Resignations, not redundancies, define a turbulent UK jobs market

Resignations, not redundancies, define a turbulent UK jobs market

Close to a million people moved jobs between July and September, and according to ONS statistics, most of the moves came about through the choice of the individual.

What’s behind the ‘great resignation’?

The number of those moving jobs in the last 3 months is so startling that it’s being dubbed ‘the great resignation’, and is largely thought to be down to individuals reassessing their working lives post the pandemic.

Work from home culture drives employee relocation

Through rapid progress in virtual meeting technology, many employees have decided that their future lays with employers who embrace flexibility, and Britain’s coasts and villages have seen an influx of city workers deciding that ‘homeworking’ means that home can be anywhere. Catherine and I were lucky enough to be in the Costa Del Sol last week, where Spanish estate agents are reporting unprecedented levels of demand, with buyers asking first about fibreoptic capability for their new purchases – if working from home can be done from Cornwall, then why not the Costas?

What does this mean for employers trying to achieve a return to ‘normal’?

Many employers are struggling with the ‘office/home’ debate and its clear that the pandemic has a caused a seismic shift in global working practices. Some employers still believe that working from home is not a long term phenomenon, but as the months roll by, it’s difficult to see how pre-pandemic working practices will return anytime soon. Most employers whose organisations can provide for homeworking have opted for a hybrid solution, at least for the foreseeable future, and some (myHRDept included) have switched to entirely virtual working, though this may be more suitable for smaller organisations.

Wage inflation

The Bank of England is said to be concerned about wage inflation, and certain well publicised examples have stoked the fire – there’s a global shortage of lorry drivers (this is not just a UK problem) and as ever in economics, when supply goes down, pay goes up. This principle extends to other sectors and to the supply of goods – shortages of semi-conductors and other materials has resulted in spiralling prices, project delays and empty shelves, and Brexit’s negative impact on our economy is yet another contributory factor.

Between April and June, wage inflation was 8.8% (total earnings) and 7.4% (base earnings) though ONS analysis warns of caution with this result, and believes that the real underlying rate of wage inflation, which leaves short term influences aside, may be closer to 3.5 – 4.9%. Construction and retail/hospitality & hotels continue to bear a significant burden of wage inflation with 14 and 11% year on year growth respectively.

Speculation continues that the B of E may raise interest rates to try to stem inflationary pressures on December 16th, though many pundits think the Bank may do nothing until February next year.

Unprecedented job vacancies, job redundancies slightly up

myHRdept reported recently that job vacancies had topped a million, well now we have closer to 1.2m vacancies, fuelled in part no doubt by the ‘great resignation.’ Employers added 160,000 new staff to their payrolls, and while redundancies were slightly higher in the quarter, this can be attributed to a relatively small number of people laid off following the end of the furlough scheme.

Furlough scheme final impacts

The £70 billion scheme undoubtedly prevented a large wave of early pandemic job losses, though in the end many (including the author) believe it was a blunt instrument which should have ended earlier across the board and, in the latter phases, should have taken a sector by sector approach to target support to industries that continued to need it, while reducing the burden to the taxpayer overall.

Looking ahead?

The labour market is in the midst of a massive adjustment and, for all of the reasons laid out in this article, it’s hard to see whether we’re in the eye of the storm, or some way past it. The furlough scheme, which did interfere with standard market behaviours, only ended a couple of months ago after all. What is clear is that post Brexit our government must focus in creating stable relationships with our former partners in Europe, while forging new economic relationships elsewhere.

HR implications?

It is more important than ever that employers continue to engage with their employees about their working preferences and challenges. Where adjustments to working practices are made, it is important to review their effectiveness ongoing, and make necessary adjustments. For these reasons we encourage employers whose working practices are evolving to make temporary changes to terms (which can be achieved via carefully drafted side letters) rather than committing to permanent contractual variations.

Where hybrid working results in some employees working more in the office than others, it’s important to ensure that workplace policies are equally applied, and that ‘out of sight’ doesn’t mean ‘out of mind.’

We are also seeing a continuing level of questions around the treatment of non-vaccinated people, a subject covered by our earlier article:

For more on this topic:

Survey of 7,000 hybrid workers reveals office noise as one of the major issues around returning to work…click here for the article.

Hybrid working and flexible working requests….click here.

Rishi’s call for a return to the office, as Civil Service hunkers down to a 2-day week…..click here.

Call for a ‘back to normal task force’ to help rather than hinder employers trying to achieve a return to normality….click here.

HR Support from myHRdept

Hybrid working will however necessitate changes to management practices and HR policies will need to change too. In addition to the obvious health and safety issues (inadequate seating etc.) more attention will need to be paid to data protection, staff inductions, staff engagement etc. Many policies will need to be reviewed (myHRdept’s HR policy pack is currently being updated for 2022) in order to take account of the proliferation of home working, and employers will be monitoring the development of new technology to aid ‘real time’ working.

If you need help updating your policies or creating a homeworking policy, myHRdept’s HR support services are ideal. Included within all of our HR outsourced support packages is a bank of support hours to help manage staff issues. In most cases client HR support hours banks are not impacted by time spent updating handbooks, employment contracts, or introducing new policies.

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at enquiries@myhrdept.co.uk to discuss your requirements, or contact us via our website and we’ll call you back.

Homepage: www.myhrdept.co.uk

 

 

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