The number of temporary workers in the UK declined by 0.2% year over year in the September-November 2024 quarter to approximately 1.50 million, according to seasonally adjusted data published on 21 January by the Office for National Statistics (ONS).

The data also found the number of temporary workers is down 2.2% when compared to the August through October quarter of this year.

Temporary workers represented 5.1% of all employees in the September-November quarter, according to the ONS figures.

Of the overall 1.50 million temporary workers during the period ended November 2024, approximately 371,127 were temporary because they could not find a permanent job; 402,439 did not want a permanent job; 155,219 had a contract with a period of training, and 574,884 cited other reasons.

ONS data showed that the number of men who were temporary employees stood at approximately 709,041 (down 0.6% over the year) during the September to November period, while the number of women who were temporary employees stood at approximately 794,629 (up 0.1% over the year).

The ONS also published further Labour Force Survey (LFS) estimates. It adds that increased volatility of LFS estimates, resulting from smaller achieved sample sizes, means that estimates of change should be treated with additional caution.

The UK unemployment rate for people aged 16 years and over was estimated at 4.4% in September to November 2024. This is above estimates from a year ago and up in the latest quarter. The highest unemployment rate was in London (6.2%) and the lowest was in Northern Ireland (1.7%).

At the same time, the UK employment rate for people aged 16 to 64 years was estimated at 74.8% in September to November 2024. This is largely unchanged from a year ago, but down in the latest quarter. The highest employment rate in the UK was in the South West (78.3%) and the lowest was in Wales (70.0%).

The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.6% from September to November 2024. This is below estimates of a year ago, and down in the latest quarter. The highest economic inactivity rate was in Northern Ireland (26.1%) and the lowest was in the South West (18.5%), from September to November 2024.

ONS data also showed that the estimated number of vacancies in the UK decreased by 24,000 in the quarter to 812,000 in October to December 2024. Vacancies decreased over the quarter for the 30th consecutive period but are still above pre-COVID-19 pandemic levels.

Annual growth in employees’ average earnings for both regular (excluding bonuses) and total earnings (including bonuses) in the UK was 5.6% from September to November 2024. HM Revenue and Customs Pay as You Earn (PAYE) Real Time Indicators (RTI) pay data showed a similar annual growth rate when looking at both rates including arrear payments.

Annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 2.5% for regular pay and 2.4% for total pay from September to November 2024.

Changes in the number of payrolled employees ranged from a 0.6% increase in Northern Ireland to a 0.5% decrease in Scotland when comparing December 2024 with the same period the previous year.

ONS director of economic statistics Liz McKeown said in a press release, “The number of employees on payroll, drawn from tax data, fell in the three months to November. Meanwhile, our household survey also reported a fall in the number of employees, with a rise in unemployment over the same period. However, we continue to advise caution when interpreting short-term movements from this survey where volatility remains a challenge, especially for more detailed breakdowns.”

Commentary

“This morning’s labour market data shows weakening performance before Christmas, reflecting business trading and cost concerns,” Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry said. “That will not come as a surprise to watchers of the business surveys. The real test of this trend is what happens in January and February as firms return to hiring after Christmas, where anecdotes from recruiters in the private sector are not as gloomy.”

“The underlying issues we have seen in the labour market over the past few years are still clearly visible in today’s release - an employment rate below pre-pandemic norms, and higher economic inactivity,” he said. “But these challenges risk being added to by shorter-term cost concerns, resulting in today’s rise in unemployment. At the highest level, this is not a weak jobs market, with unemployment still low by historic standards and vacancies high, but the trend is concerning.”

Carberry also addressed the volatility of the ONS Labour Force Estimates.

“Accurate and timely jobs data is central to driving economic strategy,” Carberry added. “The ONS labour market statistics must deliver a clear snapshot of the labour market. It is good to see the progress that has been made on the Labour Force Survey’s recovery, but this effort must be maintained now.”

Michael Stull, director at ManpowerGroup UK, noted that with Employer National Insurance rising and threshold changes delayed until April, the UK’s hiring recession is likely to persist for the foreseeable future.

“That said, pay growth is improving while inactivity has decreased slightly again, which is to be welcomed,” Stull said. “Over the medium-term businesses will need to invest in boosting skills and productivity by adapting to the new realities of the market. We can’t fully rely on the ONS labour market data as we have done before because of work underway to address its accuracy. This makes how the Bank of England reacts to the labour market much less predictable each month and it emphasises the need to closely monitor multiple data sources for signs of employment trends.”