REC response to ONS labour market figures, June 2024

The ONS has published its latest labour market statistics this morning. The Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry, said:

“Employers played it cool in the face of economic and political uncertainty this Spring. Business surveys suggest this is starting to change, but overall vacancies remained ahead of pre-pandemic levels even during the early months of the year. Businesses tell us they are confident about hiring – but they are watching inflation, interest rates and the General Election for signals on when to go. There has certainly been a marked improvement in mood in the hiring market since Easter.

“The bigger picture is that unemployment and employment numbers remain robust and pay growth is higher than we got used to over the past decade. But the pay data is noisy right now, with a large National Minimum Wage increase and employers 2024 pay settlements still feeding into the numbers.

“The number of people who are economically inactive remains a major challenge. In July, a newly elected government will need to act quickly on labour supply or risk a £39 billion cost to the economy per year because of labour and skills shortages – just short of two whole Elizabeth Lines. All parties should use their manifestos to set out a workforce plan that can help businesses shape our workforce for the future. This should involve lowering barriers on skills, support infrastructure such as childcare and transport, regulation, immigration and tax.”

Ends

Notes to editors:

In REC’s Overcoming Shortages report, we show exactly how much damage could be done if we don’t step up. With a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, we could see a 1.2% fall in expected GDP and productivity by 2027 – costing the economy anywhere between £30 billion and £39 billion every year. This figure is just short of the entire current defence budget, or two whole Elizabeth Lines.

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.