Job figures reveal exodus of skilled talent

More than one in five adults in the West Midlands are out of the workplace, with 'economic inactivity ' significantly increasing in the region.

The post-Covid brain drain has added to skills shortages in the region, restricting growth needed to stimulate the economy, according to Greater Birmingham Chambers of Commerce.

Latest regional labour market statistics show that the West Midlands saw the largest increase in the economic inactivity rate compared with the same period last year, up by 2.2 percentage points to 22.7 per cent.

Meanwhile the unemployment rate for the quarter from December 2022 to February 2023 compared to the previous three months rose by 0.3 percentage points to 4,6 per cent while the employment rate across the region fell by 0.8 points to 73.7 per cent.

National statistics show the UK 's rate of economic activity at 21.1 per cent, with an unemployment rate of 3.8 per cent compared to an employment rate of 75.8 per cent.

Emily Stubbs, senior policy and projects manager at the Greater Birmingham Chambers of Commerce said, “The significant proportion of West Midlands residents leaving the workforce over the past year places further pressure on a relentlessly tight labour market.

“Despite the latest decrease, there remain over a million unfilled vacancies across the country, and the Chambers ' latest Quarterly Business Report reveals that over two thirds of Greater Birmingham businesses looking to recruit face difficulties doing so.

“This loss of skilled talent exacerbates long-standing skills shortages in the region, restricting the business growth needed to drive the economy onto surer footing.

“It is critical that as a region, we continue collaborative work to facilitate business investment in up- and re-skilling talented individuals.

“Nationally, as employers look to make workplaces more accessible and flexible, the Government must implement the childcare reforms announced in the Spring Budget as quickly as possible, ensuring that high-quality provision meets demand and supporting parents and guardians looking to re-enter the workforce to do so.

“Where firms are unable to access the skills and labour they require within the country, the Government must also work with businesses to ensure that the Shortage Occupation List reflects these challenges, enabling them to access the skills and labour needed from outside of the UK. ”

Statistics show that from January to March 2023, the estimated number of vacancies fell by 47,000 to 1,105,000. The decline reflected uncertainty across industries, with economic pressures blamed for holding back recruitment.

Growth in average total pay (including bonuses) was 5.9 per cent while growth in regular pay (excluding bonuses) was 6.6 per cent for the December 2022 to February 2023 period.

Average regular pay growth for the private sector was 6.9 per cent for the December 2022 to February 2023 quarter while the corresponding figure for the public sector was 5.3 per cent, with the gap between the two sectors narrowing in recent months.

In real terms (adjusted for inflation), growth in total and regular pay fell on the year in December 2022 to February 2023, by 3.0 per cent for total pay and by 2.3 per cent for regular pay. A larger fall on the year for real total pay was last seen in February to April 2009, when it fell by 4.5 per cent, but it still remains among the largest falls in growth since comparable records began in 2001.

To find out more about how businesses are faring in Great Birmingham click here and register your place to attend the launch of the Chamber 's Quarterly Business Report for Q1 2023.