In 2017, the number of people unemployed in the UK dropped by 75,000. As a result, unemployment rates dropped to 4.3% in August 2017, lower than the 4.5% recorded in March 2017 and its lowest rates since 1975.
The employment rate continued to rise throughout 2017. Between September and November there were 32.21 million people in work in the UK – 102,000 more than figures from June to August and 415,000 more than the previous year. The employment rate at 75.3% hit a joint high for employment since records began in 1971.
Industrial cleaning company DCS Multiserve discuss the main reasons why people in the UK are unemployed and whether there are any patterns that could further help us find a solution to reduce the number of unemployed people living in the UK.
The main reasons for unemployment
As of October 2017, there were approximately 1.45 million unemployed people who were of working age. Disabled people are more than twice as likely to be unemployed than non-disabled people – which could be a result of the barriers to work they may face.
However, there are 3.4 million disabled people who are in employment. Breaking down the barriers for disabled people in employment would help the UK economy significantly – a 10% rise in the employment rate amongst disabled adults would contribute an extra £12 billion to the Exchequer by 2030.
There is also frictional unemployment and structural unemployment to consider. Frictional unemployment is caused by the time that people take away from working to transition between jobs, career changes and finding your first job after graduation. This type of unemployment is difficult to fully eliminate from society.
Structural unemployment, however, is caused by the mismatch of skills across the labour market. There are four kinds of structural unemployment:
This refers to unemployment that’s caused by individuals having difficulties learning new skills for a new industry or technical change.
This is unemployment caused by difficulties when moving regions for a job. For instance, there may be jobs suitable for you in London, however, finding accommodation, schooling and commuting may be difficult.
Technical developments are being rolled out across most industries continuously. This type of unemployment refers to instances when technology is replacing humans leading to a fall in labour demand.
Structural change in the economy
This type of change can lead to unemployment caused by a decline in demand for industry roles – for example a decline in coal mines due to a lack of competitiveness, which meant there was reduced demand for coal miners who then found it difficult to find a job in a new industry.
However, according to the Office for National Statistics, the amount of time that people are out of work in decreasing. Between September and November 2017, there were 830,000 people who had been unemployed for up to six months, 124,000 fewer than for a year earlier. Furthermore, there were 225,000 people who had been unemployed for between six months and one year, reduced by 12,000, and 384,000 people who had been unemployed for over one year, 24,000 fewer than for a year earlier.
Who is employed?
The employment rate for men is slightly higher than it is for women. According to the Office for National Statistics, the male employment rate in the UK stands at 79.9% as of September to November 2017. For females, it was 70.8%.
The increase in the employment rate for females over previous years could be partly because of the ongoing updates to the State Pension age for women, meaning fewer women are choosing to retire between 60 and 65 years old.
However, despite these figures, unemployment rate was higher amongst men than women – there were 883,000 unemployed men between September and November 2017, 41,000 fewer than a year earlier. There were just 721,000 unemployed women, 40,000 fewer than a year earlier.
Approximately 47% of the UK workforce are women. There were approximately 23.35 million people working full time in 2017, compared to 8.55 million people working part-time – both figures significantly larger than the previous year’s figures showing progression in the UK’s employment rate. Part-time employment is higher for women than men. 2.11 million men are working part-time, compared to 5.85 million women. This could be because 38% of employed women have dependent children.
The UK’s employment rates typically refer to people employed or unemployed between the ages of 16-64 years old. However, the employment rate varies when you break down the rate by age group. The employment rate is the lowest for the 15-24 years old age group at 50.9%. When looking at the 25-54 age group, the employment rate is significantly higher, reaching 83.8% in Q2 2017. For the 55-64 years old age group, the employment rate stands at 64.1%.
Can you control staff turnover?
Zero-hour working contracts are just one influencing factor on the UK’s unemployment rate – whilst it helps people take a step into employment, these contracts do not guarantee work so people are unsure of them.
The number of people on ZHCs reached record levels last year. According to the Office for National Statistics, between April and June 2017, there were approximately 833,000 people on zero-hour contracts. The BBC reported that employers have received a great deal of backlash for ZHC’s – with some firms having been accused of exploiting workers by using them.
Further statistics from the Office for National Statistics revealed that people on ZHCs work 26 hours a week, with just over a quarter saying they want more hours in their current job. Workers who don’t get the working hours they need are more likely to look for a role elsewhere.
Organisations can work to improve the overall employment rate by providing a better environment to support disabled workers and improve staff turnovers with additional training, permanent working contracts and company benefits.
A secure permanent contract makes your employees feel safe in their role and valued – as opposed to only being acknowledged when they are needed. Training will ensure that your employees are always up-to-date with processes and technology to help the business run smoothly and so that they always have the correct skillset for their position.
There will always be some influencing factors which can’t be solved, such as frictional unemployment and a degree of disabled unemployment – but as a whole, the UK’s unemployment rate is improving slowly but surely as more and more people are in employment or actively looking for work.
From an employer’s perspective, it is your responsibility to ensure you hire the right people for the role and provide a safe and happy workplace for your staff. It makes all the difference if your employees actually want to work for you. Whether it is a full-time or part-time contract, permanent or temporary contracts are significantly favoured over zero-hour contracts. Try and eliminate them from your business and provide your staff with some security.