Labour market and pay growth remain strong helped by supply of migrant workers

The CIPD responds to the official labour market overview statistics for the period April – June 2019 from the Office for National Statistics (ONS)

A relatively sharp increase in the number of non-UK citizens that have joined the UK workforce have helped meet strong labour demand over the past year. Non-UK born citizens accounted for 42 per cent of the overall increase in employment of 430,000 during the past year. 

The sharp increase in employment levels has helped put upward pressure on pay. Basic pay growth has increase by 3.9 per cent of the past year, which is also due to the annual uprating in the National Living Wage and more generous public sector pay settlements. 

Gerwyn Davies, senior labour market adviser at the CIPD, said:

"The UK labour market continues to stand strong despite the current political and economic headwinds. Employer demand for workers remains robust, which is partly being met by a relatively sharp increase in the number of non-UK nationals in employment. A significant proportion of migrants workers are filling skilled vacancies, especially in healthcare, which may not otherwise be filled. Non-UK citizens are therefore playing an essential and complementary role to the demands of the UK labour market. It is key that the UK's future immigration system is flexible and responsive to the specific skills needs of the UK economy. 

“The tightening labour market, especially in sectors such as construction, is clearly putting pressure on firms to raise wages for staff. Looking ahead, organisations need to address their workforce pipeline challenges before migration restrictions hit them hard - improving pay on its own will not be enough.” 

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