Responding to today’s ONS labour market figures, Jonathan Boys, senior labour market economist for the CIPD, the professional body for HR and people development, comments:
“This Valentine’s Day employers are struggling to make a match with the right candidates due to the continued imbalance between supply and demand. Vacancies, though falling, remain above one million showing demand is still strong, but the right candidates are in short supply. At just 3.7% unemployment remains low so fewer people are available and looking for work. This imbalance is tilting power towards the employees, driving up pay and emboldening industrial action which rocketed to 843,000 days lost to labour disputes in December.
“Pay continues to grow at a slower pace than prices, deepening the cost-of-living crisis. Regular pay growth of 6.7% would normally be a welcome sight for workers but in the face of inflation running at 10.5% this increase won’t stop living standards from falling for most working people.
“When candidates are in short supply and even bumper pay rises can’t compete with inflation, employers need to consider the whole package they offer to staff. The big increases in inactivity which we saw over the pandemic, and which continue restrict labour supply, were driven by people for whom the current world of work does not work. With one in five people being economically inactive, employers need to think about these groups and design better quality jobs. This includes flexibility in all its guises, not just home working. Flexibility is particularly valued by the over 50s, helping people get into and stay on at work.”
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