In this briefing we explore the current labour market trends in the UK, and how these trends might impact the NHS workforce and employing organisations. We've also shared some helpful resources that will help employers to navigate the economic recovery.
The NHS is often the largest employer in a region and, as a result, large numbers of the workforce come from the local community. Shifts in both local and national labour markets affect an organisation’s ability to recruit and retain, so any local response to recruitment and retention must take account of the pressures and opportunities of the wider labour market, particularly for those roles for which the service has active competition for labour from other sectors.
This resource displays key statistics, context around why UK labour market trends are important, signposts to available support and encourages you, as an employer, to consider how to prepare your responses to current UK labour market trends with both short and long-term solutions.
Overview: June 2022
After an initial sharp fall in employment during the first wave of the pandemic, there was a rapid recovery in employment figures in the latter half of 2021 when restrictions eased. However, that recovery appears to have levelled off and the number of those not looking for work and/or not available for work continues to rise.
At the start of the pandemic, rising inactivity was driven by young workers, and by older workers, where the rise in not looking for work was related to COVID-19 restrictions and increasingly, long-term ill-health. Since restrictions eased in the second half of 2021, younger people have increasingly come out of inactivity, but older workers continue to leave the labour market.
Signs are that job turnover remains well above pre-pandemic levels and may even be rising. This is likely to be fuelling record numbers of vacancies and labour shortages as organisations struggle to backfill posts from the (lessening) numbers of who are out of work, looking for and ready to work.
Record vacancies and demand for talent
Job vacancies have exceeded pre-pandemic levels by 20 per cent for almost a year (IES analysis of ONS Vacancy Survey).
As a result, unemployed workers face more job vacancies that match their skills than they would have done before the pandemic. When there are ample employment opportunities, you will need to work even harder to attract talent. Ensuring recruitment processes remain fair, inclusive and provide a good candidate experience are important elements of becoming an employer of choice and using recruitment to also support retention.
Low unemployment masking continued labour shortages
There are now 590,000 fewer people in work than before the pandemic and 490,000 more people economically inactive (IES analysis of ONS Vacancy Survey).
Unemployment is at its joint lowest since 1974, but with employment growth flat and economic inactivity (the measure of those not looking for work and/or not available for work) rising, low unemployment is due to more people leaving the labour force entirely rather than more entering work. This growth in economic inactivity is being driven by fewer older people in work and more people out of work due to long-term ill health. Supporting staff to work longer and offering flexibility to attract and retain the workforce will continue to be an important focus.
Increasing labour turnover may be fuelling vacancies
This is a common feature of labour markets following economic downturns (IES analysis of ONS Vacancy Survey).
After a period of holding onto previous jobs or accepting unsuitable jobs due to the economic uncertainty and reduction in outside opportunities, as the economy recovers there is desire from workers to make the job moves that they would otherwise have made earlier. This in turn is likely to be fuelling higher vacancies and labour shortages as organisations struggle to backfill posts from the (reduced) numbers who are out of work, looking for and ready to work. Retaining staff continues to be one of the most important factors for the NHS to deliver care.
Job finding rates have not increased
A third of those who were unemployed in July–September 2021 found a job by October–December 2021, which is similar to the job finding rates in late 2019 (IFS analysis of ONS Labour Market Data).
Despite the high level of vacancies, the unemployed today are no more likely to find work than before the pandemic. This is consistent with the high level of vacancies due to increased labour turnover as the economy recovers, rather than fundamentally higher labour demand (which would pull additional people into work). By opening routes to people who may not have previously considered or been aware of the variety of roles and careers available in the NHS, you are ideally placed to recruit unemployed local people to retrain, upskill and carve out a sustainable career.
Fewer older people in work is driving a growth in economic inactivity
There are 610,000 more older people economically inactive than pre-pandemic (IES analysis of ONS Vacancy Survey).
The NHS also has an ageing workforce, so renewed focus must be on getting and keeping over 50s in employment, as well as youth employment practices. Making certain recruitment processes remain fair and inclusive and proactively ensuring that age and the ageing workforce is a thread through all organisational practices that will support staff to work longer in the NHS. In turn, increasing participation across older people will help to manage economic recovery and retain the skills and knowledge in the sector that would otherwise be lost.
Young people from disadvantaged backgrounds are twice as likely to be NEET
In October to December 2021 there were an estimated 692,000 young people in the UK who were not in education, employment or training (NEET) (ONS data).
Young people who are NEET risk experiencing unemployment throughout their lives and poor mental and physical health. Keeping focus on youth employment practices and how to connect with marginalised and disadvantaged young people in your community through sustainable pathways into employment will be essential.
Overseas recruitment continues to complement the skills available within the UK labour market
Recruiting from outside the UK to supplement UK-based training and recruitment and training from within local communities remains an option for some roles in the sector.
Current vacancy data, workforce numbers, the numbers of people available for work and the training times required for some health occupations, tells us that the UK labour market alone will not fulfil the sector requirements in the short to medium term. Any overseas recruitment should be undertaken in accordance with the ethical Code of Practice. Examples of employers collaborating to share resources and expertise have shown to use resources more effectively and deliver savings.
Information and Resources
Key to managing economic recovery will be through more inclusive recruitment, use of initiatives to support access to employment, good job design (particularly around flexibility), induction and in work training, as well as workplace support for staff with health, caring and wider needs. Our tools and resources can support you to prepare your response to the current labour market trends with both short- and long-term solutions:
Resources and guidance to help employers ensure they are able to sustain a workforce pipeline.
A guide to increasing supply, widening access to employment and addressing inequalities that persist in communities by providing work opportunities.
Provides tips and tools to support employers with taking positive action to improve retention.
1. Institute for Employment Studies (IES), Labour Market Statistics - Briefing May 2022, https://www.myiep.uk/news/606031/IES-Labour-Market-Statistics-May-2022.htm
2. The Institute for Fiscal Studies (IFS), Job opportunities after the pandemic, April 2022, https://ifs.org.uk/publications/16033