The number of temporary workers in the UK decreased by 0.79% in the March-May 2023 period when compared to the same three-month period last year, according to seasonally adjusted data by the Office of National Statistics (ONS).

The number of temporary workers totalled approximately 1.64 million from March 2023 to May 2023.

When compared to the previous three-month period, the number of temporary workers decreased by 0.70%.

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 1.64 million temporary employees during the period ended May 2023, approximately 370,421 were temporary because they could not find a permanent job; 440,581 did not want a permanent job; 171,455 had a contract with a period of training, and 657,685 cited other reasons.

Of the 1.64 million temporary employees during the period, approximately 726,144 were men, while 913,999 were women.

Meanwhile, further labour market data showed that the UK unemployment rate was estimated at 4.0%, 0.2% higher than the previous quarter, and has risen to pre-pandemic levels.

For the three months ending May 2023, the highest unemployment rate estimates in the UK were in both the West Midlands and Wales (5.0%) and the lowest was in Northern Ireland (2.5%).

Wales had the largest increase in the unemployment rate compared with the same period last year, increasing by 1.2%, with the North East seeing the largest decrease of 1.6%.

The UK employment rate was estimated at 76.0%, 0.2% higher than the previous quarter and 0.6% lower than before the Covid-19 pandemic (December 2019 to February 2020).

For the three months ending May 2023, the highest employment rate estimate in the UK was in the Southeast (79.5%) and the lowest was in Wales (71.9%).

The Northeast saw the largest increase in the employment rate compared with the same period last year, increasing by 3.0%, with Wales seeing the largest decrease of 1.8%.

The UK economic inactivity rate was estimated at 20.8%, 0.4% lower than the previous quarter and 0.6% higher than before the pandemic.

For the three months ending May 2023, the highest economic inactivity rate estimate in the UK was in Northern Ireland (26.1%) and the lowest was in the Southeast (17.4%); the West Midlands saw a joint record-low economic inactivity rate for the region, at 20.3%.

Wales saw the largest increase in the economic inactivity rate compared with the same period last year, up 0.8%, with the Northeast seeing the largest decrease of 2.0%.

ONS data also showed that comparing June 2023 with the same period last year, changes in payrolled employees ranged from the highest being a 1.7% increase in London to the lowest being a 1.0% increase in Scotland.

The number of job vacancies in April to June 2023 was 1,034,000, a decrease of 85,000 from January to March 2023. Vacancy numbers fell on the quarter for the 12th consecutive period in April to June 2023, down by 7.6% since January to March 2023, with vacancies falling in every quarter of the last year.

In April to June 2023, total vacancies were down by 265,000 from the level of a year ago, although they remained 232,000 above their pre-coronavirus (Covid-19) January to March 2020 levels.

Growth in employees' average total pay (including bonuses) was 6.9% and growth in regular pay (excluding bonuses) was 7.3% in March to May 2023; for regular pay this equals the highest growth rate, which was also seen last month and then during the Covid-19 pandemic period for April to June 2021.

Growth in total and regular pay fell in real terms (adjusted for inflation) on the year in March to May 2023, by 1.2% for total pay and 0.8% for regular pay.

Meanwhile, there were 128,000 working days lost because of labour disputes in May 2023, the lowest number of days lost since July 2022.

The estimated number of workforce jobs for March 2023 was a record high of 36.8 million, an increase of 395,000 jobs since December 2022 and an increase of 1.2 million since December 2019.

In March to May 2023, the number of people reporting redundancy in the three months prior to the ONS interview increased by 0.2 per thousand employees compared with the previous quarter, to 3.3 per thousand employees.

In the latest quarter, total actual weekly hours worked increased by 4.5 million to 1.05 billion hours. This is 2.7 million hours above pre-Covid-19 pandemic levels (December 2019 to February 2020).

ONS director of economic statistics Darren Morgan said, “Total employment grew in the latest three months while the number of people actively looking for work also increased, both driven by men rejoining the labour market.”

“While the total number of vacancies remain high, it has now been falling for a year and the pace of decline has accelerated recently,” Morgan said. “Pay excluding bonuses has again risen at record levels in cash terms. Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021.”

Morgan also noted, “The number of working days lost to strikes fell back to their lowest level in nearly a year, with a notable drop in public sector disruption.”

Neil Carberry, Chief Executive of REC, said, “The labour market has softened since last summer, but overall demand remains high. This shows underlying need to hire among businesses despite their concerns about inflation, interest rates and weak economic growth. The ongoing demand for temps shows this in action. Our temporary jobs market enables companies to grow even in this period of economic uncertainty and offers job seekers the chance to get a foot in the door, earn a bit more, learn new skills and control of their work/life balance.”

“The rise in employment and unemployment shows economic inactivity is going down, which is vital to boosting incomes and overcoming labour shortages that constrain the economy’s growth,” Carberry continued. “The fall in inactivity appears driven by non-working household members seeking to boost household income in the face of inflation – the challenge of high numbers of people off work sick remains, even if numbers have now stabilised.”

“Pay pressure remains significant as firms move to retain and attract staff by mitigating the effect of inflation as far as they can afford to,” Carberry added. “While wages are growing lower than inflation, they are actually rising at their fastest rate in many years. But sustainable wage rises require economic and productivity growth, and affordable access to capital for businesses. These should be priorities.”

Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), said, “It is encouraging to see economic inactivity rates falling, however, with retirement one of the key drivers of this, the UK could be facing a ‘retirement cliff’ at a time when skills shortages remain an issue.”

“Sectors including technology, healthcare and education are still struggling to find the talent needed to meet demand,” Bowers said. “And while the number of working days lost due to labour disputes fell in May, the fact that this remains above 100,000 lost days in sectors where skills shortages are still rife is a concern. While we don’t expect there to be an overnight solution to the s to the skills crisis, we believe there isn’t enough focus on sustainable skills growth in the UK. Reforms are urgently needed to encourage international contractors and the self-employed to seek work in the UK.”

Michael Stull, Director at ManpowerGroup UK, said, “The gradual decline of vacancies overall and slight rise in the unemployment rate to 4.0%, contrasts with a very strong hiring intent that we’re seeing from employers in nearly every sector and across all parts of the UK. It brings home the reality of the talent shortages reported by 80% of UK employers, with skills development now a critical longer-term priority that will help put the economy back on track.”

The BBC reports that the pace of wage rises has come under increasing focus by the Bank of England as it tries to control inflation. The Bank has raised interest rates 13 times in a row in an attempt to slow the pace of price rises.

Inflation, the rate at which prices rise, has remained stubbornly high in the UK, and currently stands at 8.7%, well above the Bank of England's target of 2%. The concern is that strong wage increases will increase costs faced by companies and force them to push up prices for their goods even higher.

The governor of the Bank of England, Andrew Bailey, said yesterday, "Both price and wage increases at current levels are not consistent with the inflation target."