Over the two time periods of January through March 2022 and April through June 2022, the growth of regular salaries lagged behind rising inflation, according to figures from the Office of National Statistics.
The only industry whose regular wage growth, excluding bonuses, has been higher than inflation between May to July 2022 is professional and scientific; it was 10.1 per cent from July to September 2022. This indicates that the industry’s average pay during this time was 10.1 per cent higher than they were during the same time last year.
In recent years, wage growth in a number of other industries, including property, technology and communication, retail, and finance, was also significantly above inflation. In all of these businesses, however, regular salary growth lagged behind growing inflation between January and March 2022 and April and June 2022.
Wealthbrite founder of workplace financial education and wellbeing specialists Carla Hoppe says: “This latest report on wages highlights the pain working people in the UK are feeling. Employers may not be able to pay people more but they can show they care and address the rapid decline in levels of financial wellbeing. Financial education, perks and benefits that match people’s greatest needs and money and mental health training can all create an empathetic space to have a conversation about managing money in difficult times.”
Glassdoor economist Lauren Thomas says: “As real wages have plummeted, worry about inflation amongst workers has soared. Glassdoor data reveals a threefold increase in mentions of ‘inflation’ in 2022 reviews from UK employees from last year. Unusually high inflation and sluggish productivity since the pandemic are key reasons wages haven’t been able to keep up. Between these issues and the continued difficulty of hiring, now might be a good time for companies to invest in productivity-enhancing tools.
“But both problems are difficult for any single company to tackle. Until either can be tamed, companies need to listen to what their workers really want to feel supported. Even if an employer cannot raise salaries, there are other ways to support workers, such as increased flexibility, one-off bonuses, winter energy stipends, and more. Each can effectively boost staff morale while limiting long-term financial liabilities for the employer as they are easier to claw back.”
Mather & Murray Financial Samuel Mather-Holgate says: “It’s unsurprising that wages in most sectors aren’t keeping pace with inflation, considering the astronomical rate at which prices are rising at the moment. The figures suggest that employers are using bonuses to prop up total remuneration so they don’t need to commit to this as an ongoing liability.
“This is a clever use of their cash and could keep employees onside bearing in mind the very tight labour market we still have. It tends to be the case that those on the highest wages have careers that keep up with the cost of living and those on the lowest pay don’t. This may be because employers consider those skilled workers too valuable to lose, but it does create an even more unequal society.”
Thera Wealth Management owner Philip Dragoumis says: “Real wages in the UK remain catastrophically negative. There is a reason for this, namely labour structures have not given workers strong pay bargaining power. This means that employees across the developed world are failing to achieve the very minimum aim of at least maintaining their standard of living.”