This report provides HR & Finance Professionals with an insightful overview of the UK labour market, based on the December 2024 Office for National Statistics (ONS) report. It highlights key employment trends, workforce activity, job vacancies, and pay growth, helping HR teams to make informed strategic decisions in workforce planning and talent management.

Key Findings

Payrolled Employees

The number of payrolled employees saw a modest increase of 24,000 (+0.1%) between September and October 2024, reflecting relative stability in employment levels. Over the year, employee numbers grew by 140,000 (+0.5%), showing gradual year-on-year improvement. However, between August and October 2024, a slight decline of 22,000 (-0.1%) occurred, indicating short-term fluctuations that HR leaders should monitor. Provisional estimates for November 2024 suggest a monthly decrease of 35,000 (-0.1%) but an annual increase of 76,000 (+0.3%), bringing the total to 30.4 million employees.

Employment and Unemployment Rates

The employment rate for people aged 16 to 64 reached 74.9% for August to October 2024, showing little change compared to the previous year but a small improvement in the most recent quarter. The unemployment rate for those aged 16 and over rose to 4.3%, highlighting a slight increase both on the year and quarter. For HR teams, this reflects potential challenges in managing redundancies and supporting re-employment initiatives. Meanwhile, economic inactivity among those aged 16 to 64 fell to 21.7%, signaling an improvement in workforce participation rates.

Workforce Jobs

Workforce jobs reached 36.8 million in September 2024, an increase of 73,000 (+0.2%) since June 2024. This growth was driven by both employee roles and self-employment, suggesting opportunities for HR professionals to support diverse and flexible employment models to meet evolving workforce needs.

Claimant Count

The UK Claimant Count rose to 1.769 million in November 2024, reflecting increases both monthly and annually. For HR professionals, this signals a continued need for targeted recruitment strategies and workforce development initiatives to tap into available talent pools.

Job Vacancies

UK job vacancies fell by 31,000 in the quarter to 818,000 for the period of September to November 2024. This marks the 29th consecutive quarter of decline. However, vacancy levels remain above pre-pandemic benchmarks, underscoring ongoing demand for skilled workers. HR teams must remain proactive in addressing skills shortages and adapting talent acquisition strategies.

Average Earnings

Between August and October 2024, annual growth in average earnings reached 5.2% for both regular pay (excluding bonuses) and total pay (including bonuses). Adjusted for inflation (CPIH), real-term pay grew by 2.2%, offering employees a tangible improvement in purchasing power. For HR professionals, this highlights the importance of competitive compensation strategies to attract and retain talent in a tight labour market.

Labour Disputes

An estimated 42,000 working days were lost due to labour disputes in October 2024, underscoring ongoing tensions in industrial relations. HR leaders should focus on proactive engagement, effective communication, and robust dispute-resolution processes to maintain workforce stability.

Analysis and Context

Labour Force Survey (LFS) estimates have shown increased volatility due to smaller sample sizes. HR professionals are advised to consider these figures alongside other indicators, such as Workforce Jobs (WFJ), Claimant Count, and PAYE Real-Time Information (RTI), to gain a comprehensive view of labour market dynamics.

The continued decline in job vacancies highlights the need for HR teams to address ongoing skills gaps and invest in training, development, and retention strategies. Meanwhile, positive pay growth relative to inflation presents an opportunity to strengthen employee value propositions through competitive salaries and benefits.

The UK labour market presents both challenges and opportunities for HR professionals. While employment rates and workforce jobs show resilience, declines in payrolled employees and job vacancies point to areas requiring attention. Rising pay growth is a positive trend that HR teams can leverage to enhance retention and recruitment efforts. By closely monitoring labour market indicators, HR professionals can align their strategies to effectively meet current and future workforce demands.

Source: Labour market overview, UK – Office for National Statistics