Dorset Local Enterprise Partnership share Labour Market intelligence gathered from national statistics and data analysis to track Dorset’s Labour Market. This forms part of our role in promoting economic growth for Dorset. Summary findings from the full Labour Market Insights report are shared below.
Key highlights of the Labour Market Insights report (March – Sept 2023) include:
Employment & Pay:
- Dorset businesses expected to keep staff numbers broadly stable over the remainder of 2023 and into 2024
Recruitment & Vacancies:
- Some signs that recruitment difficulties continued to ease by the end of September, although concentrated to the lower end of the skills range
- Dorset had an average of 9,500 vacancies advertised per month in 2023
Unemployment Levels:
- 9,300 people are unemployed in Dorset (2.6% compared to 3.7% nationally) as at end of September 2023
An overview of the national picture
At a national level the labour market has continued to soften with vacancy levels continuing to fall from their historical highs at the end of 2022. Despite this, wage growth has been strong – in reaction to continued high inflation – and for the first time in recent years it broadly reached parity with inflation which is now beginning to slow. Businesses have come under pressure to increase wages, helping employees withstand some of the squeeze on incomes.
The increase in interest rates that have occurred as a reaction to inflationary pressures are making an impact, particularly with evidence that house prices are beginning to fall – although rental levels remain high. This means that household wealth has come under pressure, alongside the squeezes on household income.
Employment & Pay
The Bank of England reported employment intentions had reduced over the past couple of months and they had eased significantly since the start of the year. However, businesses generally expected to keep staff numbers broadly stable over the coming year. The Bank expected pay settlements to ease gradually over the rest of 2023 and into 2024. Fewer businesses expected to make ‘cost of living’ payments to staff over the coming year than done so last year. Many businesses, especially in consumer services, remained concerned about the possible impact of National Living Wage increases next year.
Recruitment & Vacancies
There were signs that recruitment difficulties continued to ease. The easing was still concentrated at the lower end of the skills range, but there were some indications that recruitment challenges were becoming more general. Recruitment remained difficult for businesses in sectors with persistent skill shortages, such as IT, engineering, and finance.
Nationally, ONS reports an estimated 6% fall in the number of vacancies in the third quarter of 2023 compared to the second quarter of 2023. In contrast to the national picture of softening demand, vacancies across Dorset have been consistent through the Summer and into early Autumn.
- Dorset has had an average of 9,500 vacancies advertised per month in 2023
- Comparted to the same period last year, nationally vacancies are +16% in Dorset vacancies are +49%
Unemployment levels
Unemployment in Dorset is lower than the national average.
- With 9,300 people unemployed in Dorset (2.6% compared to 3.7% nationally) as at the end of September 2023
- Interestingly 16,500 people joined the workforce in Dorset from March to September 2023
Economic Inactivity
As we have seen previously, increases in economic inactivity in the post-pandemic period have been mostly driven by those aged 50-64 with long term sickness increasing to record levels, and those caring for family or home decreasing to record lows. We undertook some Dorset specific analysis on this category and have seen that the increase in economic inactivity post pandemic reached a peak in Q4 2022, with numbers consistently dropping during 2023.
Labour demand across sectors and skills
Across key sectors labour demand remains strong. The first 9 months of 2023 have seen vacancies across Dorset increasing four and a half times, along with strong growth in goods services and wholesale trade. There was a small fall in the number of advertised vacancies in the human health sector, despite it remaining as the most significant sector in terms of labour demand. Hospitality vacancies have also risen to a new high in 2023.
Demand for lower and mid-skilled roles in Dorset continues to be persistent, making up 28% of vacancies and focused particularly on Elementary and Caring occupations. This is likely a reflection of higher turnover, declining supply and possible changes in the way employers recruit for these roles in recent years.
The openings for high skilled jobs that typically demand university and college graduates in Dorset however remain critical to local growth. This accounted for c46% of the advertised vacancies, with mid-skilled roles making up c27%.
Finally, as an overview of this six month period, we see finance, project management, auditing, invoicing and accounting as the top five sought after skills. Personal care comes in at number six, and nursing at number nine. Digital skills requirements strongly reflect the need for Microsoft package skills. As previously noted, the need for soft skills remains strong.
For a full presentation of Dorset's Labour Market Insight for March - September 2023 click here