Average UK salaries have taken a hit in April 2016 as the national living wage takes effect and businesses struggle to manage the new expense. The latest data from the UK’s leading independent job site, CV-Library, reveals that the average UK salary for new jobs decreased by 3.4% from £34,055 in March 2016 to £32,899 in April 2016.
The same period in 2015 revealed a pay increase of 0.6%, further suggesting that the decline in salaries is due to businesses being forced to reduce costs for new employees as a result of wider economic uncertainty, from the new national living wage to the pending EU referendum.
Struggles associated with the new national living wage have hit the retail sector the hardest, with average advertised salaries in the sector dropping by a staggering 8.9% month-on-month, pushing wages down from £31,594 to £28,762. The news comes at a troubling time for the sector as many brick-and-mortar retailers struggle to compete in today’s competitive landscape.
Lee Biggins, founder and managing director of CV-Library comments: “We anticipated a slight decline in wages this month as employers adjust to the new expenses associated with the national living wage, and businesses strive for stability ahead of a potential Brexit. With uncertainty ahead, it’s more important than ever that recruiters advise employers to evaluate their hiring decisions and ensure they are making clever choices.”
Moving further into Q2 2016, the labour market will reveal how resilient it is to the shaky economic climate in the run-up to the EU referendum – CV-Library urges employers to take matters into their own hands, and recommends smart recruitment as an important step in achieving stability.
Biggins explains: “Every new hire should be adding something to the bottom line, employers need to hire the best people to achieve long-term objectives; and recruiters should take a proactive role in advising employers, just as in-house professionals should make this recommendation up the decision-making chain. It’s also a good time to evaluate recruitment techniques and find cost-effective hiring solutions that will have direct and positive financial implications. Through smart recruitment, businesses can find and retain talented professionals while still offering fair salary packages, without compromising on the bottom line.”
Despite salaries declining last month, CV-Library reports an annual job growth of 13.4% when comparing vacancies in April 2016, to April 2015. This is supported with an impressive 22.6% rise in applications during the same period, further affirming the strength of the job market in 2016.
In addition, salaries have actually slightly risen by 2.9% when comparing annual changes, suggesting that UK businesses are trying to do what they can to fight financial burdens.
