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Employee salaries failing to keep up with inflation levels

gender pay statement

The third quarter of 2022 has been hugely significant to employers, with a great deal of focus on the economic climate and The Cost of Living challenges. Between June and August, the UK saw the strongest growth in employee salaries since before the pandemic started, however in real terms (due to rising inflation), the average total pay is falling and employees are feeling the squeeze.

The latest data from the Office for National Statistics (ONS), in their Labour Market Overview, published 11 October 2022, also reported that unemployment levels are currently at their lowest since 1974, and the number of job vacancies also fell, by 46,000.

For employers, its essential to be aware of the latest developments, as this can impact areas such as recruitment, employee engagement and retention, and planning for 2023 and beyond.

Key Employment Statistics

Employment levels – June to August 2022

  • UK unemployment was at 3.5%.
  • Employment rate was estimated to be 75.5% and remains lower than pre-pandemic levels.
  • Total hours worked decreased and remain below pre pandemic levels.

Vacancies – July to September 2022

  • Job vacancies decreased to 1,246,000. A decline of 46,000 compared to the period April to June.
  • Vacancies falling by 3.6% in the period July to September is the third consecutive quarterly fall.

Number of payrolled employees – September 2022

  • Number of payrolled employees increased by 2.5% compared to the same period in 2021.
  • This increase amounted to 714,000 employees, and was an increase of 69,000 on the previous month (Aug 22).

Pay – period June to August 2022

  • Growth in employee salaries, including bonuses was 6% but in real terms, adjusted for inflation, average total pay fell and was 2.4%.
  • Growth in regular pay, excluding bonuses was 5.4% but in real terms, adjusted for inflation, regular pay fell and was 2.9%.

Redundancy – June to August 2022

  • The redundancy rate per thousand is 2.4.

2023 – planning for the year ahead

With 2022 coming to an end, and instability in the current economic and political climate, now is a good time for businesses to reflect on their current plans and how they may need to be adapted to prepare for going into 2023.

We are running a free webinar on 8 December on Planning for the Year Ahead to provide you the tools and updates you need to successfully manage your HR in 2023 and beyond

Employment Tribunal statistics

The Senior President of Tribunals Annual Report for 2022 has been published and reflects the current position regarding the continuation of managing the COVID-19 pandemic, case backlogs and other current challenges.

The report is an interesting read about the current judiciary in England, Wales, and Scotland. It reflects on how excessive waiting times continue to be a significant problem, especially in London and the Southeast.

How the judiciary is dealing with high staff turnover as well as the physical estates in some regions have now become too small and frail.

We are here to help

If you require any further support with your business including your HR, Payroll or Health and Safety, please contact us and speak to a member of the team.

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