Wages continue to outpace inflation
By Cat Hage | 14th November 2023
The ONS issued its November labour market report today and stated that from August to October 2023, the estimated number of vacancies in the UK fell by 58,000 in the quarter to 957,000. Vacancies fell for the 16th consecutive period, across 16 of the 18 industry sectors.
UK annual growth in regular pay was 7.7% from July to September 2023, slightly down on the previous periods, but is still among the highest annual growth rates since comparable records began in 2001.
Annual growth in employees' average total pay was 7.9%. This total annual growth rate is affected by the Civil Service one-off payments made in July and August 2023. In real terms (adjusted for inflation using the Consumer Prices Index including owner occupier's housing costs (CPIH)), annual growth for total pay rose on the year by 1.4%, and regular pay rose on the year by 1.3%.
There were 229,000 working days lost because of labour disputes across the UK in September 2023. Most of the strikes were in the health and social work and education sectors.
The UK payrolled employee growth for September 2023 compared with August 2023 has been revised from a decrease of 11,000 reported in the last bulletin to an increase of 32,000.
The estimate of payrolled employees in the UK for October 2023 increased by 33,000 on the revised September 2023 figure, to 30.2 million.
Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said: "There are clear signs of a cooling off in the labour market, with vacancies continuing to trend downwards and unemployment remaining static.
"But employers are still struggling, as wages continue to outpace inflation and the impact of 14 consecutive interest rate rises starts to bite. It is also a concern that the flow of inactive workers back into employment appears to have stalled.
"A thriving economy needs a skilled and flexible workforce in every region and sector. That's why the UK Government and employers need to invest now to address the skills shortages that are holding everyone back.
"The Chancellor must use the Autumn Statement to help businesses boost their investment in high-quality training. It is also essential that everyone who wants to work can access the healthcare and support they need to thrive in employment."
Michael Stull, director at ManpowerGroup UK, said: "As cost-of-living pressures combine with significant talent gaps, wage growth at 7.7% in the quarter to September 2023 remains high and continues to be a keen area of focus for employers and candidates alike. Our advice to organisations who are facing this perfect storm of high inflation, skills shortages and economic stagnation, is to think carefully before making pay increases. While uncertainty remains so prevalent, our recommendation is to look instead at ways to retain existing staff by bolstering benefits packages and by offering opportunities to upskill and reskill, especially across the areas where talent shortages prevail.
"Businesses must be prepared to make braver long-term decisions in areas such as their values and overall purpose. There is an opportunity to be seized by those who are prepared to adapt and do things differently - both in terms of employee retention and customer and client loyalty."
"Recessionary headwinds may be getting stronger, but if we can address underlying economic fundamentals like talent and skills shortages in new ways and foster a stronger culture of innovation, investment and productivity, the UK's future will be all the stronger for it."
Yesterday (November 13) in Gloucestershire, representatives of organisations from across the county got together for an employment, health, wellbeing and inequalities summit.
Nearly 100 people were at the event at Gloucester Rugby, pledging to start working even more closely together in helping people to work, Punchline-Gloucester.com reported.
Copyright 2023 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.