The number of temporary employees in the UK fell year-on-year by 14.7% during the November 2023 to January 2024 period, according to seasonally adjusted data from the Office for National Statistics.

For the November to January period, the number of temporary employees stood at 1,444,990. This was 3.0% lower than the prior three-month period from October to December 2023.

Further data showed that the number of men who were temporary employees stood at approximately 706,013 during the November to January period while the number of women who were temporary employees stood at approximately 738,976.

Of the 1.44 million temporary employees during the period ended January 2024, approximately 325,059 were temporary because they could not find a permanent job; 435,019 did not want a permanent job; 151,923 had a contract with a period of training, and 532,988 cited other reasons.

Meanwhile, the UK unemployment rate (for those aged 16 years and over) was estimated at 3.9% in November 2023 to January 2024. The unemployment rate is above estimates of a year ago (November 2022 to January 2023) but largely unchanged on the latest quarter.

As for regional data, the ONS said that it detected an issue in the weighting of the Labour Force Survey (LFS) for Northern Ireland for the November 2023 to January 2024 quarter only. While only Northern Ireland data are affected, consequently, it is not publishing regional LFS figures as part of the March 2024 release in any of its releases including LFS regional data in public sector employment (PSE) and workforce jobs (WFJ).

The ONS estimates the impact of this issue on UK LFS figures will be small, around 0.1% on headline rates, and so publication of UK data is not affected, it added.

Further data showed that the UK employment rate (for those aged 16 to 64 years) was estimated at 75.0% in November 2023 to January 2024, below estimates of a year ago and down in the latest quarter.

At the same time, ONS data showed that the UK economic inactivity rate for those aged 16 to 64 years was 21.8%, above estimates of a year ago (November 2022 to January 2023) and increased in the latest quarter.

The increase seen in economic inactivity in the latest quarter and on the year was mainly driven by those inactive because they were students and those inactive because they were retired. The quarterly increase was partially offset by falls in those looking after the family or home and those inactive for other reasons. The number of those inactive because they were long-term sick fell on the quarter, but remains higher than estimates a year ago (November 2022 to January 2023).

Payrolled employees in the UK rose by 15,000 (0.0%) between December 2023 and January 2024, and rose by 386,000 (1.3%) between January 2023 and January 2024. While the number of pay-rolled employees continues to increase, the rate of annual growth is decreasing.

The early estimate of payrolled employees for February 2024 increased by 20,000 (0.1%) on the month and increased by 368,000 (1.2%) on the year to 30.4 million. The February 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

In the December 2023 to February 2024 period, the estimated number of vacancies in the UK fell by 43,000 on the quarter to 908,000. Vacancies fell on the quarter for the 20th consecutive period but are still above pre-coronavirus (Covid- 19) pandemic levels.

The total workforce jobs estimate rose in December 2023 by 125,000 on the quarter to 36.9 million, with increases in both employee jobs and self-employment jobs.

Total estimated vacancies in December 2023 to February 2024 were down by 224,000 from the level of a year previously, although they remained 107,000 above their pre-coronavirus (Covid-19) January to March 2020 levels.

Annual growth in total earnings (including bonuses) in the UK was 5.6% in November 2023 to January 2024, and annual growth in employees' average regular earnings (excluding bonuses) was 6.1%.

Meanwhile, annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for total pay rose on the year by 1.4% in November 2023 to January 2024, and for regular pay rose on the year by 1.8%.

Annual average regular earnings growth for the public sector was 5.9%, which is not as high as it has been in recent periods but remains relatively strong; for the private sector this was 6.1%.

The wholesaling, retailing, hotels and restaurants sector saw the largest annual regular growth rate at 7.2%; the manufacturing sector and finance and business services sector both followed at 6.8% and 6.6%, respectively.

Data from the ONS also found there were 203,000 working days lost because of labour disputes across the UK in January 2024. The health and social work industry showed the most working days lost this month.

In the latest period (November 2023 to January 2024), total actual weekly hours worked increased on the quarter to 1.06 billion hours and are above the level a year ago (November 2022 to January 2023). Both men and women’s hours worked increased on the quarter. Average actual weekly hours worked also increased in the latest quarter and are above the level a year ago (November 2022 to January 2023).

ONS director of economic statistics Liz McKeown said, “Recent trends in the jobs market are continuing with earnings, in cash terms, growing more slowly than recently but, thanks to lower inflation, real terms pay continues to increase.”

“The number of job vacancies has also been falling for coming up to two years, though the total remains more than one hundred thousand above its pre-pandemic level,” McKeown said. “Over the last year, there was little change in the proportions of people who are employed, unemployed or neither working nor looking for work, though the overall number of people in work is still rising.”

Recruitment and Employment Confederation (REC) chief executive Neil Carberry said,” Today’s numbers are marginally weaker than expectations as the jobs market waits on growth to return. Recruiters report that firms are still ready to move but are taking longer to make decisions about investment and hiring in the face of economic uncertainty.”

“This explains the relatively slow rate of decline, a picture which contrasts with business surveys that show high levels of optimism for later in the year. The Bank of England beginning to cut the base rate would deliver a shot of confidence to businesses and support a likely bounce back in growth this summer,” Carberry added.

Michael Stull, Managing Director at ManpowerGroup UK, said, “As today’s latest ONS data attests, historically high economic inactivity rates at 21.8% continue to constrict a UK labour market already operating at near capacity.”

“With the UK navigating its way out of the shallow recession recorded in the second half of 2023, the results of the Q2 ManpowerGroup Employment Outlook Survey also released today indicate that national Q2 hiring intent going into the April – June period remains robust and positive at +23%,” Stull said. “Pay growth is weakening at a steady rate, which is likely to fall further when the April 2023 pay awards fall out of the calculation. There is little risk of pay driving inflation to stay higher at this point.”

Stull continued, “Cautious optimism is the prevailing mood amongst the majority of the 2,099 UK employers we recently surveyed, as tactically the UK job market looks increasingly like a chess game.”

“On one hand, small businesses are playing offense and demonstrating the greatest appetite for new hires, creating new roles going into Q2, with almost a third of small organisations with 10-49 workers surveyed (28%) planning to hire ten or more staff. Larger to enterprise-sized companies by contrast, are playing defence, preoccupied with backfilling roles due to employee departures (39%) going into the next quarter,” Stull said.

Janine Chidlow, Managing Director at WilsonHCG said, “According to the ONS, the decline in the employment rate noted in the last quarter has been driven by a fall in part-time workers, while those in full-time work increased on the quarter and the year. This suggests that business confidence has shifted slightly, with employers now investing in increasing their permanent headcount following an increased reliance on temporary resources as economic uncertainty grew towards the end of last year.”

Chidlow added, “What does remain a concern from the latest statistics is the economic inactivity rates of those aged 16-24 years which is now at the highest levels reported in the last four years.”

“With skills shortages rife, particularly in STEM remits, the UK simply cannot afford to have such a significant level of inactivity from the emerging demographic,” Chidlow said. “More needs to be done to encourage these potential workers into meaningful employment that will add to core skills in the UK, or we could soon face a skills deficit on a more significant scale that will only have a detrimental effect on businesses and the economy.”