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News : UK Economy Last Updated: Feb 20, 2013 - 4:46 PM


UK number of people in work jumps to new record: Real value of earnings fell
By Finfacts Team
Feb 20, 2013 - 2:37 PM

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UK unemployment fell in the three months to December 2012, while the number of people in work jumped to a new record. The real value of earnings fell.

The jobless total fell by 14,000 between October and December to 2.5m, the Office for National Statistics (ONS) said today.

For October to December 2012, compared with July to September 2012, the number of people in employment increased and the number of unemployed people decreased. Fewer people claimed Jobseeker's Allowance in January 2013 than in December 2012. The rise in the number of people in work was 154,000, comparing October to December 2012 to July to September 2012. Overall there were 29.73m people employed, of which 73% were working full-time and 27% were working part-time.

Between October to December 2011 and the same period in 2012 there was a 394,000 rise in the number of people working full-time, the largest annual increase since 2005. There was also an increase of 190,000 in the number of people working part-time. The more recent increases in fulltime employment have not offset the falls that occurred through the 2008-09 recession. For the most recent period in October to December 2012, full-time employment was 378,000 lower than in April to June 2008, the first quarter of the 2008-09 recession. Part-time employment was 572,000 higher compared with the same period.

Total pay (including bonuses) rose by 1.4% compared with October to December 2011. Regular pay (excluding bonuses) rose by 1.3% compared with October to December 2011 compared with a 2.7% inflation rate.

The CBI is Britain's biggest business lobbying group and Neil Carberry, CBI director for employment and skills, said today: “It's pleasing to see businesses are continuing to create jobs, though the weakness of pay growth shows we are not out of the woods yet.

“It is particularly good that so much of this month's jobs growth is driven by full timers, given worries about under-employment. It's also good news that jobs are being created in most regions across the country.”

Economists are surprised by the divergence of economic activity and job creation. Some speculate that it could be that employers are holding on to staff, or recruiting in anticipation of an upturn.

Roger Philby, CEO of The Chemistry Group, a management consultancy that specialises in using predictive assessment to determine human performance at work, commented: "So an interesting conundrum in today's employment figures, summed up neatly by John Philpott, director of The Jobs Economist, who stated 'We are in a middle of both a jobs boom and a pay slump as jobseekers struggle to gain or retain employment in a stagnant economy by pricing themselves into work…with the economy using more and more people at falling real rates of pay to produce a static level of output.'

So as the government will no doubt celebrate their job creation policy, the ONS has said the UK economy is still in decline or flat.

The measure of the number of people in jobs shouldn't be, and never was, the measure of economic prosperity. The banking boom was not about 100% employment or overly engaged staff it was about a rising tide --“even turkeys fly in a hurricane". We saw this in the mobile telecommunications boom that led to the unrelenting growth of the big mobile players; did these companies thrive because their employees were better or more engaged than another? The truth is they thrived in spite of whether their people turned up and were productive. As the market changed and the tide went out, the leadership and culture of these organisations were exposed as flawed, shallow and the people not truly engaged. The hiring processes was inaccurate and not fit for purpose and development processes an exercise in box ticking.

What we find in the employment numbers is nothing has changed. Yes, more people are being employed and no, these people are no more productive than the people they join or who preceded them.

The question is whose fault is that?

It's not government, it's not even HR…it's the CEO's of these firms.

We would argue that if organisations hired, developed and nurtured the right people for their organisations in a systematic and objective way they would thrive, productivity would increase. Smaller yes, more effective, definitely.

In order for our economy to increase in productivity, we believe organisations need to shrink, less of the right people, not more of the wrong. You need to intelligently contract before intelligently expanding.

Our data suggests that organisations currently have 25% of the right people in their organisation, in order to shift economic productivity, 75% of an organisation’s workforce needs to change. If organisations are currently flatlining with 25% of the right people, it would only require an extra 25% of the right people for them to thrive. Fifty percent less people then would create an organisation that was 50% more productive. It's logical, if I had double the amount of people behaving and performing like my top 25% then usually I would get double the performance, surely?

The way the economy views employment data is flawed. Chemistry has a model that looks at how organisations hire, develop and energise their people to give a better view of the productivity of that company vs. the productivity opportunity available. We know today most organisations are exploiting 25% of their opportunity. Adding more of the wrong people doesn't change this.

Our view of what's happening is a complete lack of joy…seriously declining productivity which is what the numbers suggest is directly linked by the moments of joy I have in my work. Some call it "flow", Maslow described it as 'self-actualisation,' consultants call it "engagement"…we call it people bringing their whole-selves to work."

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