UK wide data
The headline figures remain consistently robust despite the economic backdrop and challenging conditions. The UK employment rate was estimated at 75% in November 2024 to January 2025. This is above estimates of a year ago, and up in the latest quarter. The UK unemployment rate was estimated at 4.4%, also above estimates of a year ago, and up in the latest quarter.
The estimated number of vacancies in the UK in December 2024 to February 2025 was 816,000. Vacancies are broadly unchanged on the quarter and are still above pre-coronavirus levels. As employers brace themselves for the raft of new worker protections under the Employment Rights Bill we can expect to see a cautious approach to recruitment over the coming months.
Annual growth in employees' average regular earnings excluding bonuses in Great Britain was 5.9% in November 2024 to January 2025, and annual growth in total earnings including bonuses was 5.8%. With the increase in employer National Insurance contributions from April this year we can expect earnings to plateau as employers seek to keep costs under control.
It is difficult to think of a more turbulent time in the employment market with the world stage creating political uncertainty and an overhaul of employment legislation. With such a volatile market, labour intensive industries such as hospitality, retail and manufacturing are likely to face the most significant challenges in the short to medium term, with cost-cutting measures becoming an inevitably necessity. When business planning, it is crucial for employers to keep up with the latest employment law developments, including changes to collective redundancy consultation and the restrictions on fire and rehire.
Northern Ireland data
The most recent labour market figures for Northern Ireland show sustained strength in the face of tough economic circumstances. The figures show that over the year both payrolled employee numbers and earnings have increased, while employee jobs have also increased to a new series high. From the Labour Force Survey, the unemployment rate saw a decrease. However, the employment rate has also decreased, and the economic inactivity rate has increased.
The latest HMRC payroll data shows that payrolled employees increased by 0.2% over the month and increased by 1.3% over the year. Payrolled earning decreased by 0.1% over the month and were 6.3% higher than February 2024. Earnings from HMRC PAYE indicated that Northern Ireland employees had a median monthly pay of £2,295 in February 2025, a decrease of £2 over the month and an increase of £137 over the year. Balancing demands for increased pay with rising costs is an ongoing juggle for employers.
The latest Northern Ireland seasonally adjusted unemployment rate for the period November to January 2025 was estimated from the Labour Force Survey at 1.5%. This was unchanged over the quarter and a decrease of 0.7% over the year. The employment rate was unchanged over the quarter and decreased by 0.5% over the year to 72.2%.
Employers in Northern Ireland are eagerly awaiting the outcome of the "Good Jobs" Employment Rights Bill consultation, as the employment law divergence between Great Britain and Northern Ireland grows. Employers should take the opportunity now to take stock on current contracts, policies and procedures to ensure they are fit for purpose in readiness for the inevitable employment law regulation.
Scotland data
The latest Scottish labour market figures for the period November 2024 to January 2025 indicate sustained robustness, despite the challenging economic conditions. The estimates indicate that over the quarter, the economic inactivity rate decreased while the employment and unemployment rates increased. The headline figures for this period show the employment rate in Scotland was estimated at 74.1%, up 0.9% over the quarter. By way of comparison Scotland's employment rate was below the UK rate of 75%. The unemployment rate was estimated at 3.7%, up 0.1% over the quarter. Scotland's unemployment rate was below the UK rate of 4.4%.
The early seasonally adjusted estimates for February 2025 indicate that median monthly pay for payrolled employees in Scotland was £2,466, an increase of 4.8% compared with February 2024. It is perhaps inevitable that we will see some stalling of pay with the increase in employer National Insurance contributions from next month.
Employers across Scotland are preparing for the raft of new employment legislation and are understandably taking a cautious recruitment strategy. With unfair dismissal becoming a day one right, employers are eager to understand the mechanics of the "lighter touch" approach to dismissal during the probationary period. In the meantime employers should be auditing current probationary, performance management and disciplinary procedures to ensure they are robust and fit for purpose when the new legislation is implemented next year.
