After taking inflation into account, average pay including bonuses fell by 2.5 per cent in the year to April to June 2022, according to the latest Office for National Statistics’ latest labour market figures. Growth in employees’ average total pay (including bonuses) was 5.1 per cent and growth in regular pay (excluding bonuses) was 4.7 per cent in April to June 2022. Excluding bonuses, it fell by 3.0 per cent, the biggest fall since records began in 2001.
There were 1.274 million job vacancies on average across May to July 2022, down 20,000 on the previous quarter. Although this marked the first quarterly fall since June to August 2020, many sectors are still struggling to recruit.
British Chamber of Commerce (BCC) Head of People Policy, Jane Gratton, said:
“Today’s figures show little improvement for employers over the last quarter. Despite the small increase in employment levels, the number of job vacancies in the economy remains around the highest on record. Competition for skills and labour continues to drive up wage costs.”
“Skills and labour shortages have reached crisis point for many firms. The impact is being felt on their ability to meet customer demand and forcing some to turn away new business, because they simply do not have the human resource. This is restricting growth and business confidence. It’s a serious and urgent problem.
“On top of all of this, firms are now grappling with the highest inflation in almost 40 years; the largest spike in interest rates in three decades; ongoing supply chain disruption; and eye watering energy bills. There is a limit to how much additional cost business can absorb.”
Commented Louise Skittrall, founder of Swindon-based Robinson Grace HR Consultancy:
“With the cost of living the primary narrative right now and income being hit for six in real terms, pay and perks are key to companies retaining and attracting staff. Employers offering money-saving incentives such as working from home, free parking, electric charging points or subsidised staff meals, will be considerably more attractive to prospective employees seeking a more cost-effective job choice.
“What we are also seeing in the marketplace is a greater number of resignations being refused, counter offers on the increase and more focus placed on employee engagement and retention than ever before. We are even experiencing employers being reticent about tackling serious performance issues with existing employees due to the difficulty of recruiting a replacement. Issues that may have previously been considered gross misconduct are being viewed against more lenient criteria rather than moving to dismissal.”