Salary and vacancy growth struggling to match 2015 figures

• Annual salary growth at joint lowest level since 2015 – down 3.8% year-on-year
• UK vacancies reach four-month high – 1,156,701 openings currently listed   
• Average graduate salaries up 2% year-on-year despite internships and apprenticeships becoming more crucial - typical post-university salaries currently stand at £24,429

Sector highlights:

• Social work jobs face an annual salary decrease of more than 12% following recent staff shortages and poor incentives
• Logistic and Warehouse jobs could be extinct in 10 years following the rise of AI and recent warehouse closures
• Property jobs continue to soar as annual salaries rise by over 3% despite the general election posing a possible threat to the property market

Year-on-year percentage increases for both salaries and vacancies are at their joint lowest since 2015, according to the latest UK Job Market Report from Adzuna.co.uk

As higher inflation has impacted the UK economy, the effects are trickling down into the labour market and taking their toll on wage growth. UK salaries have struggled to match up to their September 2014 high of £34,695. March 2017’s figures are down 3.8% annually to currently reside at £32,525.

Despite the strain on year-on-year growth, UK salaries are continuing to increase month-on-month and have steadily increased over the past four months. In similar fashion, UK vacancies have reached a four-month high, as total figures for April 2017 are currently at 1,156,701.

According to recent forecasts in the International Monetary Fund’s Economic World Outlook, global growth this year is likely to reach up to 3.5%, above its 3.1% prediction in 2016. Therefore, vacancy and salary figures are currently performing at an expected level.

A separate survey of 600 firms by the Recruitment and Employment Confederation (REC) suggests more than two in five employers who had difficulty recruiting candidates said they had increased the salary on offer. This suggests a positive outlook for salary and vacancy growth as the battle between attracting and retaining a strong, widespread talent pool while simultaneously keeping current employees happy and satisfied reaches boiling point.  

With inflation and wage growth at loggerheads, competition for jobs has fallen to 0.45 people per vacancy. This highlights the variety and opportunities available for job seekers that continue to crop up in the midst of political confusion.

Table 1: Total advertised vacancies and UK salary

Doug Monro, co-founder of Adzuna, explains: “With inflation on the rise and wage growth stalling, workers are having to make their money stretch further. The minor monthly increases in salary and vacancies are not a lot to shout about but they may now be consistent and reliable enough to bring some confidence back into the labour market. There is no harm in remaining optimistic as recent reports have already shown that employers are beginning to up pay promises to tempt in top talent – good news for job hunters.”

“The recent Confederation of British Industry report mentioned that the UK’s competitive advantage depends on innovation and technology – and there is no doubt that this holds true as we struggle to overtake 2015 salary and vacancy levels.”

Graduates awarded a first class honours in pay packages

According to Adzuna data, graduate salaries are up by 2% year-on-year to currently stand at £24,429, with 16,743 total vacancies. Employers such as Aldi are offering lucrative pay packages to attract the best graduates which requires them to think outside of the box and secure the best possible opportunities given the number of permanent entry-level graduate jobs has fallen by 5%, according to the IPPR think tank.

Not only has wage growth played a big role in the labour market, but internships remain a dark horse. They are an invaluable platform for graduates looking to transition from lecture theatres to the workplace. Following the report from the IPPR, estimates show that the number of internships has risen by as much as 50% since 2010, as the number of advertised graduate-entry jobs has sharply declined. The perception of internships has shifted from being an added extra to a must-have on a CV, particularly for graduates.

Doug Monro, co-founder of Adzuna, comments: “It’s good to see graduates swimming against the tide in terms of wage growth. Today’s graduates are tomorrow’s CEOs, so it is only right that the newly qualified get a step up into the job market. With red brick universities awarding many graduates top degree classifications, competition is fiercer than ever which calls for graduates to seek internships so they stand out from the pack.”  

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

Sector highlights

Social Work: The social work sector has faced a tough time in the midst of wider NHS problems and has experienced particular difficulties around staffing, funding and an ageing population. Data gathered by the charity Skills for Care shows that in 2015-16, nearly 900 social work employees left their jobs each day. The reputation of social work should not completely be tarnished by these disappointing results, as this field proves itself to be a highly rewarding and fulfilling role, but there is plenty of work to be done. According to Adzuna data, social workers face annual salary decreases of more than 12%. Funding is an issue, but without some sort of financial incentive problems are only likely to worsen.

Logistics & Warehousing: Technology is the key to a solid post-Brexit economy and will likely take UK productivity to new heights but it could impact opportunities and salaries in some sectors - logistic and warehouse jobs have already been impacted and could be extinct in 10 years. The rise of artificial intelligence means that robots and automated software may reclaim low-skilled jobs in the near future starting from the ground up. As a result, logistics & warehouse jobs have been listed as one of the worst performers according to Adzuna data, as average salaries have experienced a year-on-year decrease of 13.3%, falling to £27,237.

Property: Despite the looming general election and potential threat to the property market, jobs in the sector remain attractive as annual salaries rise by over 3%.

In terms of the most searched-for jobs on the Adzuna site, factory skilled work such as packer roles are building momentum. This suggests that a fragment of the labour market demands low-skilled, flexible work that is often temporary to accommodate for changing circumstances and ultimately generate higher disposable incomes.

Doug Monro, co-founder of Adzuna, comments: “The social care system has been fraught with hardships that go beyond the ebb and flow of the labour market. Falling advertised salaries have only added further insult to injury. This could be the wake-up call needed to reboot the system as social workers deserve better compensation. An already stretched social care workforce is crying out for pay that reflects their commitment to helping Britain’s most vulnerable members of society.”

“Despite being in the early stages, artificial intelligence will undoubtedly change the shape of the jobs market. Far from a negative force, automation could potentially inspire the British workforce to reskill as employees seek new training and qualifications to keep up with new technologies and innovations.”