THE MONSTER JOBS CONFIDENCE INDEX · 2019. 9. 24. · 1. MONSTER JOBS CONFIDENCE INDEX FOR Q1 2019...

THE MONSTER JOBS CONFIDENCE INDEX

www.monster.co.uk

In partnership with

https://www.monster.co.uk

02 Monster Jobs Confidence Index www.monster.co.uk

CONTENTS

EXECUTIVE SUMMARY PAGE 03

MONSTER JOBS CONFIDENCE INDEX – Q1 2019 PAGE 04

HOW HAVE THE INDICATORS CHANGED PAGE 05

BREAKDOWN OF SURVEY BASED INDICATORS PAGE 07

FOCUS ON: JOB QUALITY PAGE 11

INDEX INDICATORS AND WHAT THEY MEAN PAGE 12

METHODOLOGY PAGE 14

DISCLAIMERWhilst every effort has been made to ensure the accuracy of the material in this document, neither Centre for Economics and Business Research Ltd nor the report’s authors will be liable for any loss or damages incurred through the use of the report.

AUTHORSHIP AND ACKNOWLEDGEMENTSThis report has been produced by Monster and Cebr, an independent economics and business research consultancy established in 1992. The views expressed herein are those of the authors only and are based upon independent research by Cebr.

London, August 2019


EXECUTIVE SUMMARY

T he Monster Jobs Confidence Index is a new quarterly report produced by Monster and our partners at The Centre for Economics and

Business Research Ltd (Cebr). Using both traditional measures, such as statistics from the Office for National Statistics (ONS), and survey-based indicators our bespoke Index aims to measure how confident workers can and do feel about the labour market and understand what implications that has for workers, job seekers, employers and HR professionals.

This is the second iteration of the Index, however historical values have also been estimated, dating back to 2009. The Index can take values between 0% and 100%, where 100% suggests that workers feel extremely confident in their jobs. Similarly, Index scores which are close to 0% suggest that employees are not at all confident.

The key findings of this report are:

• The Monster Jobs Confidence Index stood at 62% in Q1 2019, down from 67% in Q4 2018. This is the lowest value of the Index since Q4 2015.

• Business confidence had the largest impact on the performance of the Index this quarter, as there was a considerable fall in the level of confidence businesses have compared to a year earlier.

• The biggest upwards force in Q1 2019 came from real wage growth. The annual rise in wages adjusted for inflation stood at 1.4% in Q1 2019, up from 0.1% in Q1 2018.

• Half of the survey respondents said that they feel confident or very confident about their jobs over the next six months, in terms of job security and the general employment situation.

• The Monster Jobs Confidence Index also incorporates how people feel about their job prospects and ability to progress over the next five years. In the survey for this report, 42% said they were confident or very confident.

• 12% of respondents said that the current political climate is making them feel more confident about their job and 35% said it is making them less confident.



1. MONSTER JOBS CONFIDENCE INDEX FOR Q1 2019

FIGURE 1- MONSTER JOBS CONFIDENCE INDEX

T he Monster Jobs Confidence Index stood at 62% in Q1 2019, down from 67% in Q4 2018. This is the lowest Index value since Q4 2015.

The average value of the Index over its entire ten year back history is 57%, meaning that confidence is still above average relative to the past decade.

Between 2013 and mid-2018, there had been a fairly steady rise in jobs confidence as unemployment fell and the labour market tightened. The strong performance of the Index until Q3 2018 was symptomatic of the prevailing sentiment in the labour market, as the unemployment level fell to the lowest levels since the 1970s.

However, in the latest readings of the Monster Jobs Confidence Index we see that jobs confidence has fallen. While the employment rate has remained high, other economic indicators have been worsening as the global economic slowdown and Brexit have been affecting businesses and workers.


Source: see methodology

“Economic indicators have been worsening as the global economic slowdown and Brexit have been affecting businesses and workers”

0%

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2009Q1

2009Q3

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2012Q1

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2014Q1

2014Q3

2015Q1

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2017Q1

2017Q3

2018Q1

2018Q3

2019Q1

62%

Average since 2009


2. HOW HAVE THE INDICATORS CHANGED?


Survey based indicators are also included in the Index, and the results of the survey are discussed in the next section.

As is shown in the graph on the next page, business confidence had the largest impact on the performance of the Index this quarter, as there was a considerable fall in the level of business confidence since this time last year. Regional employment inequality added further downwards pressure on the Index score in Q1. The biggest upwards force came from real wage growth.

An improvement in the unemployment rate in Q1, to just 3.8%, placed upwards pressure on the Monster Jobs Confidence Index in the latest reading. In Q1 2018, the unemployment rate was 0.4 percentage points higher than in Q1 2019, at 4.2%.

• Growth in job vacancies slowed to 3% in Q1 compared to 6% a year earlier, creating slight downward pressure on the Index. A high and rising number of vacancies is good for worker confidence because workers know that shouldthey need to, it is likely that they would be able to find a job elsewhere.

• Real wage growth (the annual rise in wages adjusted for inflation) stood at 1.4% in Q1 2019, up from 0.1% in Q1 2018. This significant improvement in the remuneration of workers is likely to have bolstered their confidence significantly at the beginning of the year.

• The latest share of workers who cannot predict the value of their next pay check stood at 8.3%, up from 7.9% a year earlier, which added negative pressure to the the Monster Jobs Confidence Index. On the other hand, the share of people who are in part-time work but want to be in full time work fell slightly the past year, to 11% from a value of 12% in Q1 2018.

• The disparity in the unemployment rate between UK regions worsened in Q1 2019, to 3 percentage points, up from 2.5 in the previous quarter and 1.9 in Q1 2018. The region with the highest unemployment rate was the North East, at 5.4%, while the South West had just 2.4% unemployment.

• The social mobility indicator, which measures social mobility by educational attainment and also access to higher level professional occupations improved over the past year, driven mainly by workers from less privileged backgrounds being more likely to make it into managerial positions.

• The number of apprenticeship starts also improved in the latest reading, with 84,800 people starting an apprenticeship in Q1 2019, compared to 84,000 in Q1 2018.

• Annual productivity growth was negative for the third quarter in a row in Q1 2019 at -0.2%, putting significant downward pressure on the Monster Jobs Confidence Index. Furthermore, the average deviation in pay for a given occupational level widened slightly over the past year.

• Consumer confidence and business confidence also feed into the Monster Jobs Confidence Index. Both have been falling over the past year; however, this was more pronounced in the case of business confidence, amid the turmoil of the last minute extension to the Brexit agreement deadline.

“Real wage growth (the annual rise in wages adjusted for inflation) stood at 1.4% in Q1 2019, up from 0.1% in Q1 2018. ”


www.monster.co.uk Monster Jobs Confidence Index 6

CHANGES TO INDEX COMPONENTS Q1 2019 Q1 2018

+ / - CHANGE IN %Unemployment

Job vacancies

Social mobility

Productivity

Pay gaps

Real wage growth

Involuntary part-time work

Number of apprenticeships

Consumer

Business

Regional employment

inequality

Job earnings security

+15

+9

-3

-41

-4

-32

+1

-6

+3

-24

-15

+16

CHANGES TO INDEX COMPONENTS Q1 2019 Q4 2018

+ / - CHANGE IN %Unemployment

Job vacancies

Social mobility

Productivity

Pay gaps

Real wage growth



Consumer

Business

Regional employment

inequality


+1

0

+13

-27

-3

-12

-11

+2

-14

0

-4

-5

YEAR ON YEAR CHANGES

QUARTER ON QUARTER CHANGES

As part of the methodology for calculating the Index, Cebr created an Indexed form of each of the indicators which have been outlined and used these to calculate the Monster Jobs Confidence Index. In the calculations, a value of 0% represents the lowest value in the back history of the Index, and a value of 100% is the highest historical value.

If an indicator has a negative relationship with jobs confidence, its negative equivalent is used. Table 1 summarises the changes in the Indexed versions of the non-survey indicators over the past year and Table 2 over the past quarter. Once the indicators are in Index form (between 0% and 100%), an increase is good for confidence, and a decrease


FIGURE 2: OVERALL, HOW CONFIDENT DO YOU FEEL ABOUT YOUR JOB LOOKING AHEAD TO THE NEXT SIX MONTHS?

Source: Monster Jobs Confidence Survey, Cebr analysis

Key: Very confident Confident Neither Unconfident Very unconfident Don’t know

3. BREAKDOWN OF SURVEY-BASED INDICATORS


One of the Index components examined via a bespoke survey sent to the Monster candidates is how confident people feel about job security, the

likelihood of losing their job, and the general employment situation in their industry over the next six months.

Overall, only half of respondents said that they feel confident or very confident about the next six months. One quarter said that they feel unconfident or very unconfident, with the rest saying that they don’t know.

3.1 Regional

The survey respondents in the UK who most commonly said that they are very confident or confident work in the South East, with 52% of respondents from this region selecting these options.

The region where the fewest people said that they are very confident or confident is Wales, where only 38% selected these options, and 34% said that they were unconfident or very unconfident.

Although the unemployment rate in Wales is a fairly strong 4.4% (only slightly higher than London’s 4.3%), earnings growth has been very slow over the past two decades, providing workers with one of the lowest rates of pay in the UK, with median weekly pay standing at £422 in 2018.

The remaining regions in the UK are relatively similar in the share of people showing some level of assurance, highlighting that the strong national labour market is proping up jobs confidence across much of the UK.



3.2 Qualification based confidence

The Index also incorporates how people feel about their job prospects and ability to progress over the next five years. In the latest survey, 42% said they were confident or very confident, up slightly from 38% in the Q4 2018 report.

Those who are most likely to say that they are confident or very confident are people who have received the highest levels of education. 54% of people with a postgraduate degree said that they were confident or very confident.

Survey respondents whose highest qualification is at GCSE level or equivalent have very low levels of confidence, with only 12% saying they feel very confident and 23% saying that they feel confident.

At present, workers with vocational qualifications or apprenticeships lack confidence in their future career prospects. 35% said that they feel unconfident or very unconfident about their future career prospects and ability to progress in a career over the coming five years.

With the future impacts of Brexit still rather uncertain, it is unsurprising that many workers are reporting feeling unconfident in regards to their own prospects.

“ 54% of people with a postgraduate degree said that they were confident or very confident.”

FIGURE 3: CONFIDENCE IN FUTURE CAREER PROSPECTS AND ABILITY TO PROGRESS IN A CAREER OVER THE COMING FIVE YEARS, BY QUALIFICATION LEVEL OF PEOPLE IN EMPLOYMENT





3.3 Diversity by business size

As part of the survey, respondents are also asked how diverse their business is. This is because if workers feel that their employer is fair to everyone, regardless of race, gender, or other personal characteristics, they will have more confidence that they will not be treated unfairly.

Overall, 69% of people said that their business is very diverse or fairly diverse, down slightly from the Q4 2018 report.

Workers at big companies are more likely to say that they perceive their firm to be very diverse, with 40% of respondents at companies with at least 250 people saying this.

However, people at micro enterprises (fewer than 10 workers) are the second most likely out of the four business sizes to say that they feel their company is very diverse, at 34%.

FIGURE 4: BUSINESS DIVERSITY BY BUSINESS SIZE


Diversity was also linked to worker confidence, as one in four (24%) of those who reported that their place of work was not that diverse or not diverse at all said that it made them feel less confident in their job.

Key: Very diverse Fairly diverse Not that diverse Not diverse at all Don’t know

“ 69% of people said that their business is very diverse or fairly diverse, down slightly from the Q4 2018 report”



3.4 Confidence by age

The Monster Jobs Confidence Index also measures how the political landscape is affecting workers’ confidence, which is particularly topical given the current economic uncertainty caused by Britain’s plans to exit the EU.

Overall, 12% said that the political landscape is making them feel more confident and 35% said it is making them less confident, the same as in the last report. However, responses have become more polarised, with more people reporting that they are either much more confident or much less confident than in Q4 2018. The share who said they are slightly more or slightly less confident fell.

When the results for this question are broken down by age of respondent, we find that the youngest and oldest age brackets are the people who feel that the political landscape is benefitting their confidence most. 13% of under 25s said it makes them much more confident in their job, while 12% of over 64s in employment said this.

People aged 35-44 were the most likely to say that the current political landscape is making them slightly less or

much less confident in their job, with 40% selecting these options.

“ 13% of under 25s said the political landscape makes them much more confident in their job”

FIGURE 5 – HOW THE POLITICAL LANDSCAPE IS AFFECTING JOB CONFIDENCE, BY AGE FOR PEOPLE IN EMPLOYMENT




4. FOCUS ON: JOB QUALITY

The most frequently quoted employment indicators measure the quantity of jobs (e.g. the employment rate), but ignore the quality of them. However, the Monster Jobs Confidence Index attempts to give a balanced view of the quantitative and qualitative sides of the labour market, including survey questions to understand how people feel about their work and measures such as job earnings security. In this section, the importance of job quality measures will be discussed in further detail.

Measuring job quality can be achieved by considering aspects that affect how people feel about their work, such as the precariousness of work (i.e. does it feel insecure), whether or not workers feel valued, how enjoyable it is, safety and flexibility.

Job quality is important because it can have significant consequences across the economy and society. Firstly, it can affect the overall heath and wellbeing of workers. Having poor quality work can make people feel demotivated and uncertain about their future. This not only has an impact on their performance at work but also on their personal lives. If a person depends on an unreliable job then it may result in difficulty accessing credit or securing a mortgage, and also possibly delayed marriage and family formation. Moreover, workers in poorly paid, stressful or otherwise precarious jobs are more likely to report health problems.

Providing poor quality jobs can also adversely affect businesses, for several reasons. There are managerial costs associated with poor quality of work. If work is irregular, meaning there could potentially be different employees every week, it can take up significant amounts of managerial time in order to make sure that employees know what is expected of them. Furthermore, if workers find their tasks unenjoyable, then the levels of innovation

and productivity are likely to be very weak. The incentives for workers to make a significant effort to complete the tasks required of them on time will be drastically lowered if workers perceive their jobs to be of poor quality. Workers in such jobs are also unlikely to feel that they should go above and beyond what is expected of them, therefore making any innovation in the workplace unlikely.

The negative consequences of having large numbers of poor quality jobs also have a wider societal impact. Precarious, low paid workers are likely to find themselves on state benefits, if their wages cannot cover the cost of living. Also, if the proportion of people in poor quality work increases, the level of income inequality in the UK is likely to worsen. In addition, increased numbers of stressed workers are more likely to suffer from mental or physical heath issues, putting a strain on the NHS.

Indicators of job quality included in the Monster Jobs Confidence Index present a mixed picture about the current situation in the UK. Although wages are growing at a decent pace, there are more workers who do not have job earnings security, and survey based indicators suggest that many people are worried about the future of their employment.

Looking to the future, it is important that measures of job quality are considered alongside headline indicators of employment in the UK such as the labour force participation rate and the unemployment rate. Although the share of people out of work in the UK is currently very low, this does not mean that everyone who has a job is satisfied with its quality. The government and employers should be kept aware of other measures of the labour market so as to make sure that policy does not overlook these matters



5. INDEX INDCATORS AND WHAT THEY MEAN

1.1 What does the Index show?The Monster Jobs Confidence Index is a new way of assessing the labour market. While most existing measures capture elements of the employment situation in the UK, no other indicator gives a holistic view of the amount of confidence workers can and do have in their jobs. Jobs confidence describes how secure workers feel in the place of work, in terms of job security and earnings stability, and also how confident workers are in their ability to progress in their career. The Index is made up of factors which will affect how much confidence

people have (e.g. unemployment and wage growth), as well as factors which directly measure different types of confidence.

1.2 Which indicators does this Index cover?The Monster Jobs Confidence Index is made up of 16 indicators which affect and capture the level of confidence workers have in their jobs each quarter of the year. The indicators are shown in the table below, with an explanation for why each of them is relevant to jobs confidence. Sources can be found within the methodology section of this report.

INDICATOR MEASURE IMPACT

LABOUR MARKET INDICATORS

Unemployment Share of those who want to work but do not have a job

In a scenario where unemployment increases and there are more people out of work in the UK, those with a job will worry that there is an increased probability that they could lose their job.

Job vacancies Growth in the total number of reported vacancies in the UK

With more vacancies, people can feel confident that if they did have to move job they could easily find another position.

Real wage growth Average annual increase in earnings, adjusted for inflation

When people are experiencing a faster pace of pay growth, they will feel more assured about their value in their place of work.


Share of employees whose take-home pay fluctuates from month-to-month

If workers cannot predict what their take-home pay will be each month, they will feel that their work is more unreliable, which will limit their confidence.


Share of workers in part-time work who want to be in full-time work

Workers will feel less confident if they want full-time work, but cannot find it and so have to take part-time work instead.

Regional employment inequality

Difference in the share of unemployed people between the regions with the highest and lowest unemployment rates

People will feel demotivated if they feel there are few jobs available at their skills level in the area they live in, which will impact confidence.

Social mobility Measures social mobility by access to higher professions and educational attainment

Higher levels of social mobility give people with disadvantaged backgrounds confidence that it is possible for them to reach the top positions in their workplace.




Number of all age apprenticeship programme starts in the UK

This measure is important since apprenticeships are a significant facilitator of social mobility.

Productivity Annual growth in output per hour of workers in the UK

When workers are producing more per hour, they will feel that they offer more value to their employer, making them feel more confident.

Pay gaps Average deviation in pay for a given occupational level

If employees feel that others at a similar occupational level are earning significantly more than them, it will cause a decrease in confidence.

MACROECONOMIC CONFIDENCE INDICATORS

Consumer confidence

How confident consumers are in the economy

When employees have confidence in the economy, they will be more confident in their job, because when the economy is growing well, more people tend to be employed.

Business confidence

How confident businesses feel When businesses are confident in the economy, workers at those businesses can feel more confident that their job is secure.

SURVEY-BASED INDICATORS

Future employment confidence

How workers feel about their job security looking ahead to the next six months

This question asks about the level of job confidence related to job security.

Career progression confidence

How confident workers are in their future career prospects and ability to progress their career over the next five years

This question asks about job confidence related to people’s ability to progress in their career.

Equality How diverse workers feel their business is

If workers feel that their employer is fair to everyone, regardless of race, gender, or other factors, they will have more confidence that they will not be treated unfairly looking forwards.

Political landscape

How political factors are affecting workers confidence in their job

Political uncertainty can affect business performance. If businesses are not performing well, it can affect how confident workers feel in their future at their workplace.



6. METHODOLOGY

Note: UK Data Service (UKDS) data takes longer to be published, and so is lagged by one period (i.e. Q3 data is used in the Q4 publication)


INDICATOR SOURCES

Unemployment ONS

Job vacancies ONS

Real wage growth ONS

Job earnings security Quarterly Labour Force Survey (UKDS)

Involuntary part-time work ONS

Regional employment inequality ONS

Social mobility Quarterly Labour Force Survey (UKDS) and Department for Education

Number of apprenticeships Department for Education

Productivity ONS

Pay gaps Quarterly Labour Force Survey (UKDS)

Consumer confidence Cebr/YouGov Heat

Business confidence BDO business trends

Future employment confidence Survey of Monster candidate base

Career progression confidence Survey of Monster candidate base

Equality Survey of Monster candidate base

Geopolitical landscape Survey of Monster candidate base

The sources for the Index are as follows:



Calculating the Index

The following indicators have a negative relationship with jobs confidence and so their negative equivalent was used in the Index so that an increase in all indicators is associated with an increase in confidence.

• Unemployment

• Job earnings security (share of employees whose take-home pay fluctuates from month-to-month)

• Involuntary part-time work

• Regional employment inequality

• Pay gaps

Cebr weighted the indicators in the Index by their impact on jobs confidence. The following seven indicators are weighted at 1.5 times the value of the other nine:

• Involuntary part-time work

• Social mobility

• Number of apprenticeships

• Consumer confidence

• Business confidence

• Future employment confidence

• Career progression confidence

Survey

The survey was written by Cebr and Monster, designed by Cebr using Survey Monkey and sent out to Monster’s candidate base. The survey was in the field between 28th February and 3rd March 2019. There were 8,985 responses. Survey-based elements had a weighting of zero before Q4 2018.


THE MONSTER JOBS CONFIDENCE INDEX

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THE MONSTER JOBS CONFIDENCE INDEX · 2019. 9. 24. · 1. MONSTER JOBS CONFIDENCE INDEX FOR Q1 2019...

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