The number of temporary workers in the UK fell by 2.57% in the January-March 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 1.65 million from January 2023 to March 2023.

When compared to the previous three-month period, the number of temporary workers increased by 0.24%.

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 period ended March 2023, approximately 364,417 were temporary because they could not find a permanent job; 465,437 did not want a permanent job; 157,920 had a contract with a period of training, and 665,868 cited other reasons.

Of the 1.65 million temporary employees during the period, approximately 796,238 were men, while 857,406 were women.

Further labour market data from the ONS showed the unemployment rate for January to March 2023 increased by 0.1% on the quarter to 3.9%. The increase in unemployment was largely driven by people unemployed for over 12 months.

For the three months ending March 2023, the highest unemployment rate estimate in the UK was in the West Midlands (5.1%) and the lowest were in both the South West (2.5%) and Northern Ireland (2.5%).

Wales had the largest increase in the unemployment rate compared with the same period last year, increasing by 1.6%; the North West saw the largest decrease of 1.0%, contributing to the region seeing a record low unemployment rate of 3.3%.

Meanwhile, the UK employment rate was estimated at 75.9% in January to March 2023, 0.2 percentage points higher than October to December 2022. The increase in employment over the latest three-month period was driven by part-time employees and self-employed workers.

For the three months ending March 2023, the highest employment rate estimates in the UK were in both the South East and South West (78.8%) and the lowest was in Wales (71.5%).

The largest increase in the employment rate compared with the same period last year was in the North East, up by 2.7%, with Wales seeing the largest decrease of 2.6%.

The economic inactivity rate decreased by 0.4% on the quarter, to 21.0% in January to March 2023. The decrease in economic inactivity during the latest three-month period was largely driven by people aged 16 to 24 years. 

ONS data showed that the highest economic inactivity rate estimate in the UK was in Northern Ireland (26.1%) and the lowest was in the East of England (17.9%), which was a joint record low economic inactivity rate for the region.

The West Midlands saw the largest increase in the economic inactivity rate compared with the same period last year, up 1.6%, with the North East seeing the largest decrease of 2.3%.

In February to April 2023, the estimated number of vacancies fell by 55,000 on the quarter to 1,083,000. Vacancies fell on the quarter for the 10th consecutive period and reflect uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.

In February to April 2023, total vacancies were down by 214,000 from the level of a year ago, although they remained 282,000 above their pre-coronavirus (Covid-19) January to March 2020 levels.

Growth in average total pay (including bonuses) was 5.8% and growth in regular pay (excluding bonuses) was 6.7% among employees in January to March 2023. Average regular pay growth for the private sector was 7.0% and for the public sector was 5.6% in January to March 2023. A larger growth for the public sector was last seen in August to October 2003 (5.7%).

In real terms (adjusted for inflation), growth in total and regular pay fell on the year in January to March 2023, by 3.0% for total pay and by 2.0% for regular pay.

There were 556,000 working days lost because of labour disputes in March 2023, up from 332,000 in February 2023.

Neil Carberry, Chief Executive of REC, said, “These figures show some gentle progress on bringing people back to the labour market, and overall employment remains high. But we should be concerned by the high number of people who are economically inactive because they are sick, and progress on tackling inactivity overall is too slow. It is a year since the ONS reported on high worklessness, labour shortages and high inflation and too little has changed. This is holding the economy back by constraining companies’ ability to grow.”

Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), said, “The rise in the UK employment rate noted in Q1 of this year when compared to Q4 of 2022 does suggest that skills shortages are still rife across the country. The net flow out of economic inactivity paints a similar picture, with the record highs reported in the latest statistics being driven by people moving from ‘inactive’ into employment. This demonstrates an increased reliance on those out of work to fill resourcing needs that is to be expected in a skills short market.”

“The decline does show that hiring across the country is contracting which is to be expected following the many months of record highs we had last year. However, with the current economic uncertainty that we’re facing and the ONS data suggesting skills shortages remain prevalent, the strength of the country’s labour market is seemingly at risk. The hiring market tends to act as a bellwether for the broader economy, making the latest figures a concern.

Bowers said, “The high number of days lost due to labour disputes only serves to further highlight the difficulties in the country’s labour market, particularly for sectors such as education and healthcare which are already facing skills shortages. Stability is urgently needed if the UK is to continue to avoid slipping into a recession.”

Chris Gray, Director at ManpowerGroup UK, said, “With inactivity falling again and employers still looking to recruit in high numbers, there is a tug of war taking place between employers and employees, as workers who have skills that are in demand are commanding flexibility and freedom, while employers want productivity and presence. Even with 556,000 days lost to industrial action this year, demand for new recruits remains solid and with the overall vacancy levels still high - even following a tenth consecutive monthly reduction - many employers in the UK are not only looking into ways they can plug ongoing skills gaps and fill vacancies unfilled from prior months but also how they can retain their existing talent.”

ONS director of economic statistics Darren Morgan said, “Employment and unemployment both rose again in the first three months of 2023, driven in particular by men. This means the number of those neither working nor looking for work continues to fall, although the number of people not working due to long-term sickness rose again, to a new record.”

“However, the number of people on employers’ payrolls fell in April for the first time in over two years, though this is an early estimate that could be revised later,” Morgan said. “Despite continued growth in pay, people’s average earnings are still being outstripped by rising prices. “The number of days lost to strikes rose again in March, with education and health making up four-fifths of the total this month.”