involvement in employment support to changes to benefit rules. On March 15, we need to see an ambitious package of measures which meet the scale of this vital issue for the future of our economy.
“At Ageing Better, we would like to see a national programme of 50+ employment support to help people in this group find their way back into work. Support should be made available without having to come via the Jobcentre and should be specifically targeted to this age group, tailored to individuals and actively promoted to people in their 50s and 60s.
“We also need to see a much stronger message from government to employers that removing age-related barriers to work will be vital to driving growth in the coming years. Meanwhile, individual employers should take steps to ensure that they offer a supportive and attractive work environment for the recruitment, retention and training of older workers. Any business or organisation that wants to learn more about how to benefit from building a multigenerational workforce should sign up to Ageing Better’s newly-launched Age-friendly Employer Pledge.”
Jon Greer, head of retirement policy at Quilter said: “It is notable once again that the UK’s declining economic activity rate has been highlighted in this latest data set. Those aged 50 to 64 have been particularly in focus in recent months, having previously been cited as contributing to the decline. This has not gone unnoticed by the Chancellor who is looking to crack the UK’s productivity puzzle by incentivising older people to return to the workforce. He would do well in his upcoming Spring Budget to look at the perverse pension legislation that disincentivises people returning to work, such as the Money Purchase Annual Allowance (MPAA).
“Under current legislation, any individual who accesses their pension flexibly triggers the MPAA, with the effect of reducing their annual allowance from £40,000 to £4,000 and thereby limiting their capacity to save into a pension once they return to work. This provides a clear disincentive for older people to go back to work. The MPAA should be restored to the pre-2017 level of £10,000 per annum which would alleviate the risk of hitting the MPAA for most people.”
Lily Shippen, director of London-based recruiter, Lily Shippen: “Companies are confident in hiring right now. There has been a real sentiment shift in the past two weeks and we are taking on new roles constantly. The more upbeat signals from the Bank of England around inflation and the economy generally are feeding through into the average business. Companies must now back this up with speedy hiring processes and not drag their heels with interview processes. The balance of power still favours candidates for now but we expect this to start to this shift as the year goes on.”
Derrick Dunne, CEO of YOU Asset Management, commented: “Today’s unemployment report has been hotly anticipated after The Bank of England stressed it would be keeping a close eye on the jobs market, ever mindful of the inflationary impact of tight labour conditions.
“The ONS has revealed that UK unemployment held at 3.7% for the second month running, while average pay ticked up to 6.7%.
“Before it considers a reversal in the current path of hiking interest rates, the Bank’s Monetary Policy Committee (MPC) will want to see the jobs market weakening. With latest figures showing UK GDP growth to be slowing, this could be on the cards sooner rather than later, as companies begin looking to cut costs and maintain margins in anticipation of a recession.
“However, since labour market data is also the most lagging of economic variables – covering October to December in this instance – there is substantial risk that it could be too slow to react.
“The Bank is faced with an undeniably complex challenge, and it’s only when the MPC meets next month we’ll have the opportunity to see how it responds. For now, savers and investors should continue to be wary, while taking comfort in the fact that efforts to bring inflation under control should eventually bring more stability.”
According to Ben Williams, Co-Founder of employee performance platform, Loopin: “The tough fact is that one in four people are planning to resign from their roles, citing burnout and team management. Employers should be looking seriously at how AI can help them keep their people better connected and engaged with their work. Keeping hold of the best performing people has become a major challenge for employers, especially when replacing a team member costs over £30,600.”
Commenting further on the future impact of AI he said “People are also worried about the impact of generative AI and Chat GTP on the future security of their jobs and their industries. The best performing organisations should be looking at how AI can be used to help make working life better for their people and protect jobs rather than threaten them.”
Chris Maslin, director at Tunbridge Wells-based employee ownership specialists, Go Eo: “We’ve found it tough recruiting qualified accountants for several months now. Recruiters have told us there’s a dozen vacancies for every candidate they have. Rumour has it this is due to 50+ year olds who were forced to work less during Covid lockdowns, thoroughly enjoyed it, and haven’t gone back to full time employment. A big chunk of the workforce has effectively retired early. Salaries are certainly going up, due to the abject lack of supply of workers plus people needing it due to the increased cost of living. Margins are squeezed as it’s tricky to pass on cost increases to customers. Tough times lie ahead.”
Stephen Lowe, group communications director at retirement specialist Just Group, said: “The long-term trend for a rise in the number of workers aged 50+ has reversed since the lockdowns began with inactivity numbers much higher than pre-pandemic levels.
“There are about 256,000 more men over 50 and 351,000 more women inactive than at the beginning of 2020. Employment for aged 50+ is a mixed picture with a 36,000 rise for men but an 74,000 fall for women while activity levels remain subdued compared to pre-pandemic rates.
“It’s a worry that the recovery in the labour market is so anaemic for the over 50s and, with businesses struggling to recruit and many people struggling with cost of living increases.
“Rising costs would particularly affect those who have retired before State Pension Age and are mainly reliant on their personal pensions and other savings. It raises questions about how much support is being given to helping them get back into work and whether the government could do more to bring the skills and experience back into the workforce to help drive economic growth.”
Azar Hussain, managing director of Nottingham-based Rebel Recruiters: “As tech recruiters working with some of the most in-demand candidates in the UK, we’ve found that recruitment activity is still strong, but not at the crazy, unsustainable levels of this time last year. While there are more candidates now available, salary expectations remain high, a residual effect of the extreme candidate-driven market of 2022. This is creating a strange tension as employers can currently find the skills they need but not at the salary levels they want to pay, and quite often not at the salary levels they pay their existing team members. Either you pay over the odds and risk alienating existing staff or new staff have to accept they won’t get what they want.”
Mary Maguire, Managing Director of UK-wide recruiter, Astute Recruitment: “Businesses that need to recruit are recruiting, certainly for accountancy and finance staff. The first quarter of the year can be quieter, but this year is a repeat of last year with a big uptick in demand for specialist hires. Companies trying to lock out agencies by hiring directly have a much weaker chance of filling their roles. Increasingly we’re hearing back from clients who tried recruiting using an alternative, only to find applicants cancelling interviews due to counter-offers. One CEO admitted just this week they made an error, asking “Can you help? 4 of 6 applicants have cancelled their interviews.” Companies need to be more discerning. A good recruitment partner is literally worth their weight in gold at this moment.”
Nicky Acuna Ocana, managing director at professional services recruiter, Ambition: “Within professional services firms, there is still a degree of confidence about hiring skilled workers. They understand that high-calibre employees are valuable assets to firms and the partnership group and that retaining and attracting talent is high up the agenda for many partner conferences. Many firms are already paying inflated salaries to attract new talent or to retain talent due to there still being a shortage of high calibre candidates that specialise in professional services. We have not seen many firms offering salary increases purely to help staff through the cost of living crisis. Instead, they have offered salaries that are at market rate or higher to secure experienced and talented professionals. Indications are that unemployment will peak then be at a lower level than was expected.”
Steve McSherry, country manager at contacts centre solutions specialist, Daktela UK: “We are an international company and are struggling to find staff for most roles, which is impacting our business in the UK. We provide solutions to the contact centre market and nearly all of our customers are struggling to fill vacancies since Brexit. We have increased salaries to help retain staff as power has shifted from the employer to the employee in our sector. Many of our customers are reaching out to use our Artificial Intelligence technology to fill the gaps caused by a lack of staff.”