The number of temporary employees in the UK fell year-on-year by 15.7% during the December 2023 to February 2024 period, according to seasonally adjusted data from the Office for National Statistics.

For the December to February period, the number of temporary employees stood at 1,417,565. This was 0.69% lower than the revised three-month period from November 2023 to January 2024.

Further data showed that the number of men who were temporary employees stood at approximately 683,541 during the December to February period while the number of women who were temporary employees stood at approximately 734,023.

Of the 1.41 million temporary employees during the period ended February 2024, approximately 308,166 were temporary because they could not find a permanent job; 399,590 did not want a permanent job; 176,983 had a contract with a period of training, and 532,824 cited other reasons.

Meanwhile, the UK unemployment rate for December 2023 to February 2024 (4.2%) is above estimates a year ago (December 2022 to February 2023) and increased in the latest quarter.

The highest unemployment rate estimate in the UK was in the East Midlands (5.9%) and the lowest was in Northern Ireland (2.2%), for the three months ending February 2024.

The East Midlands had the largest increase in the unemployment rate compared with the same period the previous year, increasing by 2.2%, with the North East seeing the largest decrease of 0.9%.

At the same time, the UK employment rate (for those aged 16 to 64 years) was estimated at 74.5% in December 2023 to February 2024, below estimates of a year ago and decreased in the latest quarter.

The highest employment rate estimate in the UK was in the South East (78.3%) and the lowest was in Wales (69.1%), for the three months ending February 2024. London saw the largest increase in the employment rate compared with the same period the previous year, increasing by 1.2% with Wales seeing the largest decrease of 2.8%.

The UK economic inactivity rate for those aged 16 to 64 years was 22.2%, above estimates of a year ago (December 2022 to February 2023), and up in the latest quarter.

Meanwhile, the highest economic inactivity rate estimate in the UK was in Wales (28.1%) and the lowest was in the South East (18.4%), for the three months ending February 2024. Wales saw the largest increase in the economic inactivity rate compared with the same period the previous year, up 2.7%, with the West Midlands seeing the largest decrease of 1.1%.

Payrolled employees in the UK fell by 18,000 (0.1%) between January and February 2024, but rose by 352,000 (1.2%) between February 2023 and February 2024. The early estimate of payrolled employees for March 2024 decreased by 67,000 (0.2%) on the month but increased by 204,000 (0.7%) on the year to 30.3 million. The ONS added that its March 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

Comparing March 2024 with the same period last year, changes in payrolled employees ranged from a 1.3% increase in Northern Ireland to a 0.4% increase in London.

When it comes to earnings, annual growth in regular earnings (excluding bonuses) was 6.0%, and annual growth in employees’ average total earnings (including bonuses) was 5.6%. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH)) for regular pay was 1.9%, and for total pay was 1.6%.

In terms of vacancies, the estimated number of vacancies in January to March 2024 was 916,000, a decrease of 13,000 or 1.4% from October to December 2023. Vacancy numbers fell on the quarter for the 21st consecutive period in January to March 2024, despite vacancies falling in only 8 of the 18 industry sectors.

Total estimated vacancies were down by 204,000 in January to March 2024 from the level of a year previously, although they remained 120,000 above their pre-coronavirus (Covid-19) January to March 2020 levels.

The estimated number of workforce jobs for December 2023 (next updated June 2024) was 36.9 million, an increase of 125,000 jobs since September 2023.

ONS director of economic statistics Liz McKeown said, “Recent trends of falling vacancy numbers and slowing earnings growth have continued this month albeit at a reduced pace. But with the rate of inflation also slowing, real earnings growth has increased and is now at its highest rate in nearly two and a half years.”

“At the same time, we are now seeing tentative signs that the jobs market is beginning to cool, with both a fall in the headline employment rate from our survey and a drop in the total number of people on payrolls from HMRC data,” McKeown said. “However, we would recommend caution when looking at the size of the fall in headline employment, as previously highlighted lower sample sizes mean there is greater volatility in quarterly changes than was the case.”

Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry, said, “Today’s figures capture a labour market that has slowed with the economy, though activity levels overall remain relatively robust with vacancies still high. With business surveys predicting demand for both permanent and temporary workers to pick up in the near term, this looks like something of a soft landing.”

Carberry continued, “While overall pay growth remains high, there are signs of softening in the underlying data that we would expect to increase in pace as large 2023 pay awards continue to fall out of the data over the next couple of months. Sectors affected by the latest National Living Wage increase will not see this, however, and this is likely for be a significant challenge. Employers in these sectors have faced a long tough period since the pandemic in terms of wage and goods price inflation, the cost of Covid loan repayments, labour shortages and price pressure from customers.”

Michael Stull, managing director of ManpowerGroup UK, said, “The UK labour market increasingly resembles an iceberg. The latest ONS data released today represents the visible tip, which is starting to show the issues UK businesses face in the economy and labour market, with a rise in unemployment and inactivity again this month. If left unchecked, the various challenges present formidable obstacles to future economic growth and competitiveness.”

“Addressing the longstanding skill gaps evident across multiple industries and getting more young people into the workforce, should be priorities for UK plc,” Stull said. “Tackling the lack of capacity across the NHS, which is driving up long-term sickness rates amongst working-aged people and exploring incentives and mechanisms by which people aged 55-plus can remain in work and/or assist with mentoring and skills transfer, are further examples which must be addressed if we hope to make improvements in productivity rates.”

“Whilst it would be reductive to look at any single data point and draw too many conclusions right now, today’s ONS numbers provide an opportunity to challenge prevailing ‘inactivity’ stereotypes and explore more inclusive pathways for skills and career development,” Stull added. “Where and how new technologies can be used is also important in order to unlock potential, drive innovation and better capitalise on growth prospects as economic performance slowly moves into more positive territory over coming months.”

Craig Sweeney, EVP of global strategic talent solutions at WilsonHCG, said, “While the latest ONS data has shown both an increase in unemployment and yet another fall in recruitment, the labour market remains tight and employers need to be mindful of this. Skills shortages still prevail across many industries, particularly STEM attributes, and with other data from the Office for National Statistics released at the beginning of the week suggesting that the UK economy is recovering well, a hiring bounce back is likely on the cards. Employers need to be prepared for this or risk losing out to the competition for much-needed resources in the near future.”