The number of temporary employees in the UK fell by 1.42% in the May-July 2023 timeframe compared to the same period a year ago, the UK’s Office for National Statistics reported today.

ONS data showed that the number of temporary employees totalled 1.61 million in the May-July period. When compared to the three-month period ended June 2023, the number of temporary employees fell by 0.41%.

Temporary workers self-identify when surveyed by the ONS, and they comprise those who are on fixed-period contracts, temporary agency workers, casual workers, seasonal workers and others in temporary work.

Of the 1.61 million temporary employees in the period ended July 2023, approximately 351,599 could not find a permanent job, approximately 452,962 did not want a permanent job, while about 166,822 had a contract with a period of training; and approximately 646,041 cited some other reason.

Of the 1.61 million temporary employees during the period, approximately 725,318 were men, while 892,107 were women.

Temporary employees as a percentage of all employees was calculated at 5.67% by the ONS for May to July 2023, down from 5.70% in the April-May timeframe and from 5.79% in the same period a year ago.

The unemployment rate for May to July 2023 increased by 0.5% on the quarter to 4.3%. The increase in unemployment was largely driven by people unemployed for up to 12 months.

For the three months ending July 2023, the highest unemployment rate estimate in the UK was for the Northwest (5.3%) and the lowest was for Northern Ireland (2.7%).

The Northwest had the largest increase in the unemployment rate compared with the same period last year, increasing by 1.8%, with Yorkshire and The Humber seeing the largest decrease of 1.5%.

At the same time, the UK employment rate was estimated at 75.5% in May to July 2023, 0.5% lower than February to April 2023. The quarterly decrease in employment was mainly driven by full-time self-employed workers.

For the three months ending July 2023, the highest employment rate estimate in the UK was for the Southeast (79.6%) and the lowest was for Northern Ireland (71.1%).

The Northeast saw the largest increase in the employment rate compared with the same period last year, increasing by 2.7%, with the East of England seeing the largest decrease of 1.4%.

The UK’s economic inactivity rate increased by 0.1% on the quarter, to 21.1% in May to July 2023. The increase in economic inactivity during the latest quarter was driven by people aged 16 to 24 years. Those inactive because of long-term sickness increased to another record high. Meanwhile, those inactive because they were looking after family or home decreased to a record low.

For the three months ending July 2023, the highest economic inactivity rate estimate in the UK was for Northern Ireland (26.9%) and the lowest was for the Southeast (17.1%).

London saw the largest increase in the economic inactivity rate compared with the same period last year, up 1.0%, with the Northeast seeing the largest decrease of 3.4%.

The estimate of payrolled employees for August 2023 is largely unchanged on the month, down 1,000 on the revised July 2023 figure, to 30.1 million.

Comparing August 2023 with the same period last year, changes in payrolled employees ranged from a 1.7% increase in London to a 1.1% increase in Yorkshire and The Humber. Between March and June 2023, workforce jobs decreased in 9 out of 12 regions of the UK, with London seeing the largest decrease of 72,000, while the South East increased by 71,000.

In terms of pay, annual growth in regular pay (excluding bonuses) was 7.8% in May to July 2023, the same as the previous three-month period and is the highest regular annual growth rate since comparable records began in 2001.

Annual growth in employees’ average total pay (including bonuses) was 8.5%. The ONS noted this total annual growth rate is affected by the NHS and Civil Service one-off payments made in June and July 2023.

In real terms (adjusted for inflation using Consumer Prices Index including owner occupier's housing costs), annual growth for total pay rose on the year by 1.2% and for regular pay rose on the year by 0.6%.

In June to August 2023, the estimated number of vacancies fell by 64,000 on the quarter to 989,000. Vacancy numbers fell on the quarter for the 14th consecutive period in June to August 2023, down by 6.0% from March to May 2023 with vacancies falling in 13 of the 18 industry sectors.

In June to August 2023, total vacancies were down by 268,000 from the level of a year ago, although they remained 188,000 above their pre-Covid January to March 2020 levels.

In the latest quarter, total actual weekly hours worked decreased by 18.5 million hours to 1.04 billion hours in May to July 2023. This is 12.2 million hours below pre-Covid-19 pandemic levels.

Meanwhile, there were 281,000 working days lost because of labour disputes in July 2023. The majority of the strikes were in the Education and Health and social work sectors.

ONS director of economic statistics Darren Morgan said, “Unemployment continues to increase in the latest three months. Correspondingly, employment is down, driven by falls among men and the self-employed. The proportion of people neither working or looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record.”

“Meanwhile, working days lost to strikes jumped in July, especially in education, with the health sector also still heavily affected. However, the overall number is still below what it was a few months ago,” Morgan said.

“Job vacancies have fallen below the million mark for the first time since the summer of 2021, when the reopening of economy created huge demand for workers. However, they still remain significantly above pre-Covid levels,” Morgan added.

Neil Carberry, Recruitment and Employment Confederation chief executive, said, “Pay rising to meet falling inflation is a function of firms giving higher pay awards to staff in the spring, ongoing staff shortages in some sectors such as hospitality and logistics, and a big rise in the minimum wage. It was always likely that pay would meet falling inflation during this year, but we should be cautious of any analysis that suggests pay is driving rising prices at this stage – businesses have been carefully managing looking after workers and maintaining cost stability.”

“Today’s numbers do suggest that the path to lower inflation may be more of a slope than a cliff, but there is evidence of the gentle cooling in the jobs market the Bank of England has been seeking,” Carberry continued. “With employment and hours dropping a little alongside inflation, wage pressure in the private sector is not likely to be as high from here on in as the labour market loosens. While we are coming off the hiring peaks of 2022, however, we are still seeing shortages in some key sectors such as hotels, restaurants, logistics, manufacturing, engineering, and healthcare. This is a longer-term issue and left unaddressed will drive inflation up.”

“Companies can address shortages in how they choose to hire, working with recruitment professionals to reach new pools of candidates or engage staff in new ways. It is telling that temporary labour remains in demand through this period of economic uncertainty, for instance,” Carberry said.

Tania Bowers, global public policy director at the Association of Professional Staffing Companies (APSCo), said, “The continued decline in vacancies is a trend that is perhaps to be expected, however, the fact that these levels have fallen below the one million mark for the first time since July 2021 is more significant. This shows that the jobs market is continuing to stabilise, rather than decline on a worrying level.”

Bowers added, “In fact, the latest quarterly comparisons of growth from January to March 2020 show that the demand for staff is still up in skill-short sectors including education, human health & social work and professional scientific & technical services.”