Median monthly pay for October 2023 has increased by 5.9% compared to the same period last year, to an estimated at £2,276, according to data from the Office for National Statistics (ONS).
Its labour market figures published on 14 November revealed that regular pay growth fell to 7.7% year-on-year in the three months to September, down from a peak of 7.9%. In real terms that have been adjusted for inflation, annual growth for total pay rose on the year by 1.4%, and regular pay rose on the year by 1.3%. This growth is due to the Civil Service one-off payments made in July and August 2023.
Employee wages have risen in real terms, at 1.3% year-on-year, while wage growth has remained high in predominantly lower-paid occupations, including hospitality, manufacturing, distribution, cleaning and childcare.
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In the three months to July this year, economic inactivity due to ill-health rose to 2.6 million, suggesting that poor health and the NHS crisis on access to diagnosis and treatment are behind surging economic inactivity levels.
Darren Morgan, director of economic statistics at ONS, said: “Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed or who are neither working nor looking for a job all little changed on the previous quarter. The number of job vacancies fell for the 16th straight month. Nevertheless, vacancies still remain well above their pre-pandemic levels. With inflation easing in the latest quarter, real pay is now growing at its fastest rate for two years.”
Michael Stull, director at ManpowerGroup UK, added: “Our advice to organisations that are facing this perfect storm of high inflation, skills shortages and economic stagnation, is to think carefully before making pay increases. While uncertainty remains so prevalent, our recommendation is to look instead at ways to retain existing staff by bolstering benefits packages and by offering opportunities to upskill and reskill, especially across the areas where talent shortages prevail.
“Businesses must be prepared to make braver long-term decisions in areas such as their values and overall purpose. There is an opportunity to be seized by those [which] are prepared to adapt and do things differently, both in terms of employee retention and customer and client loyalty.”