Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Latest NewsLabour marketPay settlementsRedundancy

Real pay falls by 2.5%, despite record private sector growth

by Ashleigh Webber 14 Feb 2023
by Ashleigh Webber 14 Feb 2023 The labour market figures for Febraury 2023 show real pay continues to fall
Shutterstock
The labour market figures for Febraury 2023 show real pay continues to fall
Shutterstock

Pay continued to grow at a rapid rate in the last three months of 2022, driven by record private sector growth. However, when adjusted for inflation employees’ pay packets fell at a historically significant rate, according to labour market figures. 

Growth in regular pay excluding bonuses was 6.7% in October to December 2022, which was the strongest growth rate seen outside of the Covid-19 period, the Office for National Statistics (ONS) said. Average regular pay growth in the private sector was 7.3%, whereas in the public sector it was 4.2%.

The finance and business services sector saw the largest regular growth rate at 7.4%, followed by the construction sector at 6.1%.

Total pay including bonuses grew 5.9%, according to the ONS’s UK labour market figures in February 2023.

But in real terms, total and regular pay fell by 3.1% and 2.5% respectively, when compared with the same period a year earlier. The ONS said this decline was smaller than the record fall in real pay seen in February to April 2009 (4.5%), but was among the largest falls in growth since comparable records began in 2001.

The consumer prices index (CPI) rose by 10.5% in the 12 months to December 2022, down from 10.7% in November.

As economic uncertainty continued, the redundancy rate began to edge up. It reached 3.5 per 1,000 employees in October to December 2022, up by 0.8 on the quarter. This is still well below pre-pandemic rates, however.

Tim Gilbert, managing director for outplacement service Right Management, said this was not a cause for concern, but does suggest that some organisations have resumed a process of selective restructuring.

He said: “Sector-wise, we’re seeing increased levels of restructuring activity in manufacturing industries, where businesses are under pressure to address rising business costs.

“Team restructures in tech and finance, on the other hand, are capturing a lot of attention right now. This is due in part to the fact that many tech companies over-hired during the pandemic. But it only tells one side of the story. For all the tech firms that have announced they will be cutting staff, there are many others that have signalled strong hiring intentions for 2023.”

Candidate-to-vacancy ratio improves

The number of vacancies continued to fall, according to the February 2023 labour market figures, with 73,000 fewer job openings posted in November 2022 to January 2023 than in August to October 2022.  This meant the number of unemployed people per vacancy increased to 1.1 in October to December, as the candidate-to-vacancy ratio improved.

Labour market

Employers still pushing up salaries in bid to attract staff

Vacancy growth picks up after months of stagnation

Report finds young people feel shut out of labour market

Ben Harrison, director of the Work Foundation at Lancaster University said: “Employers, workers and job seekers are feeling the squeeze. With the IMF singling the UK economy to be the only major economy to shrink in 2023, persistent worker shortages are likely to become a vital political topic in the months to come.

“The government has hinted it will double down on its approach of increasing welfare sanctions, notionally intended to get those out of work into any job and those in part-time work to up their hours. The reality is this will not help grow the UK economy nor support people into sustained employment. But it will acutely increase the stress and anxiety of low-income workers and their families.”

Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), said the government should work with employers to draw more people from a range of backgrounds into employment.

“Recruiters and business groups still warn that labour shortages are holding back economic growth,” she said. “Next month’s spring Budget is the opportunity for government to provide further stability, clarity and much-needed support so that the economy can thrive despite the now stubborn labour shortages. Improving childcare support and provision to enable more parents to work and older workers such as grandparents to stay in work is vital, as is reinvigorating welfare to work schemes.”

Jonathan Boys, senior labour market economist for the CIPD, said: “When candidates are in short supply and even bumper pay rises can’t compete with inflation, employers need to consider the whole package they offer to staff.

”With one in five people being economically inactive, employers need to think about these groups and design better-quality jobs. This includes flexibility in all its guises, not just home working. Flexibility is particularly valued by the over 50s, helping people get into and stay on at work.”

Reward, compensation and benefits opportunities


Browse all comp and benefits jobs

Ashleigh Webber
Ashleigh Webber

Ashleigh is editor of OHW+ and HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support. Prior to joining Personnel Today in 2018, she covered the road transport sector for Commercial Motor and Motor Transport magazines, touching on some of the employment and wellbeing issues experienced by those in road haulage.

previous post
Ford announces 1,300 UK redundancies
next post
‘Offensive’ behaviour from Weetabix manager was constructive dismissal

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

NEU recommends teachers reject ‘insulting’ pay offer

28 Mar 2023

Union says Amazon pay rise is ‘insulting’

23 Mar 2023

Pay awards expected to drop back to 5%

22 Mar 2023

Nurses and midwives in Scotland accept new NHS...

21 Mar 2023

Campaign group urges health workers to reject NHS...

20 Mar 2023

Teachers strikes paused as unions begin talks with...

17 Mar 2023

Aldi gives store assistants another pay rise

17 Mar 2023

NHS pay deal confirmed: Strikes suspended as unions...

16 Mar 2023

University staff consider new offer but strikes continue

15 Mar 2023

UK workers would share salary to improve pay...

13 Mar 2023

  • Sodexo Engage – Mountain of lost benefits ebook PROMOTED | Help your people feel the impact of your benefits...Read more
  • Neurodiversity: How to make the workplace more inclusive (webinar) WEBINAR | Can your organisation truly be inclusive...Read more
  • How HR can facilitate internal talent mobility PROMOTED | Should internal talent mobility be a priority...Read more
  • Bereavement in the workplace: How training can help HR get it right PROMOTED | HR professionals play an essential role...Read more
  • UK workforce mental wellbeing needs PROMOTED | The mental wellbeing support employers are providing misses the mark...Read more
  • The Workplace Today Guide: Why it pays to support your staff’s financial health PROMOTED | The cost of living crisis has hit...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2023

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2023 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+