By Daniel Hunter
Gerwyn Davies, Labour Market Adviser at the Chartered Institute of Personnel and Development (CIPD), believes that the drop in unemployment rate announced today (Wednesday) is countered by the continued pay squeeze.
Date released this morning by the Office for National Statistics (ONS) have shown that unemployment in the UK fell by 14,000 between October and December 2012.
“The latest figures show that the run up to Christmas provided mixed blessings for employees and jobseekers, with buoyant recruitment but low pay growth," said Davies.
"In line with the results of recent CIPD surveys, the UK jobs market strengthened significantly in the final quarter of 2012. However, the medium-term outlook remains less certain, as the public sector seems likely to continue to shed jobs and there are questions over the private sector’s ability to sustain this momentum unless economic growth resumes soon.
“The recent private sector recovery is being driven by full-time employment but temporary jobs account for nearly a third of the last quarter’s increase in employment. As indicated in the latest CIPD/SuccessFactors Labour Market Outlook report, almost half of temporary employees (44%) would like a permanent contract, including a majority of temporary employees aged between 25-54.
“Today’s wage growth figures also demonstrate how employers have been able to support high employment levels against the backdrop of a stalling economy. With basic pay inflation now running at 1.3% - equalling a three and a half year low - the living standards of employees will continue to fall given the Bank of England’s expectations of higher inflation.
“Taken together, today’s figures show the continued challenges employers face in retaining and motivating employees when their ability to offer higher pay or more job security is limited.”
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