The Office for National Statistics (ONS) has released new data showing a 7.8% year-on-year increase in wages, excluding bonuses. However, the unemployment rate also increased, rising from 4.2% to 4.3% in the quarter ending in July 2023.
The employment rate dropped slightly to 75.5%, mainly due to declines in full-time self-employment. Despite this, wages have outpaced the consumer price index (CPI) inflation rate, which fell to 6.8% last month.
The number of payrolled employees for August 2023 was largely unchanged from the previous month, standing at 30.1 million, down just 1,000 from the revised July 2023 figure.
The economic inactivity rate edged up by 0.1% to 21.1% in May to July 2023. The number of job vacancies continued its downward trend for the 14th consecutive quarter, falling by 64,000 to 989,000.
Kerri-Ann Hargreaves, director of HR and recruitment at Newcastle-under-Lyme-based Net-Worth Ntwrk, said that firms were still hiring despite the drop in vacancies.
“Within the financial services and engineering sectors, businesses are continuing to hire, despite the strong economic headwinds caused by high inflation and high interest rates,” she said.
“One definitive trend is an increase in people above retirement age returning to the workforce. This appears to be a direct response to the cost-of-living crisis.
“We are seeing larger businesses offering a cost of living increase as part of annual pay reviews, generally between 7%-10%, but small businesses are struggling with this demand and losing talent.
“Many job seekers continue to say their reason for moving is the cost of living crisis and are focusing on salary increases, bonuses and additional benefits such as healthcare.”
Adam Myers, head of HR consulting at Southampton-based HR specialists Stellamar, agreed: “In our experience, the UK employment market is still very busy at the moment, surprisingly so given the pressures many sectors are under.
“Companies continue to hire despite the economic uncertainty. Candidates are pushing for higher salaries and are being choosy about what they apply for. It’s been a while now since we have seen much in the way of redundancies or recruitment holds, which is a positive.
“Money is the key to everything hiring-related right now, especially when dealing with a younger generation just entering the workplace, many of whom fear never being able to even own a property. It’s crucial that organisations are not only competitive around salary, but spell out what the ‘earnings journey’ will look like for the employee.
“The biggest problem at the moment in the hiring market is organisations being able to fill what are perceived as ‘lower level’ roles. This is specifically the case in sectors such as retail, hospitality and transport.”
