Both wage growth and the jobs market have slowed in the UK, according to new Office for National Statistics (ONS) figures.
The latest labour market overview showed that between August and October 2023, pay increased to 7.3%, including bonuses. Despite the slowdown during recent months, it still outperformed inflation.
The ONS estimated that over this period the number of vacancies in the jobs market dropped to 949,000, equating to a 45,000 reduction, and marked the seventeenth consecutive decline.
However, KPMG and the Recruitment and Employment Confederation (REC)’s UK Report on Jobs, noted a decline in hiring last month (November), suggesting that a stall could be on the horizon.
Derek Mackenzie, CEO of Investigo, part of The IN Group, said: ”Economic turbulence has understandably impacted the decision-making of businesses, but it is vital that staff remain a top priority as their skills are essential for business success. The tech sector, in particular, is already facing a talent gap and technology such as generative AI not waiting for the economy to turn around. Therefore, organisations need to find a way to hire and train digitally adept staff to oversee their technology transformation. Hiring through entry-level roles or flexible contracts can help businesses gain access to digitally skilled staff, before providing on training, upskilling and reskilling to unlock the power of new recruits.”
Elizabeth Anderson, CEO of the Digital Poverty Alliance, added: “The wage slowdown across the UK is a huge concern as it means that more and more people in the UK will fall victim to the digital divide as budgets tighten and priorities shift. There are already up to 19 million people suffering from digital poverty in the UK, through a lack of access to skills, devices and connectivity, and as the cost of living continues to squeeze, people are increasingly having to make tough choices such as broadband or heating.
“It is vital that government and industry recognise the danger, especially with regards to technology, as we are imminently at risk of millions more people going offline in our digital world. In fact, our research with Deloitte found that there is up to a £17 billion Earning Premium that could be generated if those in work gained Essential Digital Skills for Work, creating a significant incentive for both government and industry to find a solution.”
The REC believes the slowdown has been caused by economic uncertainty, which has made businesses hesitant about hiring permanent employees. The report identified a growing disparity between the numbers of available candidates and the permanent job hires currently needed.
Sjuul van der Leeuw, CEO of Deployteq, part of Inspired Thinking Group, said: “As with all industries, marketing and technology are continuing to evolve at a rapid pace and we need skilled staff at the forefront. It is worrying to see the job market stall, especially at a time when many businesses are exploring technology implementation such as generative AI, yet lack the expertise to truly unlock the benefits. Businesses must find a way to redirect investment into staff, whether it’s filling vacancies or delivering training, as they are key to leading technology adoption, providing creative ideas, and ultimately helping businesses to grow.”
