UK jobs data: CIPD says time now for skills investment

Official data shows the UK employment rate – the proportion of people aged 16-to-64 years in work – reached 75.7 per cent in June. It is the highest comparable rate since records began in 1971.

Dial with skills levels
The unemployment rate, defined by the Office for National Statistics as the number of unemployed people as a proportion of all employed and unemployed people, was 4.2 per cent. This measure is down from 4.5 per cent on the same period last year and the joint lowest since 1975.The number of unemployed people (people not in work but seeking and available to work) declined to 1.41 million – 12,000 fewer than for December 2017 to February 2018 and 84,000 fewer than for a year earlier.

Are UK wages rising or falling?

Headline findings also showed a slight year-on-year increase in real wages.Growth was 0.4 per cent excluding bonuses, and by 0.2 per cent including bonuses. Average weekly earnings, not adjusted for price inflation, increased by 2.7 per cent excluding bonuses, and by 2.5 per cent including bonuses, compared with a year earlier. 
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Will the latest jobs data impact the interest rate decision?

Anna Leach, business representative body the CBI's head of economic intelligence, said that while the labour market “continues to confound expectations of a slowdown,” pay growth has slipped to a six-month low. “This leaves the MPC’s decision on a knife-edge when it meets to set interest rates in a couple of weeks’ time.”Ian Brinkley, acting chief economist for the CIPD, the professional body for HR and people development, also pointed out that much of the jobs growth war for part-time work, which saw total hours worked in the economy falling slightly. “The labour market continues to deliver on jobs, but there are a number of underlying weaknesses,” said Mr Brinkley. “It looks as if employers have been coping with recent weak growth by offering more jobs with fewer hours. If and when GDP growth revives later this year, we might expect more full-time employment.“Wage growth – comparing regular pay over the last three months with the same three months of last year – has started to slacken,” continued Mr Brinkley. “Real wages continue to rise, but this owes more to the continued fall in inflation rather than any improvement in wages.“As things stand there appears to be little immediate upward pressure on wages despite growing labour and skill shortages.

How can employers respond to the tightening labour market?

Mr Brinkley cautioned employers against being “misled by these short-term signals” on wage growth and employment. “It is still highly likely that labour will become more constrained over the coming years, partly as a result of Brexit,” he said.“So now is the time to start making long-term plans on workforce development and enhanced investment in skills.” For related news and features, visit our dedicated section on HRRelocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online Directory