Advertised salaries hit highest level in almost two years

• Average advertised salaries (£33,369) are highest since April 2016 (£33,462)
• Vacancy levels flatline around 1.1 million mark – despite rising 1.1% year-on-year
• Jobseeker per vacancy level is the highest it has been since May 2017 – residing at 0.42 and reflecting official Government trends
• Retail salaries increase despite high street struggles – average advertised wages in the sector are 19% higher than January 2017
• Construction sector salaries in decline, notwithstanding sector’s return to growth – down 5.9% from a year ago

Average UK advertised salaries have hit their highest level in 21 months, according to Adzuna.co.uk.

The 3.6% improvement over the past six months meant the average advertised wage in January was £33,369 – the last time it was higher was April 2016 (£33,462).

This sustained growth in average salaries is a positive sign for the employment market as jobseekers begin to see incremental improvements to salary packages in real terms. From a regional perspective, average advertised salaries have increased annually in every area across the UK – the first time this has happened since Adzuna began monitoring on this basis since the summer of 2015. 

Advertised salaries are up 4.6% in the capital, with Northern Ireland (14.1%) and Wales (6.3%) other notable performers on an annual basis, suggesting the worst of the pay squeeze has passed.

Despite the quality of new roles improving – judging by the above salary improvements – the quantity of opportunities has failed to keep pace. Total advertised vacancies continue to flatline, falling 10.6% over the last six months. There are currently 1,100,710 new openings available, marginally (0.1%) higher than December’s level.

According to Adzuna’s jobs data, competition in terms of jobseeker per vacancy currently sits at 0.42; the highest level since May 2017, when the ratio stood at 0.43. These figures tally with the latest ONS Labour Market stats, which show that the number of unemployed people spiked between Q3 and Q4 2017.

Doug Monro, co-founder of Adzuna, explains: “As salary improvements continue, we have faith that the growing momentum behind average salaries is here to stay. A 21 month-high is not to be sniffed at, and while jobseekers now face increased competition for each position, the rewards are there once they land a role. Without wishing to tempt fate, it does look like the worst of the pay squeeze seems to have passed. Those currently in employment will hope that having continued to covet new staff with increased pay packages, focus soon switches to retention as we head into review season.” 

Table 1: Total advertised vacancies and salaries

Retail jobs hold the fort on the high street  

With British consumers having been hit by salary stagnation, inflationary pressure and soaring living costs over the past year – not to mention the inexorable rise of online giants such as Amazon – it is perhaps unsurprising that high street sales have dwindled and in turn led to the closure of a number of stores for large retailers such as Marks and Spencer, with others such as Toys R Us looking set to bite the dust altogether.  

But despite this gloomy backdrop, Adzuna data shows that retail jobs are among the top performers in terms of average salary over the past year, with typical advertised wages increasing by 19% from January 2017. Average salaries within the retail sector now stand at £27,398, as employers are increasingly desperate to attract and retain the best talent pool.  

Doug Monro, co-founder of Adzuna, explains: “Mark Twain once said reports of his death had been greatly exaggerated and the British high street could be excused for feeling the same. While the footfall and sales figures might not be what they once were, employers are obviously feeling flush enough to offer salaries that rival comparable sectors. Despite the pay squeeze, rising costs of living and inflationary pressures, UK consumers still love a bargain and these can still be found on the high street as it fights back against online offerings.”  

Table 2: Best-performing job sectors in the UK – annual salaries

Construction sector stuck between a rock and a hard place 

Construction workers are among the hardest hit in terms of average advertised salaries, according to Adzuna’s salary sector breakdown. The average advertised salary within the construction sector has fallen 5.9% from January 2017; currently sitting at £37,543. Despite this, the total number of advertised vacancies within this sector is at 65,499, which suggests it could be the sheer volume of openings weakening the overall average.

In fact for all the talk of infrastructure spending and billion-pound projects, the UK actually spends the lowest proportion of national income on investment of any developed economy, according to the Office of National Statistics. Despite this, in the last quarter of 2017, economic growth data by IHS Markit/CIPS PMI showed that the UK construction sector returned to growth.

However, the effects of a booming construction sector are yet to trickle down in real terms to salary packages. Falling wages have come as a surprise given the sector’s emergence from a technical recession in October 2017. With the government’s help-to-buy equity loan schemes and flurry of activity surrounded new house-building projects, a return to growth for construction sector salaries should also potentially be on the cards.

Doug Monro, co-founder of Adzuna, explains: “It’s disappointing to see average salaries within the construction sector declining, given the supply shortage, particularly for first-time buyers struggling with affordability.

“Despite a number of advertised vacancies on offer, confidence and optimism about the future of the construction sector fell to its lowest level for almost five years in the last quarter of 2017. With Brexit negotiations ongoing and the countdown in full swing, we hope to see an emphasis on the construction sector and a strategy set in place that aims to maintain free movement of labour in order to support growth and prosperity of the industry.”