Salaries have stagnated as the hiring landscape remains uncertain, but firms risk losing their appeal to employees as the cost-of-living continues to rise. That’s according to the latest statistics from the Association of Professional Staffing Companies (APSCo) – the trade body for the professional recruitment sector.
The data – provided by the global leader in software for the staffing industry, Bullhorn – shows that average salaries for professional roles in the UK did not improve month-on-month in May. While this figure increased by 1% year-on-year, this minimal growth does not reflect increasing inflation figures and the growing costs-of-living.
The statistics also paint a continued picture of a slowdown in the recruitment market, despite a slight monthly increase between April and May. While permanent and contract vacancies are up 9% and 6%, respectively, month-on-month, this doesn’t entirely make up for the falls noted in April, when vacancies dropped 16% for permanent and 13% for contract month-on-month.
The annual comparisons further evidence the slowing of the recruitment market, with vacancies falling 28% and 30%, respectively, for permanent and contract between May 2022 and May 2023. Despite this slowdown, APSCo has warned that the tight labour market and continued skills shortages across a number of professions are cause for concern, particularly in light of stagnating pay packages.
Ann Swain, Global CEO of APSCo said, “While hiring is dropping across the UK’s professional sectors, on-going skills shortages are still prevalent. In fact, the latest data from the Office for National Statistics (ONS) shows that the proportion of the workforce that have been out of work for a year or more and are, essentially inactive, has increased. This will only serve to reduce available talent pools for employers that are already struggling to find the skills they need.
“Although the ONS does also show an uptick in overall pay across all UK wages, the fact that our data is showing a stagnation of pay increases in professional roles points to two potential trends. First, employers are struggling to justify pay inflation having already increased remuneration significantly over the course of the last year and secondly, candidates are recognising the power they can command in the current climate and are holding out for more pay.
“We are clearly facing a labour market like no other. Access to flexible and global resources is going to be key if the UK’s employers are to attract the skilled professionals they need without breaking the bank. Solving today’s employment challenge won’t be solved overnight, but we need the Government to take real action on the skills agenda, including immigration reforms, and soon.”