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DWF employment law experts examine latest labour market data

14 March 2023

DWF's employment law experts take a look at the latest labour market data for the UK, Scotland and Northern Ireland.

Large scale industrial unrest persists despite stable labour market

UK wide data

The latest employment ONS figures for the period November 2022 to January 2023 continue to demonstrate a stable labour market.  The highlights for the period show a UK employment rate of 75.7%, 0.1% higher than the previous quarter.  The UK unemployment rate was estimated at 3.7%, largely unchanged compared with the previous quarter.  The UK economic inactivity rate was estimated at 21.3%, 0.2% lower than the previous three month period.  The World Cup reportedly helped the UK avoid a recession and will also have undoubtedly helped to maintain the resilient employment rate during this period as pubs and restaurants experienced a surge in trade.  

Commenting on the UK data, Joanne Frew, Global Head of Employment and Pensions at DWF, said: "Despite a relatively stable market there is still a large degree of industrial unrest, with junior doctors taking part in a three-day strike this week.  In addition to industrial action, attraction and retention of staff remains a cause for concern for employers as the cost of living crisis continues to bite.  Employees are demanding more pay and it is often the case that the employer simply cannot meet the demand.  Employee engagement has never been more important.  Employers are looking at new and innovative ways to attract and retain talent – from increased flexibility such as 'work from anywhere' policies to offering employee discount schemes.  

"Whilst retaining a core productive workforce is key, inevitably some employers will be considering restructuring in the near future which will impact the labour market in the short to medium term.  Further, the latest figures show that between December 2022 and February 2023, the estimated number of job vacancies fell by 51,000 over the quarter, with economic pressures resulting in a cautious approach to recruitment.  However, overall the number of vacancies remains high increasing the pressure on the Government to encourage people who have dropped out of the working population to return to the job market."

Scotland data

The latest labour market figures for Scotland remain relatively steady despite the current economic climate.   The headline figures for the period between November 2022 and January 2023 show an estimated employment rate of 76.5%, an increase of 0.5% over the quarter.  By way of comparison, Scotland's estimated employment rate was above the UK rate of 75.7%.  Scotland's unemployment rate was 3.1%, 0.2% lower than the previous quarter.  Scotland's unemployment rate was below the UK rate of 3.7%.   Yet again Scotland's labour market has remained robust.  The figures reported reflect a period of increased economic activity with the run up to Christmas.  

Commenting on the Scottish figures, Ann Frances Cooney, partner leading the Scottish employment law practice, added: "As we look ahead we can expect the labour market to be impacted to some extent by the perhaps inevitable restructuring by a number of employers.  With the cost of living crisis continuing to takes its toll the employment rate may be challenged in the short to medium term. 

"With industrial action hitting a ten year high, we may see more industrial unrest in Scotland as prices continue to soar and employers struggle to meet the demand for increased pay.  Employee engagement, with a focus on core talent is crucial."

Northern Ireland data

The latest labour market release shows improvements, with some statistically significant annual changes occurring in NI. Employee jobs increased over the year by 3.5%, with the proportion of people aged 16 to 65 in work increasing by 3.1% over the year to 71.8%. This was complemented by the economic inactivity rate decreasing by 2.5% over the year to 26.4%. Unemployment rate has returned to its pre-pandemic position and employee jobs have reached a record high (with payrolled employee numbers increasing by 0.4% over the month alone), with the NI unemployment rate remaining below the GB rate. 

There has been a quarterly, and annual, increase in employee jobs which had reached a series high in December 2022. This has been largely driven by the services industry sector, with positive reports coming from the construction and manufacturing services as well. 

Finally, there were 20 redundancies confirmed to the Department in February 2023, taking the rolling twelve-month total to 940. This is the fifth consecutive month that the rolling twelve-month confirmed redundancy total was under 1,000. There were 440 proposed redundancies notified to the Department in February 2023, bringing the rolling twelve-month proposed redundancies total to 2,180. This was an increase when compared to recent rolling twelve-month totals, and the highest total reported since April 2022, but is still well below the long-term trend.

Responding to the figures, Marie-Claire Logue, Associate in the Employment team in Belfast commented: "As with the rest of the UK, Northern Ireland still has a large degree of industrial unrest, despite a fairly stable market, with teachers and healthcare workers taking part in strike action. As the cost of living crisis continues, employers are still concerned with attraction and retention of staff. This has been corroborated with the figures, with businesses across all four main sectors increasing their employee headcount in February. Employee engagement will continue to play a pivotal role as employers look to attract and retain talent. However, with employment rising at its fastest pace in 15 months within NI (outperforming the other regions and nations in the UK), it is positive to see a rise in confidence within the NI labour market."

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