The number of temporary workers in the UK fell by 2.3% in June-August 2022 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 1.65 million from June to August 2022.

When compared to the previous three-month period, the number of temporary workers rose by 0.7%.

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 1.65 million temporary employees during the June-August period, approximately 402,828 were temporary because they could not find a permanent job; 467,998 did not want a permanent job; 183,864 had a contract with a period of training; and 597,840 cited other reasons.

Of the 1.65 million temporary employees during the period, approximately 773,484 were men while 879,047 were women.

Meanwhile, the unemployment rate for June to August 2022 decreased by 0.3% on the quarter to 3.5%, the lowest rate since December to February 1974.

For the three months ending August 2022, the highest unemployment rate estimate in the UK was in the West Midlands (4.7%) and the lowest was in the South West (2.7%); there were record lows for London (4.0%) and the North East (4.4%), while the North West (3.5%) had a joint record low.

All regions in the UK saw a decrease in the unemployment rate compared with the same period last year, with London decreasing by the most at 1.7% and the West Midlands decreasing least at 0.2%.

The UK employment rate for June to August 2022 was 75.5%, 0.3% lower than the previous quarter (March to May 2022), which had a notably higher employment rate than other periods. The number of employees decreased on the quarter, while self-employed workers increased. The employment rate is 1.0% lower than before the pandemic.

For the three months ending August 2022, the highest employment rate estimate in the UK was in the East of England (79.1%) and the lowest was in Northern Ireland (69.9%).

The largest increase in the employment rate compared with the same period last year was in Yorkshire and The Humber, up by 1.7%, with Wales seeing the largest decrease of 1.9%.

The economic inactivity rate increased by 0.6% to 21.7% in June to August 2022, compared with the previous quarter (March to May 2022), which had a notably lower economic inactivity rate than other periods. This increase in the latest quarter was largely driven by those aged 50 to 64 years and those aged 16 to 24 years.

Looking at economic inactivity by reason, the quarterly increase was driven by people inactive because they are long-term sick or because they are students. Numbers of those economically inactive because they are long-term sick increased to a record high.

For the three months ending August 2022, the highest economic inactivity rate estimate in the UK was in Northern Ireland (27.8%) and the lowest was in the East of England (18.5%).

Wales saw the largest increase in the inactivity rate compared with the same period last year, up 2.6%, with Yorkshire and The Humber seeing the largest decrease of 1.1%.

The most timely estimate of pay-rolled employees for September 2022 shows another monthly increase, up 69,000 on the revised August 2022 figures, to a record 29.7 million. The number of pay-rolled employees continued to rise in all regions; comparing September 2022 with the same period of the previous year, changes in pay-rolled employees ranged from a 3.8% increase in London to a 1.9% increase in the North West.

In July to September 2022, the estimated number of vacancies fell by 46,000 on the quarter to 1,246,000, this is the largest fall on the quarter since June to August 2020. Despite three consecutive quarterly falls, the number of vacancies remain at historically high levels.

Growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.4% among employees in June to August 2022. This is the strongest growth in regular pay seen outside of the Covid-19 pandemic period. Average regular pay growth was 6.2% for the private sector and 2.2% for the public sector. Outside of the height of the pandemic period, this is the largest growth seen for the private sector and the largest difference between the private sector and public sector.

In real terms (adjusted for inflation) over the year, total pay fell by 2.4% and regular pay fell by 2.9%. This is slightly smaller than the record fall in real regular pay we saw April to June 2022 (3.0%), but still remains among the largest falls in growth since comparable records began in 2001.

In June to August 2022, reports of redundancies in the three months prior to interview increased by 0.5 per thousand employees, compared with the previous three-month period, to 2.4 per thousand employees.

The Association of Professional Staffing Companies (APSCo), has warned that the recruitment market is still tough despite the decline in vacancies.

Tania Bowers, Global Public Policy Director at APSCo, said, “The continued decline noted in unemployment levels alongside vacancy levels which are still up on pre-pandemic numbers, shows that the labour market is still struggling through a shortage of highly skilled individuals. The uptick in the number of self-employed workers further supports the idea that there is a shortage of experts across the professional recruitment sector. While this will certainly be aided by the repeal of Off Payroll announced in the Chancellor’s Mini Budget, the full impact of this won’t be felt until Q2 2023 when the legislation itself is repealed.”

“Reliance on the contractor market alone won’t be enough to fill the skills void being felt across the UK. Just this week we saw reports of the country facing a ‘brain drain’ of scientists and engineers as Brexit continues to drive highly skilled individuals out of the country over funding concerns,” Bowers said.

“The UK’s labour market needs strengthening on a number of levels,” Bowers said. “Up-skilling the workforce is a long-term solution but it will take time and won’t help resolve the immediate challenges employers are facing. We need a dynamic, flexible workforce that recognises the nuances between self-employed contractors and agency workers on lower wages who require greater legal protection to prevent exploitation. International trade negotiations also need to focus on skills and services as much as products to allow UK firms greater and easier access to globally mobile talent.”

ONS head of labour market and household statistics David Freeman said, “The unemployment rate continues to fall and is now at its lowest for almost fifty years. However, the number of people neither working nor looking for work continues to rise, with those who say this is because they’re long-term sick reaching a record level.”

“While the number of job vacancies remains high after its long period of rapid growth, it has now dropped back a little, with a number of employers telling us they’ve reduced recruitment due to a variety of economic pressures,” Freeman said. “However, because unemployment is also down, there continues to be more vacancies than unemployed people. Despite earnings growing faster in cash terms, once inflation is taken into account pay is still falling in real terms, with clear annual decreases whether or not bonuses are included.”

Joanne Frew, employment law expert and Interim Global Head of Employment & Pensions at DWF, a provider of integrated legal and business services, said, "Although the so called "Great Resignation" remains an issue for many employers, these figures indicate that the labour market is starting to slow down after a particularly volatile period.”

"It will be interesting to see what impact the change of government may have on the labour market,” Frew added. “With all EU-derived employment law under review following publication of the Retained EU Law (Revocation and Reform) Bill and suggestions that the government may be considering introducing "no fault dismissals" for higher earners, many employees may feel more hesitant to move jobs until it is clear what impact the new bill may have on workers' rights.”