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UK - Advertised salaries perk up after stagnant quarter

02 March 2015

The average advertised salary grew in January, ending three months of consecutive stagnation, according to the latest UK Job Market Report from Adzuna.co.uk.

After flatlining in Q4 2014, the average advertised salary has shown signs of improvement in January with a 0.1% month-on-month increase to £34,589. This small monthly uptick is backed up by a healthy 8.1% year-on-year improvement. The average advertised pay packet has contained an extra £2,477 compared to January 2014, according to real wage data adjusted for CPI inflation.

However the expected January jobs boom did not materialise. In fact, there was actually a minor reduction in advertised vacancies, falling 1.6% month-on-month to 952,859 in January. In previous years, January has seen an increase, (0.9% in 2013, 3.1% in 2014), making the downturn at the opening of 2015 even more surprising.

This decrease in the number of advertised job vacancies has driven up the average number of jobseekers per vacancy for the first time in a year. There were 0.9 jobseekers for every advertised position in the UK in January, up from 0.85 in December. This is the largest such increase since January 2013. However, the number of benefit claimants in January 2015 has halved (down 53%) from where it stood two years ago, falling from 1,581,838 to just 852,934 according to the latest labour market statistics from the ONS.

According to Andrew Hunter, co-founder of Adzuna,: “Normally we would expect a January jobs boom to kick off the New Year, but there are actually fewer advertised vacancies than we saw in December 2014. But it’s not all bad news – strong performance across 2014 has reduced the jobs deficit, leaving us firmly anchored with a quarter more vacancies than we had at the beginning of last year. Likewise, a slight increase in the ratio of jobseekers to available vacancies is still a far cry from the previous state of the labour market. You only have to look at reductions in the number of out-of-work benefit claimants which have halved from January 2013 to see that.

“We’re continuing to see real wage growth off the back of low inflation. It’s not just a technicality, either – after three months of wage growth stagnation across Q4 2014, we’re seeing the average advertised pay packet start to rise in the New Year. For all these encouraging signs for 2015, this is just the opening salvo. There are still more people looking for paid employment, but many lack the skills to gain entry into the available professions. The past month has seen significant promises on apprenticeships from a range of political parties – let’s hope these commitments to closing the skills gap are honoured after the general election.”]

 The North West of England has fallen back from the head of the pack in terms of average advertised salary increases. The North East (14.0%), Yorkshire and The Humber (13.5%), and Eastern England (12.4%) are now vying for pole position as salary increases in the North West (9.2%), previously among the fastest growing, slowed to just above the UK average. Wales (1.7%) and Scotland (2.0%) are both lagging behind.

Table 2: Biggest improvers – UK regions by average salary

Table 2: Biggest improvers – UK regions by average salary

Adzuna’s figures show that there are currently 16,107 apprenticeships in the UK, with engineering being the largest provider of opportunities. However, these schemes are not concentrated in the areas which are struggling the most. London and the South East together hold 28% of all apprenticeships, despite comparatively low competition for jobs and below-average salary growth in both areas. The combination of high wage growth and high competition – a primarily Northern phenomenon – is indicative of employers attempting to attract skilled candidates from other regions.

Andrew Hunter comments: “People want to work, but many lack the skills to match the available jobs in their areas. This is particularly true in the North, and yet apprenticeships have gravitated towards the comparatively successful South. It’s a bit of a chicken and egg situation: which came first, the apprenticeships or the successful companies willing to train up skilled workers?

Though Administration (20.5%) and Customer Services (17.4%) maintained their lead in terms of year-on-year salary improvements, perhaps more significant is the return of Trade & Construction Jobs (12.1%) to the top-five leaderboard. The average advertised salary in this industry in the UK was £39,156 in January, up from £34,936 in January 2014.

Table 3: Biggest improvers – job sectors by average salary

Table 3: Biggest improvers – job sectors by average salary

Only the Energy Oil & Gas (-3.9%) and Creative & Design (-0.1%) sectors experienced wage decreases in January compared to the same month last year. Average advertised salaries in these sectors were £45,494 and £30,313 respectively.

Table 4: Worst improvers – job sectors by average salaries

Table 4: Worst improvers – job sectors by average salaries

Andrew Hunter explains: “The Energy, Oil & Gas crisis has deepened in January as the price of crude oil remains low and doesn’t seem set to rise any time soon. Creative and Design jobs are a new entrant onto the list of most stagnant job areas. It’s a surprise, given statistics from the Department for Culture, Media & Sport which show a burgeoning sector growing at three times the rate of the wider UK economy. The sector might be growing, but salaries are struggling to keep up – as is often the case with careers in the arts, these positions are simply oversubscribed. Nevertheless, this slight slip in salaries is hardly cause for alarm in the face of booming growth for the sector as a whole.”