Warning that firms will have to work ‘even harder’ to attract talent as unemployment falls.
Official figures show the labour market continues to tighten meaning that employers may have to work harder and smarter to make jobs accessible to those ‘locked out’ of work.
The latest labour market overview from the Office for National Statistics has shown that unemployment fell to 4.1 per cent between October and December 2021, down 0.2 percentage points on the previous quarter, while the employment rate rose 0.1 percentage points to 75.5 per cent.
At the same time, vacancies rose to another new record of 1,298,400 in the period November 2021 to January 2022, albeit the rate of growth continued to slow. The number of vacancies were up 513,700 from pre-coronavirus levels in January to March 2020.
The latest ONS figures also showed that pay was continuing to increase, which mirrored the findings of the CIPD’s most recent Labour Market Outlook.
The ONS figures found that growth in average total pay including bonuses was 4.3 per cent in October to December 2021. Excluding bonuses, growth in average total pay was 3.7 per cent.
However, pay increases failed to keep up with the rising cost of living. When adjusted for inflation, pay fell by 0.1 percent including bonuses, and fell 0.8 per cent excluding bonuses.
In the Labour Market Outlook from the CIPD , they found that employers are anticipating a median pay increase of 3 per cent in 2022, the highest figure since the professional body started collecting comparable data in 2012/13.
Of the 1,000 employers polled, 84 per cent said they were planning a pay review between January and December 2022, of which two fifths (40 per cent) said they expect to increase basic pay.