While the cost of living crisis is pushing more people back to the workforce, the consistent rate hikes from the Bank of England are causing companies to rethink their hiring practices, reducing the number of vacancies available to job seekers.
This does not constitute advice and advice should be sought in all instances before acting on it.
According to the latest figures from the Office for National Statistics (ONS), there was a fall of 55,000 vacancies in the three months leading up to April and a drop of 156,000 inactive workers in the same period. Independent HMRC figures support this trend with a fall of 136,000 PAYE employees during the months of March and April, the first drop since February 2021. Combined, these data points paint a picture of a changed workforce. Not enough workers for the jobs being advertised is no longer the reality and as a result, the job market has cooled a bit.
While not exactly a happy development for job seekers, anyone interested in interest rates falling will welcome this news. And despite the reduction in vacancies being due to companies going out of business or being unable to expand their staff, businesses are happy about this news as well, even though they are still lamenting the fact that they do need new talent and those on the market aren’t quite the right match.
This is a problem that won’t be solved easily, unfortunately. The solution to the problem is more funding and resources directed into skills training, but that doesn’t appear to be high on the government’s agenda at the moment.
This doesn’t change the fact that wages are not rising in line with inflation which is causing many to take on additional jobs to supplement their income. Interestingly, one of the largest increases in people being off work with a long-term illness is those citing mental health issues which signals to employers that they need to do better when it comes to caring for the employees they do have.
In Britain, the activity rate in the market is lower than continental Europe, with more than 400,000 fewer workers than in 2019. With no sign of any significant improvement any time soon, the UK public might need to brace itself for higher interest rates for the foreseeable future.
Does the cooling job market impact you? Get in touch with your trusted Dental & Medical Financial Services adviser to discuss your options today.