UK wide data
The latest labour market figures demonstrate the economic challenges faced by employers with the number of vacancies still falling and unemployment rising. However, pay levels remain relatively strong. Facing increased pressure the UK employment rate was estimated at 74.3% in February to April 2023, below estimates of a year ago, and decreased in the latest quarter. Over the same period the UK unemployment rate was estimated at 4.4%, above estimates of a year ago, and increased in the latest quarter.
Between March and May 2024, the estimated number of vacancies in the UK decreased by 12,000 on the quarter to 904,000. This is the 23rd consecutive decrease.
Annual growth in employees' average regular earnings in Great Britain was 6% in February to April 2024, and annual growth in total earnings was 5.9%.
The cooling of the labour market is perhaps unsurprising against the backdrop of an ongoing difficult economic climate. As we enter the summer months, we can expect some buoyancy as seasonal jobs create a spike in employment. Jobs in hospitality are also likely to increase with major sporting events such as the Euros and the Olympic games.
We of course now also have a date for the General Election. With opinion polls suggesting a change in government is likely and Labour's pledge to create a raft of enhanced employment protection, including unfair dismissal as a day one right, we may see some caution from employers when recruiting.
Scotland data
The Scottish Labour Market Figures for the period February to April 2024 indicate that over the quarter the unemployment rate increased, the employment rate decreased and the inactivity rate increased. The cooling of the labour market is perhaps to be expected against a backdrop of a difficult economic climate. The headline figures show that unemployment in Scotland was 4.7%, up 0.4% over the quarter. By way of comparison, Scotland's unemployment rate was above the UK rate of 4.4%. The employment rate in Scotland was 73.1%, down 1.3% over the quarter. Scotland's employment rate was below the UK rate of 74.3%.
Early seasonally adjusted estimates for May 2024 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,411, an increase of 5.8% compared with May 2023. This is higher than the growth in median monthly pay for the UK over the same period. Employees have consistently demonstrated that they are prepared to move jobs for higher salaries. Employers are doing their best to stem the flow of lost talent by increasing pay where they can.
With the General Election less than a month away, we can expect further change in the labour market. With opinion polls predicting a change in government, employers are likely to act with a degree of caution when recruiting – particularly with unfair dismissal set to be a day one right should Labour win the election. Labour has pledged to bring in a raft of enhanced and new employment protections. With political uncertainty and change on the horizon we may well see the labour market slow whilst employers adapt to the changes.
NI data
The latest labour market figures from Northern Ireland demonstrate continued resilience against a difficult economic climate. The figures show that over the year both payrolled employee numbers and earnings have increased, while employee jobs have increased to a new series high. Further, key indicators of employment measures have improved over the year, with the unemployment and economic inactivity rates both decreasing and the employment rate increasing.
The number of employees receiving pay through HMRC PAYE in Northern Ireland in May 2024 was 801,800, which was unchanged over the month and an increase of 1.6% over the year. Earnings from HMRC PAYE indicated employees had a median monthly pay of £2,217 in May 2024, an increase of £141 over the year. The unemployment rate for the period February to April 2024 was estimated from the Labour Force Survey at 2.2%. This was a decrease of 0.1% over the quarter. The proportion of people in work was unchanged over the quarter at 71.3%.
We of course now have a date for the General Election and opinion polls are suggesting a change in government is likely. Labour has pledged to introduce a raft of new and enhanced employment law protection for employees – including unfair dismissal as a day one right. We would of course have to wait and see what reforms the Northern Ireland Assembly decide should be implemented – if any. In the meantime, employers may exercise a degree of caution when recruiting.
To learn more about the latest employment law developments, click here or get in touch with Joanne Frew, Elizabeth Colvin and Ann Frances Cooney.
