Yorkshire and the Humber sees biggest growth in high-skilled jobs

NatWest analysts says the figures are a testament to the flexibility of the UK labour market.

A big pick-up in high skilled jobs helped Yorkshire and the Humber record the fastest employment growth in the UK last year, according to a report that will be a welcome boost to George Osborne’s “northern powerhouse” agenda.

Analysis of official figures by economists at NatWest found Yorkshire and the Humber enjoyed employment growth of 3.7% last year, almost twice the UK rate of 2%. That helped make up for some of the post-crisis slump in the region and meant there were now 5% more jobs there compared with the start of the global financial crash in 2008.

The strongest employment recovery over 2008 to 2015 was in London, followed by the east of England. Yorkshire and the Humber was in third place, NatWest said in its latest regional economic tracker. The bank’s senior economist Sebastian Burnside highlighted the promising nature of the jobs growth in the region.

“Behind this success is a 6.2% surge in high-skilled jobs over the last year, more than offsetting a small fall in low skilled employment. As the labour market changes and technology becomes ever more important it is reassuring to see the region continuing to generate high quality jobs and benefit from the higher wages they tend to attract, ” he said.

For the UK as a whole, there had been a 12.5% increase in highly skilled jobs such as doctors and nurses, lawyers, accountants, teachers, managers and directors since 2008, the report found.

Over the same period there had been a small drop in the number of people employed in low-skilled jobs, including retail assistants, cleaners and call centre staff.

Burnside said the pattern of employment growth reflected the rise of technology in workplaces.

“Greater use of technology is improving the efficiency of many retail operations, the replacement of check-out staff with automated tills is one of the most visible ways this is happening and has contributed to the number of people employed as cashiers falling by over 70, 000 since 2008, ” he said.

The chancellor will be cheered by signs in this report that some of those lost low-skilled jobs are being replaced with higher skilled roles, particularly in parts of what he has dubbed a northern powerhouse.

A report last week criticised the government’s northern plans for placing too little focus on improving the performance of individual cities. The Centre for Cities thinktank said Osborne’s push to bridge the economic gap between the wealthier south and the poorer north was too heavily focused on intercity transport links.

While ministers and local authorities will welcome this new report on high-skilled jobs growth in region, such analyses reveal little about how individuals fare when their roles are replaced by technology. As such, the NatWest figures are unlikely to dim calls from trade unions for better training and adult education to help workers adjust to changing employer needs.

But Burnside said the growth in skilled jobs still provided some encouragement that in the labour market battle between man and machine, the humans could win out as demand in new areas of the economy creates new opportunities.

“This longer view is encouraging... It’s another example of just how incredibly flexible the UK’s labour market is, ” he said.

NatWest said different parts of the UK had enjoyed varied success in creating high-skilled jobs. For example, high-skilled London jobs were up 19.2% since 2008, and in the north west they had grown 11.7%. The north east of England, Wales, Scotland and Northern Ireland were the only regions not to enjoy double-digit growth.

Despite the apparent overall UK pick-up in higher skilled jobs, pay growth has remained relatively weak. The Bank of England has suggested several explanations for lacklustre earnings growth, including a drop in average hours worked, the fact much of the employment growth has been in industries that typically pay less and the possibility that low inflation means employers feel less obliged to offer substantial pay rises.

More recently, business surveys have suggested companies are nervous about hiring new workers and raising pay as they adjust to new costs from the “national living wage” introduced in April and as they await the outcome of this month’s EU referendum.

The latest official labour market figures showed that in the three months to March earnings, excluding bonuses, grew 2.1% on a year earlier, down from 2.2% in the three months to February.