The latest data from the Association of Professional Staffing Companies (APSCo) has found average permanent salaries across the UK fell in January – reaching the lowest level since May 2019. This fall has occurred despite rising concerns around the cost-of-living crisis and widely reported unrest surrounding pay in the public sector.
The data – provided by Bullhorn – revealed that average permanent salaries continued to fall last month, down 3 per cent year-on-year in January and -5 per cent between November 2022 and January 2023.
While January showed an expected month-on-month increase in vacancy numbers following December’s seasonal dip, annual comparisons indicate that hiring has dropped since 2022’s initial spike. Year-on-year, permanent jobs fell 19 per cent while contract declined 18 per cent. However, with the beginning of 2022 seeing a significant spike in hiring activity, this fall isn’t indicative of a negative contraction. The data shows that recruitment levels between November 2022 and January 2023 remained relatively stable, with permanent jobs up 2 per cent and contract rising 3 per cent.
“While vacancy levels are following a pattern that we’d expect to see in January, the continued fall in average permanent salaries at a time when household budgets are being stretched is a concern,” said Ann Swain, Global CEO of APSCo. “We can’t ignore the fact that skills shortages are still an issue across the UK, despite the slowdown in activity that we’re seeing. The ONS January data, for example, reported that job levels were still at record highs despite slowing. Businesses might be acting with more caution given the uncertainty in the UK, but reducing salaries will have a negative impact long-term. As we’ve seen in previous times of economic uncertainty, how employers treat their staff and new recruits plays a significant role in attracting people when they are needed. Cutting back on salaries now will only exacerbate the skills shortages the UK is facing further.”
