Annual salary increases hit post-recession high

Highlights

• New record for available vacancies, with 949,788 advertised positions across UK
• Advertised vacancies exceed number of jobseekers for second consecutive month
• Customer Service jobs see the largest twelve-month increase in average advertised salary (16.5%), followed by Manufacturing (14.5%) and Trade & Construction Jobs (10.4%)
• Only year-on-year advertised salary drops are in Hospitality & Catering (-2.11%) and Energy Oil & Gas (-0.55%)
• Every region of the UK sees advertised salaries increase across the year
• Cambridge comes out on top as best place to find a job in 2014

Average advertised salaries experienced the highest annual increase since the recession in November according to the latest UK Job Market Report from Adzuna.co.uk.

The average advertised salary in November was £34,549, a 5.8% increase compared to £32,651 a year ago. These salary increases come as the Consumer Prices Index (CPI) grew by just 1% in the year to November 2014, down from 1.3% in October. This means that average annual salary increases continue to outpace CPI inflation as a trend towards real wage growth continues for the fourth month in a row.

The number of jobseekers per vacancy reached a record post-recession low of 0.89 in November 2014, making it the second consecutive month since the financial crisis in which there have been more advertised vacancies than jobseekers. This is also the tenth consecutive month in which competition for jobs has fallen.

The number of advertised vacancies reached 949,788 across the UK – the largest number of advertised jobs since the recession, overtaking the previous record of 936,596 vacancies in October 2014. There was a 23.6% year-on-year increase in available jobs: just 768,289 vacancies were advertised in the equivalent month last year.

Table 1:

“The job market has seen significant revival over the past year. The most recent figures provide a solid base for optimism as we head into 2015. But it’s important not to rest on our laurels. The fact that the number of advertised job vacancies has continued to blossom over and above the number of jobseekers in November is definitely a sign that the labour market has cultivated momentum over the course of 2014, but this peak in advertised vacancies at the close of the year may owe as much to seasonal work as it does to the resurgent core of the jobs market.

“Some uptick in advertised vacancies during the lead-up to the festive period was expected. However, seasonal labour does not account for year-on-year record annual growth in average advertised salaries. More vacancies and higher wages have come at the same time as the cost of living crisis starts to ease, leaving more people with more money in the New Year – injecting a feel-good factor into a traditionally glum time of year.”

Customer Service Jobs see largest increase in advertised salary

The average advertised salary for customer service workers grew 16.5% over the year to November to reach £21,353 – one of the fastest rates of growth this year.

Andrew Hunter, co-founder of Adzuna, said: "The customer services sector has evolved in response to the changing landscape of business engagement. No company worth their salt can afford to ignore the potential of social media to influence their business propsects. Proactive and wide-ranging customer care is now an essential part of any sensible business model. As such, workers in the Customer Services sector are moving into the spotlight – this increase in their average salary reflects companies’ desire to attract the best talent for this crucial sector.”

Table 2: Biggest improvers – job sectors by average salary

Salaries increase for jobs in Manufacturing and Trade & Construction

Manufacturing jobs experienced a yearly salary increase to £30,678 in November, representing a 14.5% yearly increase – the second largest annual salary growth by sector. This increase was followed closely by a 10.4% annual salary boost in Trade & Construction, with an average advertised salary of £38,704.

Andrew Hunter, co-founder of Adzuna, comments: “The advertised salary increase in these sectors – driven by the Northern powerhouse – is good news for the wider jobs market as well as the regional picture. Manufacturing especially has seen strong growth towards the end of 2014 – and this bodes well for the year ahead. Advertised salary increases in these core sectors are early indicators of growth spreading to other areas of the job market which depend on these primary industries.

“However, we must not be reckless in our optimism. These companies are not simply offering higher salaries because they’re feeling flush with cash as the hard times start to dwindle – they’re struggling to attract the talent they need to expand. They need to fill the existing skills gap before we can expect other sectors to feel the benefits.”

Hospitality & Catering salaries take biggest fall

Average advertised salaries for jobs in Hospitality & Catering took the largest annual plunge to £24,148, which represents a decrease of 2.11% since November last year. Energy Oil & Gas was the only other sector to see an annual drop in salaries – a trend that has plagued this area of the job market throughout 2014.

Table 3: Worst improvers – job sectors by average salaries

Andrew Hunter, co-founder of Adzuna, explains: A decrease in average advertised salaries at the close of the year for Hospitality & Catering might seem counter-intuitive, but it’s actually a regular seasonal occurrence. Many businesses take on extra seasonal staff for low-wage work in order to cope with the extra footfall during this time of year. This is a positive sign for the wider economy – with real wage growth easing long-standing financial burdens, people have more income at their disposal for the festive period. This means that businesses across the UK have had to hire more seasonal staff than usual to cope with far greater consumer spending than last year – bringing the sector’s average salary down.

Every region of the UK experienced average advertised salary growth across 2014

Scotland has had a rough year. In October, it was the only region of the UK to experience a year-on-year salary decrease in the wake of instability resulting from the referendum. However the average advertised salary in Scotland grew by 0.53% over 2014. This still leaves it trailing behind the rest of the UK, but suggests that the Scottish jobs market continues to improve despite the political uncertainties of 2014.

At the same time, North East England (11.60%), Yorkshire and The Humber (10.76%) and North West England (8.78%) have jostled Wales (8.44%) out of the pole position it had been enjoying thanks to the Jobs Growth Wales initiative. Average Northern salaries remain lower than in the South, but at the current rates of change this may not remain the case for long – expect the North to surge forward in 2015.

Andrew Hunter, co-founder of Adzuna, comments: “A manufacturing boom has buoyed the Northern jobs market this year. The traditional home of manufacturing in the UK is seeing a new demand for highly-skilled labour, which is reflected in healthy annual wage growth. There is a more complicated picture for Scotland, another region where average salaries are tightly tied to a dominant job sector – waning salaries in Energy, Oil and Gas have been compounded across the region by recent political instability.

“However, advertised salaries still managed to grow on average in 2014. The margin of growth was undeniably lower than the increases enjoyed by the rest of the UK.  Nevertheless, average growth despite the unique setbacks faced by the Scottish jobs market speaks volumes of the market’s resilience – there is every reason to hope Scottish salaries and employment will bounce back into the coming year.”

Table 4: Biggest improvers – UK regions by average salary in 2014