Responding to today’s ONS figures, Jonathan Boys, labour market economist for the CIPD, the professional body for HR and people development, comments:
“The battle for talent continues but it could be about to peak soon. Vacancy postings were slightly lower in April-June than Mar-May 2022 but remain at very high levels. On the candidate side, the pool of unemployed and inactive continues to fall. Competition for staff is therefore fierce. Redundancies reached a record low of 1.8 per thousand employees showing that employers are paying just as much attention to retention as they are recruitment.
“Private sector total pay (which includes bonuses) grew by 7.2% in the year to March-May 2022 compared to 1.5% in the public sector. The government will be aware of this gap today as it announces the pay award for 2.5 million public sector workers. Striking a balance between a fair pay award and addressing cost pressures will be a prominent theme for many employers this year. Real total pay fell to -0.9% over the same period and when we strip out bonuses this becomes -2.8%, meaning across the economy people’s pay packets are shrinking.
“Employers have an important role to help their staff through the cost of living crisis. Pay rises can close the gap with inflation and aid recruitment and retention efforts, but with CPI inflation currently running at 9.1% most businesses can’t keep up. CIPD research suggests that better use of existing benefits can have a similar effect to pay as it can make people materially better off. Certain fringe benefits can offset household costs like housing, travel, and childcare.”