The UK labour market is in a strong position compared to the rest of Europe and is improving at a quicker rate since the financial crisis, according to a new index developed by Glassdoor Economic Research. The Glassdoor Labour Market Index (GLMI) reveals that labour market conditions (employment, jobs and wages, for example) are improving in the European Union as a whole, however there is considerable diversity among European countries. The GLMI has been created to help employers and job seekers alike understand the larger employment picture across Europe.
Developed in cooperation with Llewellyn Consulting, Glassdoor’s new index ranks 18 countries across Europe plus the United States. The GLMI assigns a simple metric to each country, showcasing which countries have the strongest and weakest labour markets and how they have changed over time. It provides a snapshot of how much a labour market is accelerating or slowing down compared to past growth since 2007 along with providing insight into how much it’s growing in recent times. The factors considered in the GLMI are unemployment rates, the number of job openings, wage levels, and more.
Glassdoor Chief Economist, Dr. Andrew Chamberlain said: “Employers and job seekers both need good information about economic conditions before deciding where to hire and invest, and where to live and work. The Glassdoor Labour Market Index shows that the momentum in Europe is currently with Greece, Portugal and Spain. These are the three countries whose labour markets are improving the most when compared with performance since before the global financial crisis. However all three still have a very long way to go before they come close to returning to the labour market conditions enjoyed before the recession. The UK, however, is in a very strong position in that its labour market is getting better and that improvement has actually been accelerating.”
UK Labour Market Shows Solid Acceleration
To provide an insight into which labour markets are best to find a job or hire talent today, the index looks at the labour market growth for specific countries over the previous nine years compared to each of those countries’ historical average. The Index reveals that the UK is growing somewhat faster than in the past, yet not to the extent that some countries are. For example, Greece, Portugal and Spain are progressing noticeably faster than they have in the past. To a certain extent, this is to be expected since they are weaker economies overall and have significant catching up to do. The UK labour market is already strong (see Figure 3 below). By contrast, labour market momentum in Switzerland and Norway is significantly below each country’s historical average. Similar to the UK, these markets were already quite strong and therefore growth is less apparent. A job seeker in the UK today can expect a strong economy with continued, solid growth. Though Greece, Spain and Portugal labour markets are improving, it will be some time before their economies catch up with strong markets in countries like Switzerland and Norway.
The following chart shows a country-by-country snapshot of how each labour market is improving or deteriorating relative to its past. An index number above zero means labour market conditions are improving faster than the country’s average improvement in the past. By contrast, a negative index number means that labour market conditions are not improving as well as we would expect based on the previous average. The higher the index number, the more conditions in the job market are exceeding past performance.
Italy, Denmark and UK speeding up
In addition, the GLMI also gives a more up-to-date picture by revealing the changes to unemployment, jobs and wages over the past six months. In the UK, labour market improvement has actually accelerated, furthering the sense of growth and prosperity in the country. Factors affecting the labour market have also improved in the past six months in Italy, Denmark and Greece. In Portugal, conditions are still improving but less quickly than before. Switzerland is in a particularly unfortunate situation: six months ago its labour market conditions were worsening, and now they are worsening even faster. However, overall Switzerland’s labour market is generally strong (see Figure 3 below) so continued rapid growth is difficult to maintain.
The following chart tracks the same factors as Figure 1, yet over a different timescale, namely the latter half of 2015, as opposed to since 2007:
Current Conditions: UK Among Strongest Labour Markets
The previous charts looked at improvement or deterioration in labour market growth over time (dynamic view), but it is also useful to consider a current snapshot (static view) comparing factors such as unemployment and wages. There is still a lot of variation between job markets and there is a clear north/south divide. Switzerland, Denmark, Norway and the UK are in a strong position, whereas Greece, Spain and Italy have the weakest labour markets. If improvements in their economies continue at the same rate revealed by the GLMI, these latter countries could eventually catch up with the stronger markets. However, this assumes that all other things would remain equal, which is unlikely to be the case in the real world. For now, job seekers in southern Europe have a difficult time finding employment and securing good wages.
