ONS found there has been a significant increase in wages over the past year.
But will this keep pace with rising inflation?
Find out what employers need to do to retain employees.
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Hot on the heels of the US seeing another record month of resignations, the UK also saw a new high in job vacancies – 1.3 million – for February to April 2022.
According to figures from the Office of National Statistics (ONS), this is up 33,700 from the previous quarter, and 499,000 than pre-pandemic figures. This comes as over one million employees have switched jobs this quarter – clearly the ‘Great Resignation’ is alive and well in the UK.
In other good news, this means vacancy growth has increased 2.7% since February to April 2021, and the number of vacancies now exceed the number of people who are unemployed in the UK.
The unemployment rate fell to 3.7% in the three months to March 2022 – this is the lowest level since 1974. The UK’s employment rate was 75.7%, which is 0.1% higher than the previous quarter, but 0.9% lower than pre-COVID-19 in February 2020.
There were 29.5 million pay rolled employees in the UK – this 4.2% (1.2 million) higher than April 2021, and 0.2% (121,000) higher than March 2022.
Reasons for optimism?
The ONS sees this all this data as sign of recovery in the UK job market – particularly because salaries have increased 5.6% since April 2021 and 11.7% since February 2020. The median monthly salary in the UK is now £2,076.
After taking inflation into account, average pay including bonuses rose 1.4% in the year to January to March 2022, while excluding bonuses it fell 1.2%.
— Office for National Statistics (ONS) (@ONS) May 17, 2022
However, it is important to remember that this rise in pay occurs in the context of extremely high inflation – it currently stands at 7%, but is expected to rise again in June 2022.
The Resolution Foundation senior economist Hannah Slaughter commented: “The UK labor market continues to tighten, with the number of unemployed people having fallen below the number of job vacancies for the first time ever.
“People are taking advantage of these conditions to move jobs, and employers are responding by paying bonuses to hire or retain key staff.
“But for the vast majority of the workforce, the labor market may feel far less hot. There is little sign of wider pay pressures building and real wages are getting squeezed even tighter.
“With inflation having shot up in recent months, the scale of Britain’s wage squeeze is going to get far worse.”
Employers, it is time to prepare to further support your employees with their finances amid the current inflation crisis. That could be more wage hikes, it could be performance-related bonuses, or it could be more support to help them better manage their money.
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