Today’s labour market statistics raise big questions over the government’s plans to end ‘low-skilled’ migration to the UK, announced by Home Secretary Priti Patel yesterday.

The UK jobs market remained stable in the three months to November, according to today’s ONS figures, with the employment rate growing by 0.6% compared with the same period last year. Total employment now stands at 76.3%, while unemployment is at 3.8%, 0.2% lower than the same period last year. There were 805,000 job vacancies for October-December 2019, 11,000 fewer than the previous three months and 49,000 fewer than the same period a year earlier.  

However, the REC’s JobsOutlook  survey shows businesses are worried about being able to recruit the skills they need. More than half (52%) of employers are worried about skills shortages for permanent staff – meanwhile employer confidence in the economy is at a low point.

Neil Carberry, CEO at the Recruitment & Employment Confederation, said:

“There are two sides to today’s labour market statistics. On one hand it’s great news that the UK labour market has remained so steady in the face of uncertainty, and the economy continues to keep record numbers of people in work. On the other however, businesses want to grow but are struggling to find the right people in such tight conditions. Employers in construction, education and social care – three sectors that are at the core of our prosperity – need workers at all skill levels.

“We need an immigration system that is controlled and works for the whole economy. The government must to be careful not to cut businesses off from the essential skills they need. It would be a big win for the government to introduce a temporary immigration route to meet the needs of the economy for some workers at lower pay and skill levels. This will help businesses succeed post-Brexit and support the jobs and growth here in the UK.”

Kay Cooper, Managing Director, EMEA RPO at Korn Ferry has offered her thoughts offered her thoughts on how businesses can continue to bring in new talent and deal with the current skills shortage.

“With employment levels continuing their upwards journey to a new record high and unemployment remaining stubbornly low, any UK business looking to bring new talent in faces a significant challenge. While the war for talent has been raging for at least 30 years, these UK conditions intensify the competition. In this environment, businesses need to think differently about how they get the right people onboard to drive success.

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“There isn’t a quick fix for this challenge, and businesses need to think strategically about talent acquisition to compete. One tactic they can pursue is to make better use of the resources they already have, driving a learning and development agenda that enables employees to smoothly reskill and retrain so that they can be quickly deployed where there is a shortage. This cross-pollination of staff not only helps businesses to address urgent requirements, but also helps them to develop people who are well-rounded and have a broad experience of the business.

“UK businesses are operating in a dynamic environment, where nothing is certain and change is everywhere. To succeed on this shifting territory, firstly they simply need to be working with a full house; persistent vacancies are a drag that undermine the business. But secondly, they need access to different skillsets and thinking – and tapping into underutilised talent pools is a good way to achieve this. Becoming more flexible in how they approach the working environment and employment structures is vital for attracting people from these pools.”

Commenting on the latest labour market figures the Scottish Secretary Alister Jack said:

"It’s good news that Scotland’s unemployment level has fallen and employment increased recently. However, we can’t be complacent as unemployment is up year on year and the number of people in work in Scotland is still lagging behind the rest of the UK.

"The UK Government is working flat out to ensure Scotland and every part of the UK prospers, including through investing more than £1.4 billion in city and growth deals. I urge the Scottish Government to use its extensive powers and work with us to improve the lives of people across Scotland."

Today’s highlight is that Scotland’s unemployment fell slightly (-7,000) and at 3.8% is down 0.3 p.p. from the three months before (June to August). This is slightly up from the year before (+4,000) and up from the record low of 3.2% at the beginning of the year 2019. Although, an unemployment rate of 3.8% indicates still a very strong and stable labour market performance by historic standards. There’s also a robust increase in employment over the last three months (+18,000). Note, that the UK overall experienced a marginal fall in unemployment too (-7,000 and its rate remained unchanged). These figures point to a strong labour market performance, however indicate a slight weakening of the labour market from one year ago.

For the three months to November, Scotland’s overall labour market is marginally strengthening: employment increased robustly (+18,000) and unemployment fell slightly (-7,000) and activity increased modestly (+12,000). In addition, monthly claimant count numbers are worsening marginally over the month of December, as there are 115,700 people in Scotland claiming Jobseeker’s Allowance and out-of-work Universal Credit (seasonally adjusted); this is up 900 on the month of November (revised) and 16,400 up on the year before.

As a result, Scotland’s unemployment rate at 3.8% is now slightly up on the rate of around 12 month ago and up on the recent record low at the start of the year 2019, when it was 3.2%. Also, Scotland’s unemployment rate is matching that of the UK as a whole, which remained unchanged over the last quarter. Furthermore, the number of people employed at 2,654,000 in Scotland is somewhat down on the recent record high at 2,702,000. This means that Scotland’s employment rate, at 74.3%, remains below the UK’s rate at 76.3%.

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