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A slow jobs market is pushing down wage growth

The impact of a slow jobs market is growing and is affecting the growth of wages in the United Kingdom

Statistics show that only around 10% of workers decided to change employers in 2017 and also in 2018. Although this is a higher rate than the 5.7% during the last recession, it is still not enough to leave wages rates unaffected despite there being record rates of employment.

Given the rates, it is thought that employees are either unaware of their choices or they consider changing employers too much of a risk.

The recent findings show that those who changed employers obtained a higher growth in wages than those who chose to stay in the same place. However, the benefits are seen much more by those with a higher skill set rather than those with lower skill sets. Low-skilled employees’ average hourly earnings went up 0.2% during 2018 when they decided to move jobs, as opposed to 3.3% for lower- to middle-skilled employees. Upper- to middle-skilled workers received an average of a 7% increase for changing jobs, and workers with upper skills received an average of 6%.

It is thought that there was a smaller difference for those with lower skill sets because their income is near to the NLW (National Living Wage). Such workers who decided to stay with their current employer saw an average increase in pay of 4.4%, which would be the same as the increase in the national living wage (with this rising from £7.50 to £7.83 during 2018).

Locations also showed some differences. The change in earnings for people changing employers was at a much higher rate in some regions. Yorkshire and then the Humber followed London and then the North East.

It is therefore clear that the possibility of switching between the social classes here in the United Kingdom has stagnated.

Employers are therefore being urged to consider development and training opportunities in order to assist those with lower skill sets to enable them to progress. Confidence-building schemes or mentoring programmes are being encouraged in addition to accredited training.

As we are all going through a period of uncertainty, we need to ensure that our country is highly productive and able to create new roles and maximize that talent found in all of us, but particularly for those who are starting from behind.

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