The number of temporary employees in the UK fell by approximately 29,000 in the April-June timeframe compared to the January-March timeframe, the UK’s Office for National Statistics reported Tuesday. Total employment in the country fell by 66,000 jobs to 32.9 million during the same period, and the UK’s unemployment rate edged up to 4.2% from 3.9%, according to seasonally adjusted data. The country also saw a decline in vacancies, but pay rose at its highest rate since 2021.

In terms of temporary employees in the UK, the total was more than 1.6 million in the April-June timeframe. In addition, temp employees as a percentage of all employees was calculated at 5.7% by the ONS for April-June, down from 5.8% in the January-March timeframe.

“This is a labour market shifting to new ground and one the Bank of England and government will closely monitor because of the direct impact it is having on the economy,” Kate Shoesmith, deputy chief executive at the Recruitment and Employment Confederation, said in a press release. “The unemployment rate is marginally above most predictions and we’re getting a sense of a loosening jobs market — where the demand for talent in certain sectors remains high, while there is a fallback in demand in other key sectors.”

Looking at total employment, the decline of 66,000 represented a decrease of 141,000 in full-time employment in the April-June timeframe, which was partially offset by a gain of 75,000 in part-time employment, according to the ONS.

However, the ONS estimate for the number of payrolled employees in July was up by 97,000 from the revised June figure, although the July estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

“In our ManpowerGroup UK data, we’re seeing a very similar picture with signs that the UK’s tight employment conditions are gradually starting to cool,” Michael Stull, director at ManpowerGroup UK, said in a press release. “As overall available job vacancies continue to decrease matched by a very slight increase in the demand for some new roles, it’s worth remembering this change is happening after we’ve seen record highs for job vacancies over the last 18 months.”

In May to July 2023, the estimated number of job vacancies fell by 66,000 from the previous quarter to 1.02 million. Vacancies fell for the 13^th consecutive period.

“We expect to see a fall in vacancies as the summer months approach so these statistics are perhaps unsurprising,” Tania Bowers, global public policy director at the Association for Professional Staffing Companies, said in a press release. “However, I do feel that the data needs to be analysed beyond the percentage falls that have been the focus over recent times.”

While vacancies have seen a decline for the last few months, they remain above one million, Bowers said.

“Just last year, the recruitment sector was battling the significant spike in jobs and coming to terms with the fact that figures had exceeded the one million mark for the first time on record. Now this is seemingly the norm, despite the prevailing skills shortages,” she said. “It is crucial that recruiters don’t lose sight of the fact that it is still a tight talent market and skills gaps are growing, regardless of the monthly declines. It is vital that the UK strengthens its labour market — and in order to do so, it needs easy access to international workers — particularly the self-employed and contract professionals.”

The REC also reported annual growth in regular pay (excluding bonuses) was 7.8% in April to June. The ONS noted, “this is the highest regular annual growth rate we have seen since comparable records began in 2001.” Meanwhile, annual growth in employees’ average total pay (including bonuses) was 8.2%; this total growth rate is affected by the NHS one-off bonus payments made in June 2023. However, when adjusted for inflation, annual growth for total and regular pay rose year over year by 0.1% for regular pay and 0.5% for total pay.

“The labour market remains tight enough to continue to put pressure on employers by pushing up pay, with the highest regular annual growth rate we have seen since comparable records began in 2001 — but much of this will be down to recent pay deals negotiated and is one to watch closely,” the REC’s Shoesmith said. “Pay is important, but it is not the only thing employers should consider. Today’s workers weigh pay against the whole package, such as flexible working, training, annual leave – and even whether the corporate culture aligns to their personal values.”

In another finding from the data, temporary workers in the UK were asked why they were temps. ONS reporting for the April-June timeframe found that 350,000 said they couldn’t find a permanent job, 445,000 didn’t want a permanent job, 172,000 had a contract with a period of waiting, and 656,000 cited some other reason.