High UK inflation means people need to earn more money…
UK inflation in August
Whilst inflation is dropping in the UK, it remains high (at 6.7% in Aug 2023).
As such, nominal wage growth has been continuing on an upward trajectory.
Nominal and real-terms wage growth
For more than a year prior to the quarter to June 2023, nominal pay growth was lower than inflation, which meant that - in real terms - wage growth was negative. Both regular and total real terms pay then returned to positive territory, but only by a marginal amount (by 1.2% for total and 0.6% for regular pay in July 2023).
Nominal and real-terms annual wage growth, year to May-July 2023
Single month wage growth by industry
At an industry level, provisional nominal wage growth was notably higher than inflation within Information and Communication, Professional, Scientific and Technical industries, in Metals Manufacturing and Manufacturing: Engineering & Allied Industries.
Single month wage growth excl. bonuses, by industry to July 2023
Our recommendation
Be transparent with pay to attract a larger number of candidates whilst increasing the diversity of your organisation
The driver behind the legislative movement towards providing pay transparency in the US is to help build trust with the potential worker base, attract a wider pool of applicants and help to close gender and racial pay gaps. Moreover, data evidences that jobs that carry wage information receive up to six times the volume of applications of ads without transparency – significantly increasing the pool of talent to source from.