With January’s UK labour market overview echoing the trends of 2022, what’s to come in February’s report? There are certainly gloomy clouds ahead – high inflation, unending strikes, and the prospect of an economic recession are all taking their toll on the labour market. At the same time, there are some silver linings: the job market has remained robust, nominal wage growth is strong, and unemployment and layoffs are low. Will this continue?
Here are the trends we’re expecting to see in February’s report, out next Tuesday:
- The job market will continue its slow slide: vacancies are likely to fall while redundancies and unemployment rise.
- With inflation persisting at record-high levels, real wage growth will likely remain below zero even as nominal wage growth reaches new highs.
- Labour disputes, already at a decades-long high, will continue to climb as the data reflects December’s winter of discontent.
Are mass layoffs a universal concern?
Despite widespread reports of mass layoffs, ONS data has repeatedly shown redundancies are extremely low by historical standards. Although layoffs are on the rise, they remain below pre-pandemic norms. In December 2022, we showed that while the perception of layoffs has surged, both in Google Trends data and in workplace conversations amongst employees on Fishbowl, discussion around redundancies in Glassdoor reviews remains low.
When filtered by industry, another story starts to emerge. Glassdoor’s data shows that tech employees are particularly concerned about layoffs, with mentions increasing 262 percent year-on-year in January 2023. This figure contrasts sharply to overall discussion amongst employees in non-tech industries, which has only risen 51 percent.
During the first coronavirus lockdown, discussion about redundancies rose much higher in tech than in other industries.Tech is a relatively young industry with lots of startups, which might mean more layoffs than other industries. Despite this difference, the trend in mentions was broadly similar across industries. Discussion jumped sharply in March then began falling in June 2020.
However, 2022 tells a different tale – the pattern amongst tech workers has diverged from the trend seen in other industries, with tech mentions growing much more quickly. This implies that this latest round of layoffs may be particularly concentrated in tech, an industry that hired rapidly during the pandemic but whose services are no longer as needed in the post-pandemic world.
Job satisfaction in striking industries
With strikes every other week, how do employees in these industries feel about their work? To investigate this question, we investigated job satisfaction by industry. Since most coronavirus restrictions ended in summer 2021, overall employee sentiment has been declining – in line with a rise in complaints of burnout and overwork.
While we’re seeing this pattern in most industries, industries with significant strike action appear to have particularly low employee satisfaction, both before and after the pandemic. In January of 2023, healthcare and transportation employees rated their workplaces an average of 3.41 and 3.31 respectively, compared to 3.62 overall and 3.76 in tech.
Conclusion
Clouds are on the horizon in the job market – a rise in tech layoffs, record numbers of strikes, lower employee satisfaction and declining real wages are a few of the gloomy signs we’re likely to see in the next labour market report. At the same time, the job market has proven far more robust than many expected, with vacancies remaining high and redundancies low. Glassdoor’s data also suggests that layoffs may be particularly concentrated in industries like tech that surged during the pandemic, with other industries less vulnerable. Overall, February’s labour market report is likely to be a mixed bag.
