Competition for jobs falls to two-year low, reports Adzuna
In February 2014 there were 1.55 job seekers competing for each advertised vacancy, 35% lower than in February 2013 (2.39).
Simultaneously, the number of UK vacancies has topped 800,000 for the first-time in two years. There were 800,614 advertised vacancies in February 2014, 19% more than the 675,594 in February 2013. This was the biggest annual pick-up in eight months.
Andrew Hunter, co-founder of Adzuna, explains, “More jobs are popping up all over the UK as employers gear up for a busy spring, and as a result, competition between candidates is easing. In many parts of the country there are now more jobs advertised than jobseekers, and top talent is becoming harder to source. Adzuna real-time data shows vacancies are continuing to pick-up into March, and could top 850,000 by the end of the month. If this trend continues, it will push the balance of the labour market further into the hands of jobseekers, allowing them to be more selective in their job hunt, and giving them more power to negotiate on salaries.”
Annual change from February 2013
Jobseekers per Vacancy
Av. Advertised UK Salary
Although competition between jobseekers is easing, salaries are still slipping behind. Advertised salaries fell 4.4% year-on-year in February, suggesting employers are capping wages to compensate for the hiring of new staff. The average UK salary now sits at £32,023, down from £33,511 twelve months before. Factor in inflation, and salaries have declined by £2,077 in real terms over the same period.
According to the latest ONS figures, average UK earnings rose by 1.4% in the three months to January compared to a year ago. In the private sector, the ONS reports salary growth of 1.7%, meaning that these salaries have now caught up with inflation (at 1.7%) and suggesting that private sector workers are no longer getting worse off as the cost of living increases.
But Adzuna’s real-time data does not support this trend, showing that average UK advertised salaries have actually dropped by 4.4% in the last year. Factoring in inflation of 1.7%, this means that UK workers are actually 6.1% worse off than they were last year.
Hunter elaborates, “The cost of living crisis is still far from over. UK workers have seen their pay packets shrink significantly since the recession. But although a slice has been shaved off advertised salary packets, the prospects for potential job seekers have become brighter. Competition for jobs has fallen in every region of the UK.
“As vacancies continue to open up, and competition for jobs falls further, employers will be forced to increase advertised wages in order to attract the best talent. Now it is just a question of time until wages begin to pick-up, and jobseekers begin to feel the benefits of cash in their pockets.”
Salary stagnation by region
Despite the nationwide salary stagnation, some regions of the UK are showing wage growth.
Salaries in the North of the country are showing the strongest signs of recovery. Advertised salaries grew year-on-year in the North West (2%) and Scotland (2%) in February, and were stable in the North East (0%).
In these regions, salaries have been supported by a thriving manufacturing sector. The North West is the industrial hub of the UK, and home to 50,000 more manufacturing workers than the South East. In particular, the North West has seen its textile industry expand, thanks to the government’s Regional Growth Fund, which has provided a £81m boost to textile hubs including Bolton, Manchester, Oldham, Rochdale and Tameside and central and east Lancashire.
And there are plans to expand the manufacturing sector further. Siemens is creating 1,000 manufacturing jobs in the North East by investing £160m in wind turbine production with two new plants to open in Hull and East Riding.
At the other end of the country, salaries in the south have been slipping. Advertised salaries declined in London (-6%), East Anglia (-5%) and the South East (-4%), as wages remain stuck in a post-recession lull. However, wages in these regions are still some of the highest on average. In London, the average salary is £39,288 - £7,000 more than the UK average.
Yorkshire & Humber
Across the UK, salaries do not always follow vacancy growth. Job vacancies in the South East grew by 10,000 in the month to February, reaching 113,324. But the South East was the third biggest annual decliner in terms of salary, dropping 4.4% to an average of £30,418.
This negative correlation was echoed in London. The capital featured on the top ten best cities to find a job for the first time in February, with 1.01 jobseekers per vacancy, after vacancies increased 16% year-on-year. But London was also the region in which salaries have fallen the most in the last year.
Hunter said, "Jobseekers in the capital are finding it particularly tough. Not only are they being punished by rents and house prices, which are increasing much faster than the rest of the country, but they are seeing their average salaries fall the fastest. There is still an image of London as a golden-paved city of opportunity for jobseekers, and for some sectors – like the financial services – this is true. But many firms in the capital have clamped down on wages. With the cost of living in the capital cripplingly high, London jobseekers need a pay rise more than any other region.”
Where are all the jobs?
In the nine best cities to find a job in the UK, there is more than one vacancy available for every job seeker. Cambridge was the best city to find a job in the UK, with five jobs to every job seeker. Aberdeen was the only city in the top ten table that was outside of the South.
Hunter explains, “The government desperately need to inject some cash into the North to even out our country’s bi-polar jobs market. In areas like Salford the prospect of finding a job is still a titanic task, with over 30 jobseekers scrambling over each position.”