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BUSINESS NEWS - UK – Temporary employees up 8.1%, but regular pay dips 1% due to rising inflation

Posted 18th March 2022 • Written by •

The number of temporary employees in the UK improved by 8.12% on a seasonally adjusted basis to a total of approximately 1.68 million for the three-month period from November 2021 through January 2022 when compared to the same period a year ago, according to the Office for National Statistics.

When compared to the previous three-month period ended December 2021, the number of temporary employees fell by 1.53%.

Temporary workers are self-identified when surveyed by the ONS, and they include those who are on fixed-period contracts, temporary agency workers, casual workers, seasonal workers and others in temporary work.

The number of temporary employees as a percentage of total employment was 5.99%, up from 5.64% when compared to a year ago.

Of the 1.68 million temporary employees during the period ended January 2022, approximately 425,773 were temporary because they could not find a permanent job; 456,776 did not want a permanent job; 159,237 had a contract with a period of training; and 645,846 cited other reasons.

Of the 1.71 million temporary employees during the period, approximately 724,437 were men while 963,196 were women.

The ONS also published data on the UK employment rate which was estimated at 75.6%, 0.1% higher than the previous three-month period, but 1.0% lower than before the Covid-19 pandemic (December 2019 to February 2020).

For the three months ending January 2022, the highest employment rate estimate in the UK was in the East of England (78.9%); the lowest employment rate was in Northern Ireland (70.4%).

The UK unemployment rate was estimated at 3.9%, 0.2% lower than the previous three-month period, and returning to pre-Covid-19 pandemic levels.

For the three months ending January 2022, the highest unemployment rate estimate in the UK was in the North East (5.5%) and the lowest was in Northern Ireland (2.7%); the East Midlands saw a record low unemployment rate of 3.1%.

The UK economic inactivity rate was estimated at 21.3%, 0.1% higher than the previous quarter, and 1.1% higher than before the pandemic.

For the three months ending January 2022, the highest economic inactivity rate estimate in the UK was in Northern Ireland (27.5%) and the lowest was in the East of England (18.6%).

Job vacancies rose to a new record of 1,318,000 in the period from December 2021 to February 2022; an increase of 105,000 (8.7% increase) from the previous quarter with half of the industry sectors showing record highs.

The rate of quarterly growth varies across industries with the fastest rates of growth seen in education at 21.2% and construction at 17.3%, while electricity, gas, steam and air conditioning supply reported a decrease of 13.8%.

The ONS also noted that the total number of jobs in the UK in December 2021 was an estimated 35.2 million, and while that remains 482,000 below December 2019, the number of jobs has risen every quarter in 2021, helping to reduce the jobs deficit from pre-Covid-19 pandemic levels.

Growth in average total pay (including bonuses) was 4.8% and growth in regular pay (excluding bonuses) was 3.8% among employees in November 2021 to January 2022. In real terms (adjusted for inflation), growth in total pay was 0.1% and regular pay fell on the year at negative 1.0%; strong bonus payments over the past 6 months have kept recent real total pay growth positive.

The most timely estimate of payrolled employees shows another monthly increase (up 275,000) in February 2022 to a record 29.7 million.

The redundancy rate decreased to a record low following the end of the Coronavirus Job Retention Scheme. The redundancy rate is the ratio of the redundancy level to the number of employees in the previous quarter, multiplied by 1,000.

ONS chief economist Grant Fitzner said, “The labour market continues to recover from the effects of the pandemic, with the number of unemployed people falling below its pre-pandemic level for the first time and another strong rise in employees on payroll in February. However, the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level.”

“We have seen yet another record number of job vacancies, and with the redundancy rate falling to a new record low, demand for workers remains strong,” Fitzner said. “Because bonuses have continued at high levels for some workers, total earnings growth just kept ahead of rising prices over the past year, though regular pay has dropped again in real terms.”

Chief Executive of the Recruitment & Employment Confederation Neil Carberry said, “Businesses across the country are doing what they can on pay, both for existing staff and to help them hire in a jobs market experiencing a severe labour shortage. But rising inflation both makes that effort hard, and reduces the gains workers feel from pay rises. In real terms, average pay has fallen compared to last year.”

“A key way to reduce the pressure on our economy and keep inflation down will be to focus on ensuring employment rates and hours worked recover to pre-pandemic levels,” Carberry added. “Inactivity is still rising, so firms and government need to work together to address this. Recruiters have a key role to play here, from helping government with activation schemes to supporting employers with new forms of job offer to tempt people back into work.”

Recruitment firm Aspire founder and chairman, Paul Farrer, said, “The job vacancy boom continues in line with the ending of Covid restrictions. But while more job opportunities than ever is great news for candidates, looked at through the eyes of an employer, it signals a crisis. Yet another record number of job vacancies shows that employers are still struggling to recruit the talent they desperately need, even if the rate of growth is slowing. It means businesses need to think creatively, hire quickly and in many sectors, offer higher salaries or broaden their requirements to attract the skills they rely on. There is a dark cloud looming over the continued recovery, which is the rapid rise in the cost of living. This will put pressure on wage increases, for employers both looking to retain and attract talent. The unknown economic consequences of the Russian invasion of Ukraine are also likely to play a role.”

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