Human resource and employment experts said official figures reveal a reduction in wage growth with an increase in unemployment in the UK as a result of the uncertainty in the global economy.
The April UK Labour Market report from the Office of National Statistics (ONS), shows an increase in unemployment of 21,000. This is compared to the previous three-month period between September and November (2015).
Employment law experts predict that these figures are an indicator that employers are currently being affected (or planning to be) by a “series of costs” extended by the government. These costs include the National Living Wage (NLW), pensions auto-enrolment and the apprenticeship levy that’s upcoming.
The data also showed the employment rate was holding at 74.1%, or the joint highest level since records began in 1971. While wages are still growing, the rate at which wages are increased has definitely slowed. Human resource experts explain that these changes can be a sign of a slowing economy. Companies are trying to be smart, and conserve. When trying to conserve for most businesses, the first place to save is typically employee pay.
One report produced by Begbies Traynor monitors the health of companies in the United Kingdom and how they are affected financially. The most recent results showed that 60,000 businesses in industries most affected by the NLW were already in a wave of financial distress at the beginning of the year.
The mindset in HR departments has seemingly shifted as well. As opposed to looking for places to bring in new hires and find ways to train up, the thought process now seems to be trying to consider ways to keep current workforces motivated. A more productive and happy set of people doesn’t cost the company anything.
HR experts follow up explaining the ONS stats were “pretty modest,” since they still outstripped inflation. It only makes sense that companies now would be more cautious about giving raises and bonuses.
Finally, the ONS figures also found that for the three months to February over 100,000 people had been made redundant. While this was unchanged when compared to the previous year, it was 10,000 more than the previous three months that were examined.
