The Competition and Markets Authority (CMA) asked its new Microeconomics Unit to examine trends in the UK labour market, focusing on the impact of competition and employer market power.

The aim was to provide insight and evidence to inform not only the CMA’s work but also wider government and policy thinking.

One of the key areas of research was labour market concentration which measures how many employers operate in a particular market — the fewer firms, the more concentrated it is, providing an indicator of labour market power. The CMA considered labour market concentration in the UK over a 20-year period finding that levels remained roughly constant, despite fluctuations over time.

The report shows that labour markets outside of London and the southeast are more concentrated, in that there are more employers per person in these two areas.

Blue-collar professions such as care workers and tradespeople have seen concentration in their sectors fall, while concentration has remained steady for white-collar workers, including managerial staff and IT professionals.

Looking at non-compete agreements, which stop employees from working at a competitor firm for a set amount of time after their employment ends, the research found that they impact around 30% of workers — increasing to over 40% in ICT and professional and scientific services.

The report finds that non-compete restrictions are prevalent across the UK economy, even in sectors where one would not expect firms to need to protect their intellectual property; for example, in retail, education, and food services around 20% of workers have non-compete clauses in their contracts.

Turning to hybrid working, the CMA said that, since the pandemic, the number of jobs offering remote and hybrid working has increased significantly and stabilised at around 20% of UK roles.

Chief Executive, Sarah Cardell, said: “This report adds to the robust body of evidence to support the benefits of well-functioning labour markets, widely recognised as an important driver of economic growth. Where labour markets work well, workers are able to access the right jobs for them, and firms can find the workers they need in the easiest, most efficient way.”

Visit BrAInbox today where you can find answers to questions like What is a restrictive covenant?

• Worst quarter for insolvencies since 2008
• Workers to pay to make a tribunal claim under new rules
• Fatal incident on recycling site sees company fined £2m
• Post Office chair sacked over governance issues