Employer recruitment practices explain puzzling labour market statistics

Official job statistics published earlier today by the Office for National Statistics are puzzling. These show that while full-time employment has risen substantially, more people are being made redundant, fewer job vacancies are being reported and claimant unemployment has risen. John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD), believes that a solution to the puzzle lies in the small print of the claimant count statistics.

Philpott comments, ìUnemployment has risen in the past year not because more people have been joining the count ñ in fact slightly fewer have done so ñ but instead because fewer people are leaving. The reason for this is evident in the CIPDís own quarterly survey evidence. It shows that when it comes to recruitment, jobless benefit claimants, many of whom are not immediately job ready, are losing out to other jobseekers, in particular growing numbers of immigrant workers. And this relative disadvantage bites even harder whenever the level of vacancies falls.î

With claimant unemployment still relatively low, and those remaining on the count comprising a harder core of disadvantaged people, the Institute believes that getting claimants off welfare and into work will become an increasingly difficult policy task.