Overseas workers 'key to UK jobs boom'

The UK jobless rate is the lowest it has been since 1974. While there are more EU nationals working in the UK now, there has been a marked increase in the number of workers from outside the EEA.

Graphic of a UK flag with illustrated people in front of it
The UK's employment rate has reached a new high with almost half the new jobs created in the past year going to workers from outside Britain, according to the latest official data.
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As the jobless rate fell to 3.8 per cent in the first quarter of the year - its lowest since the end of 1974 - the employment rate hit 76.1 per cent.Figures from the Office for National Statistics (ONS) also showed that, over the past year, the 190,000 jobs going to UK nationals over the past year was almost matched by an increase of 178,000 in the number of non-UK nationals working in the country - 98,000 from the EU27 and 80,000 from outside the bloc.

A dramatic increase in the numbers of non-EU workers in the UK

It means that the number of EU nationals working in the UK has now reached 2.38 million - 237,00 more than at the time of the Brexit referendum in 2016 - while the total from outside the European Economic Area has seen a marked rise to 1.32 million.Gerwyn Davies, senior labour market analyst at HR body CIPD, said workers from outside the EU were increasingly filling important vacancies.“It is easy to see why employers have turned to non-EU workers in relatively large numbers against the backdrop of a tightening labour market," he said."What’s more, contrary to some recent reports, virtually all of the employment growth during the past year has come from skilled, permanent, full-time jobs. This has allowed employers to largely overcome the restrictions they encounter when recruiting non-EU workers that do not currently apply to EU workers."Non-EU workers are therefore playing a key, complementary role in the UK workforce; especially in sectors such as healthcare. Looking ahead, the data may herald a structural shift towards hiring more non-EU workers when restrictions are loosened for non-EU workers and tightened for EU workers from 2021.“The relatively sharp growth in the number of non-UK born workers in employment has also acted as a brake on salaries rising more quickly; especially in shortage occupations. This will come as a relief to employers who have been subjected to increasing pressure from workers to raise pay without accompanying productivity growth."

ONS: average earnings have increased

The ONS said that average earnings increased by 3.2 per cent in the year to February, compared to 3.5 per cent in the 12 months to the previous month.Employment Minister Alok Sharma commented: "Maintaining our record employment rate with unemployment falling again to just 3.8 per cent, once again shows the success of our balanced approach to managing the economy."Rising wages and booming higher-skilled employment means better prospects for thousands of families, and with youth unemployment halving since 2010, we are creating opportunities for all generations."We now need to shift some of our focus to up-skilling people and supporting them into roles with real career progression to create a modern workforce fit for the challenges of the 21st century."

UK jobs market "in fine fettle"

Tej Parikh, senior economist at the Institute of Directors, said the figures showed that the UK labour market remained "in fine fettle".He added: “Businesses have steadfastly expanded their workforce whilst the fog of uncertainty clouds longer-term investment decisions. After a long period of relentless hiring, however, the momentum behind employment growth appears to be slowing as there are fewer workers available to fill skyrocketing vacancies. Firms are having difficulties recruiting right across the board, from engineering technicians to hospitality staff.“The competition to attract talent has pushed up wages to the benefit of households over recent months, but we would expect salaries to be growing faster given the prevailing low rates of unemployment. Businesses are facing a slew of higher costs and weak productivity growth, which limits their wiggle room to up pay packets.“The jobs boom has no doubt kept the economy ticking along but for many businesses progress on skills, training and education policy could not come sooner.”Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’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 DirectoryClick to get to the Relocate Global Online Directory