Staying put in your job could be the best option as advertised salaries slump

• Average UK advertised salary drops to £33,318 in August, falling 3.3% annually compared to £34,463 12 months ago, despite wages for those in work rising significantly (+2.9%) over the course of a year
• London and Scotland seeing largest annual advertised salary falls, of -5.3% and -5.2% respectively, as advertised pay falls in every region for the first time in three and a half years
• Advertised vacancies grow as job openings are left unfulfilled, with 1,150,396 positions available in August, 2% higher than July and up 27.1% year-on-year
• Sunderland continues to be the hardest place to find a job with four jobseekers going after every position, making it 50 times harder to secure employment than in Cambridge
• Healthcare professionals are among the biggest losers in the jobs market, with advertised salaries dropping 9.3% to £34,867 from August 2014
• But HR jobs beat the trend, seeing a 3.1% salary rise to £30,767 and becoming the second-highest growing sector this month behind the travel industry

Staying put in your job could be the best option for workers, as advertised salaries are currently falling in every region of the UK, according to the latest UK Job Market Report from Adzuna.co.uk.

While overall wage growth is improving – as those in work receive long overdue pay rises – advertised salaries are moving backwards. August saw the average advertised UK salary fall to £33,318, down 0.6% on July and down 3.3% compared to £34,417 in August 2014.

This was accompanied by spectacular levels of cross-regional decline. For the first time since January 2012, all areas of the UK saw advertised salaries fall on an annual basis.

The salary slump is a result of several factors, most significant being the recent flood of graduates entering the jobs market at entry level. A boom in lower-paid roles is also dampening average advertised salary numbers.

And while employers are rewarding their current employees with hard-earned pay rises – evident in the most recent ONS data showing strengthening average wages – this means they have less resource left for recruitment, and are unable to increase advertised salaries at the same rate.

Table 1:

Andrew Hunter, co-founder of Adzuna, comments: “As the summer’s heat draws to an end, advertised salaries are also cooling off. The pay packets being offered for new roles are substantially lower than this time last year, and are falling in every region across the UK. This national phenomenon confirms that the jobs market is starting to slow down, with an influx of entry-level and low-paid vacancies reducing average advertised salaries. The skills shortage has not benefited job hunters as might be expected. Counter-intuitively, it’s currently easier to climb the career ladder by staying in your current role and asking for a pay rise than by looking to move into a new position.”

Advertised vacancy numbers are increasing, as demand for skilled labour and technical workers continues rising, but many of the vacancies on offer are remaining unfilled. There were 1,150,396 vacancies in the UK this August, up 2% from July’s numbers and 27.1% more than in August 2014 – when 905,297 roles were advertised.

Competition for jobs has fallen to a record post-recession low of 0.62 applicants per advertised role this August, having gradually decreased since March when an average 0.80 jobseekers competed for each position. The number of applicants has nearly halved since August 2014, when on average 1.06 candidates applied for each advertised vacancy. Despite this, the latest ONS figures for May to July 2015 reveal that unemployment increased from February to April this year, with 1.82 million people currently out of work.

Andrew Hunter, co-founder of Adzuna, explains: “The number of jobs available in the country has reached a two-year high reflecting the desperate need for skilled workers in the UK labour market. A chronic skills shortage in the country helps to explain why there is such a high number of vacancies and yet growing unemployment levels. Finding the right person for the job, with the necessary skills and experience is not getting any easier. Vacancies are lying unfilled for longer, as new talent to meet rising demand has all but dried up.”

London and Scotland have been hardest hit by the widespread wage decline. The capital experienced the largest negative change from this time last year, seeing a 5.3% dip in salaries between August 2014 and 2015, narrowly outstripping Scotland, whose workers suffered a 5.2% decline. The ongoing economic recovery has failed to translate into improving wages across the country. Even Yorkshire and The Humber, which last month achieved the strongest regional salary growth, failed to achieve positive growth as salaries took an unparalleled hit this August.

Table 2: UK regions by average advertised salary

Andrew Hunter, co-founder of Adzuna, continues: “Advertised salaries in Scotland are falling due to the struggling oil and gas industry accompanied by a reduction in highly paid positions. And as autumn begins, low paid seasonal workers are entering the capital’s jobs market, which alongside an increase in entry-level jobs, has combined to cause a substantial decrease in advertised salaries.”

HR salaries rise as war on talent hots up

Several sectors have shown resilience against the widespread salary slippage, in particular the HR sector. The average advertised pay in a Human Resources job is now £30,767, up 3.3% from £29,752 in August 2014, showing a clear rise in the valuation of HR departments within companies.

The HR sector is second only to the Travel industry’s salary growth of 3.6% this August from last year, revealing that resources are being targeted towards keeping current employees within their jobs and identifying new talent. Companies are encouraging HR teams to develop in-house employees and minimising the need to draw on the dwindling reserves of talent in the jobs market.

Table 3: The winners – job sectors by average salary growth

Andrew Hunter comments: “Businesses are beginning to value a good HR department more than they have in the past, as they respond to the talent shortage with new tactics. It’s getting harder to source skilled workers in the UK for industries such as trade and construction and IT, even though there are many vacancies on offer. An easier option than hoping new workers are the right fit, is for companies to invest in HR, ensuring happy employees and first access to fresh talent as it appears in the market. This attitude shift towards building up HR departments shows a new focus on targeted recruitment and retention, helping employers to bypass the war for top talent.”

Table 4: The losers – job sectors by average salary growth

Healthcare workers and nurses feel the strain

With salaries falling across the country, healthcare workers and nurses have suffered a 9.3% salary drop from August last year to £34,867, a substantially higher loss than most other sectors. Salaries in the sector have decreased despite the considerable lack of resources within the sector, which indicate more staff and particularly nurses are needed, with 127,374 vacancies in the industry.

Andrew Hunter, co-founder of Adzuna, continues: “As healthcare workers face more pressure and longer hours, many may feel they are deserving of salary growth. But advertised salaries in the sector have fallen. This is in part due to a rise in part-time care work needed to look after the elderly of the country. The industry is under considerable pressure. With continual headlines about a lack of resources, it is unlikely the sector will attract the workers it desperately needs if salaries continue to fall. As the NHS experiences a staffing crisis and junior doctors face longer hours for reduced pay, the industry will need to do more to secure the best workers to deliver top quality care. If salaries continue to decline, workers may be tempted into other sectors – or even abroad.”

Tech start-ups proving the most popular positions

Advertised positions in Tech start-ups have attracted the most views this August as vacancies continue to increase, with ‘Songkick’ (21 vacancies), a music and events service, social games company ‘King.com’ (19 vacancies) and ‘YPlan’ (13 vacancies), an event finder and booking service all proving particularly popular.

Andrew Hunter comments: “Tech start-ups continue to appeal to a variety of job hunters, with vacancies increasing as consumer demand for online services grows. The broad range of music, gaming and events services shows that the industry’s potential is phenomenal and employment opportunities in the sector will continue to climb.”

Meanwhile, the companies that have seen the highest rises in average advertised salaries over the past twelve months are Argos (+13.0%), HSBC (+10.4%) and Boots (+6.4%).

Table 5: The winners – companies by average salary growth

Table 6: The losers – companies by average salary growth

The North East continues to lag behind the rest of the country in terms of providing enough vacancies for jobseekers. In Sunderland, where an average 4.24 jobseekers apply per vacancy, it is now 50 times harder to secure employment than in leafy Cambridge, which boasts the best job outlook in the country with just 0.09 jobseekers to each advertised position.

Andrew Hunter concludes: “The promises of the Northern Powerhouse have not spread to the wider region, as the North East in particular continues to suffer from a lack of skilled workers. Key areas such as Manchester and Salford may have seen a more stable jobs market but Northern workers need to keep trying to improve their skills and grab those vacancies.”