Salaries fall despite Cost-of-Living crisis
Data suggests UK businesses feeling the pinch, but firms’ competitive standing could be at risk
The latest data from the Association of Professional Staffing Companies (APSCo) – the trade body for the professional recruitment sector – suggests employers are feeling the pinch with salaries falling across the professional labour market. However, firms risk being on the back foot once the recovery begins if they don’t invest in talent now.
The data – provided by the global leader in software for the staffing industry, Bullhorn – revealed an expected seasonal decline in hiring towards the end of last year. Permanent jobs dropped 15 per cent and contract vacancies fell 22 per cent between December 2021 and December 2022.
Although this decline is to be expected, it is the fall in remuneration which paints a more concerning picture at a time when skills shortages are rife. According to APSCo’s data, average permanent salaries also fell in December 2022, down 6 per cent when compared to the same period in 2021.
While this drop in salaries is indicative of the economic uncertainty the country has faced, with staff across the UK facing a cost of living crisis this fall will be cause for concern for households. According to APSCo, businesses need to look at wider remuneration packages to attract and retain the highly skilled resources they need both now, and once the UK economy recovers.
“December has long been a quieter month for recruitment activity,” says Ann Swain, Global CEO of APSCo. “However, while there has certainly been a decline in hiring noted, the fall in average permanent salaries paints a more concerning picture. There is still significant pressure on the labour market, particularly for highly skilled professionals. Businesses and recruiters alike shouldn’t fall into the trap of believing the labour market has swung back in favour of the employer just yet. The power is still very much in the hands of the candidates, and without appropriate remuneration packages in place, access to crucial resources will become increasingly limited for firms.”