ONS data shows the cost of living is pulling older workers back into the workforce
According to the latest ONS data (13th December 2022), a decline in the number of ‘economically inactive’ is a sign that people are returning to work. Between August and October, over forty thousand 50 to 64 year olds rejoined the workforce. This shows that the rising cost of living continues to impact the decisions of jobseekers, employees and businesses.
Chancellor Jeremy Hunt announced that the UK has entered recession in his Autumn Statement, raising concerns about the coming year. The latest ONS data shows that in the third quarter of 2022, employment and unemployment rates increased as more people began looking for work.
At the same time, the estimated number of vacancies is still high at 1,187,000 despite five quarterly falls. Employers are looking for talent, but the rising cost of living and inflation rate are pressuring them to increase salaries to hire the talent they need.
Consequently, salary growth is at an all-time high. However, with inflation still at high levels, real wages shrank by 2.9% in 2022. This is especially impacting the public sector which only saw one third (2.2%) of the salary growth compared to the private sector (6.6%); causing ongoing labour disputes.
Key findings from the ONS data
- Employment and unemployment rates increased between August and October 2022, 0.2% and 0.1% respectively. This was largely due to more people looking for work, including those previously ‘economically inactive’.
- There was a slight increase in the number of people with second jobs in the latest quarter (43,000).
- The number of economically inactive people declined 10% in the third quarter; largely driven by those aged 50 to 64 years returning to work (11.9% decrease).
- In October 2022, one in eight (13%) businesses were affected by industrial action; more than a quarter (27%) of those businesses reported they were unable to obtain necessary goods for their business.
- 417,000 working days were lost because of labour disputes in October 2022, the highest in over a decade. The public sector experienced the most loss of working days, as salary growth remained three times below the private sector (2.2% vs 6.6).
Older workers make a comeback to the workforce
Between August and October 2022, the UK workforce continued to grow. The ONS estimates that payrolled employees for November 2022 will reach a record 29.9 million.
The number of economically inactive people decreased by 10%, largely driven by 50 to 64 year olds who previously reported retirement and long-term sickness. The reason behind the decline in the number of ‘economically inactive’ people is most likely due to the rising cost of living.
Our Hiring Trends Index Q3 2022 found that over 55’s picked a lack of job satisfaction (27%), early retirement (25%) and seeking a higher salary due to the cost of living (24%) as the main reasons for leaving their existing role.
Highest lost days of work in over a decade
Labour disputes continue to put pressure on businesses as the rising cost of living and the salary squeeze push workers to strike.
The ONS reported that one in eight (13%) businesses had been affected by industrial action in October 2022, with more than a quarter (27%) saying they were unable to obtain necessary goods for their business.
In October 2022, 417,000 days of work were lost – the highest in over a decade. This is set to increase in the coming quarter, as more industrial action is expected to take place in December by postal workers, the transport network, paramedics, and nurses.
Labour disputes are more prevalent in the public sector since salary growth has fallen noticeably behind the private sector (2.2% vs. 6.6%). As a result, disruptions to public services will continue for at least until the end of the year. Holding back on raising public workers’ pay makes attracting and retaining public sector employees a challenging task.
To help workers cope with the rising cost of living, the national living wage is set to increase by 9.7% in April 2023.
Totaljobs’ overview of the recruitment landscape
Overall, the rising cost of living is increasing the number of jobseekers, while some employers reconsider their hiring strategies.
Our Hiring Trends Index shows that the rising cost of living and retaining staff are employers’ biggest concerns.
According to our data;
- A third (35%) of businesses increased recruitment in Q3, down from 41% in Q2.
- The hiring time consistently increased, reaching 6.76 weeks, which is relatively high. 17% of employers said lengthy hiring time is a key challenge for them in Q4 and 2023.
- Of the 84% of businesses that recruited in Q3, the industries that were the most likely to have hired in the past three months are Operations (29%), Technology (23%), Sales (19%) and Finance (17%).
- 13% of staff are considering leaving their current role and 19% are undecided.
- Of those who consider leaving, over half (52%) of UK workers say receiving a pay rise in line with or higher than inflation would encourage them to stay in their current role.
- The cost of living is the biggest concern for employers (55%) as well as the effect the cost of living will have on business cost (50%), followed by retaining staff (26%), skill shortages and labour shortages (both 23%).
Totaljobs’ Hiring Trends Index Is a quarterly deep-dive into the recruitment trends that are impacting UK businesses, workers and jobseekers, and gives employers a first look into how the current climate will shape business. This edition looks back at Q3 2022, and ahead to Q4 2022 and 2023, highlighting the current economy and career decisions of over 50’s.
- Read the Hiring Trends Index to learn more about what is shaping the future of the UK job market.