Inflation in the UK has hit its highest level since 1992, with a rate of 5.4% recorded in December 2021. A mixture of post-pandemic consumer spending coupled with supply chain issues and a rise in gas and oil prices has pushed up the cost of goods and energy, causing inflation to increase to almost record levels, and The Bank of England predict that interest rates are likely to continue to rise further to around 7% by April 2022.
This wouldn’t be such a problem if wages were rising at the same rate or better, but the latest official data shows that wages fell by 1% from November 2020 to November 2021, and when you adjust for RPI (Retail Price Index), average wages today are lower than they were at the time of the 2008 global financial crisis.
This combination of high inflation and relative reduction in wages is causing a cost-of-living crisis in the UK. Many people are finding that they are simply bringing home less than they are spending on essential goods, food and bills, with costs only set to rise in the near future.
However, another factor at play could mean that it’s the perfect time to look for a new job to combat the cost-of-living issue. Unemployment is low, companies are hiring, and due to various economic factors, including the after-effects of Covid, the job market is experiencing a war for talent.
While average wages for those already in-post are lower than they were a year ago, and although money isn’t the only tool companies are using to attract candidates and retain staff, there is a recent noticeable increase in wages being offered to new starters across many industries as businesses vie to secure the best talent.
According to recent reports, wages for white-collar professionals are likely to increase by as much as 25% during the early part of 2022, with the most significant pay rises reserved for new starters. In the past year, wages for new starters grew by 6-8%, and those professionals who moved into ‘hero industries’ such as technology or health care saw pay hikes as high as +15-20%.
Of course, as any responsible recruiter will tell you, a new role has to be the right career move for you in the longer term and not just based on financial gain. Still, there is perhaps no doubt that one way to stay ahead of the rising cost of living is to start looking for a new role sooner rather than later. At the same time, the market remains candidate-led, and the financial rewards on offer are greater, assuring a secure position for when the war for talent eases, and inflation starts to fall again.
If you’re looking for your next career move or want to find suitable candidates for your vacancies, talk to our expert recruitment team who specialise in a range of professional services, including technology, marketing & HR and find out how McGregor Boyall can help you.