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Hiring in Britain has fallen more sharply than in other major economies over the past year as concerns about weak growth and rising wage bills prompted some businesses to cut staff numbers.
According to figures released Tuesday by job search site Indeed – a bigger cut than in any other market it covers, including the US, France, Germany, Canada and Australia.
Jack Kennedy, senior economist at Indeed, said this was because the UK faced “stronger headwinds to hiring” even before the government made its recent announcement on tax higher employment – with “higher costs of living, political instability and weak business sentiment”.
The fall in recruitment has been deeper and more prolonged in technology and other professional sectors, with job openings in the UK in software development, information design, media and communications 40% lower than 2019 levels.
But Kennedy said a slowdown in office hiring was common in all countries tracked by Indeed, with employers finding it difficult to attract candidates for roles that could be filled. working remotely is easier than filling lower-paying vacancies to work on-site.
The UK is an unusual case as it is also seeing a sharp decline in recruitment in low-wage sectors, where other countries still have high rates of vacancies – with job postings a third lower than their 2019 levels hotel and tourismand a more than 10% decrease in retail sales compared to that year.
These worries will now be compounded by a rise in employer national insurance contributions, which will hit low-wage sectors hardest, where the proportion of employees high part-time work.
Assessing the labor market situation in the UK is currently more difficult than usual due to the ongoing epidemic situation. lack of reliable official data that often forms the basis for monetary and financial decision-making.
Bank of England policymakers assess the overall jobs market relatively tight, though Recruitment slows downand there is no evidence of significant job losses yet.
Unemployment in England remains relatively low according to the Office for National Statistics’ headline measure of 4.3% and separate figures, based on tax records, show that paid employment is unchanged. because of the decrease in recent months.
Meanwhile, Indeed’s cross-country salary tracker, which measures growth in advertised salaries for new employees, shows that pay increases in the UK remain much higher than in other countries, at 6.7% as of October – a concern for the BoE and a question to ask. Employers lack demand for new employees.
One explanation may be that employers struggling to recruit as Covid-19 lockdowns are lifted are still concerned about losing staff they may not be able to replace.
“Companies don’t want to hire but don’t want to lose the people they have,” said Andrew Goodwin, UK chief economist at consulting firm Oxford Economics. “People who are working will probably stay in it. People who are unemployed will find it very difficult to enter the labor market.”
Michael Stull, chief executive of recruitment firm ManpowerGroup UK, said the prolonged “recruitment recession”, coupled with low unemployment and strong wage growth, was unprecedented.
Businesses now see reduced hiring as the “quickest path” to limit the damage from next year’s employment tax hike, he said, and are also starting to see the potential of artificial intelligence in reducing demand. staff demand.
But the long-term decline in office hiring is also partly due to workers becoming more worried about the economic outlook and less willing to take the risk of changing jobs.
“Workers are holding on tight. . .[In previous downturns]the last people in are the first people out,” Stull said. “No one wants to be the last person hired.”
Data visualization by Amy Borrett.
