Responding to today’s ONS figures, Jonathan Boys, labour market economist for the CIPD, the professional body for HR and people development, comments:
“If judging the labour market on the record low unemployment figures then the picture is rosy. However, despite unemployment continuing to fall, there are still fewer workers than pre-pandemic. At the same time demand for staff remains strong as employers continue to post a record 1.3 million vacancies. The inability to recruit and retain staff is holding some businesses back, so it’s important that businesses look at how they can take on people that have been economically inactive, as well as other key groups.
“We’re seeing some of the highest nominal pay rises in recent history, but the same can be said for inflation which is eroding these gains. Whether pay is beating inflation – resulting in a real pay rise - depends on who you are, and often whether you are paid a bonus or not. Total pay in the private sector rose by 8% compared to just 1.5% in the public sector. When including bonuses real pay rose by 0.4% but without bonuses it fell by 2.2%.
“The inactivity rate decreased but remains high after having grown during the pandemic. With unemployment so low, employers and policymakers will be thinking about how to expand labour supply, and this means tempting some of the inactive group back into work. The reasons for inactivity are mixed. Young people inactive because they are studying more is probably a good thing but the big increase in over 50s leaving the labour market, particularly due to long term sickness, is not. There is also some suggestion that the increase in long term sick could be the effects of long covid.
“CIPD research on older workers shows clear preferences for flexible working, including home working arrangements. Such policies can be an important part of the reasonable adjustments needed to manage health conditions which older workers are more likely to have. It’s vital that employers look at flexible options for older workers, so people can work in a way that is comfortable for as long as they wish to work.”