Latest labour market trends: what they mean for your business

The latest labour market report from the Office for National Statistics highlights several important trends that might affect your business.

Firstly, it appears the job market is starting to cool down. There are fewer job openings now, indicating that businesses aren’t hiring as much as before. Additionally, the unemployment rate has risen to 4.4%, which is higher than it was last year.

The employment data presents a mixed picture. Recent surveys and tax data show a slight drop in the number of jobs. However, the overall trend since December 2023 remains positive, with an increase of 431,000 jobs. So, while there have been some recent declines, the long-term trend still shows growth.

Interestingly, the rate of people who are inactive in the job market has risen to 22.3%. This indicates that more people are staying out of the workforce for various reasons.

On a brighter note for employees, though not necessarily for businesses, wages are on the rise. Regular earnings have grown by 6.0%. After adjusting for inflation, people are still earning more, which is good news for employees and may boost morale in the workplace.

However, there has also been an increase in the number of people claiming unemployment benefits, both since last month and since last year. This figure has now reached 1.629 million.

So, what does all this mean for your business?

• Reconsider hiring plans: With fewer job openings and more people out of work, focusing on retaining and training your current employees could be a smart move.
• Plan for higher wages: As pay rates are increasing, it’s important to budget for higher salaries.
• Offer flexible work options or training programs: These could help attract people who aren’t currently working.

Looking ahead, although there are some short-term changes, the long-term trend shows that job growth is slowing down. It’s essential to focus on sustainable business practices and long-term planning to navigate these changes in the job market.

For more detailed insights, see: ONS Labour Market Report June 2024

Get in touch with our Wimbledon accountants for personalized advice on how these trends might affect your business and strategies to adapt.