{"id":18591,"date":"2023-03-06T13:19:21","date_gmt":"2023-03-06T13:19:21","guid":{"rendered":"https:\/\/www.adzuna.co.uk\/blog\/?p=18591"},"modified":"2023-10-26T15:24:26","modified_gmt":"2023-10-26T15:24:26","slug":"long-term-trends-in-the-uk-labour-demand","status":"publish","type":"post","link":"https:\/\/www.adzuna.co.uk\/blog\/long-term-trends-in-the-uk-labour-demand\/","title":{"rendered":"The shifting trends in labour demand and salaries over time"},"content":{"rendered":"

It’s fair to say the last few years have been somewhat tumultuous, right? For the world as a whole, but also for the UK and in particular our labour market. At times it has felt hard to keep up with the news. So we thought it would be a good idea to take a look back over the longer term and to see what trends and points of interest we can pick out from our data.\u00a0<\/span><\/p>\n

To gain further insights into labour demand in the last few years, we can use Adzuna\u2019s intelligence portal<\/a>, our proprietary dashboard that displays a wide range of aggregate statistics based on all the vacancy listings we hold on our site. This allows us to look at our data at a granular level by occupation, sector, industry and skills across geographic areas at various levels.\u00a0<\/span><\/p>\n

We\u2019ll be looking at our data from April 2016 \u2013 covering austerity, Brexit, the Covid-19 pandemic, the war in Ukraine and the cost of living crisis.<\/p>\n

Today, we will look at overall demand and average salaries across the UK.<\/p>\n

Overall job vacancy demand<\/b><\/p>\n

Since April 2016, there have been over 118 million unique job listings on Adzuna<\/a>. Let’s look at how demand has evolved over time \u2013 the graph below shows the number of listings on Adzuna each week since April 28th<\/sup> 2016:<\/p>\n

\"Graph<\/p>\n

Several really interesting points stick out from the data:<\/p>\n

    \n
  1. The huge shifts in demand since the start of the pandemic<\/strong><\/li>\n<\/ol>\n

    First, there was the precipitous drop in demand in Spring 2020 \u2013 total listings went from just 950,000 on the 8th<\/sup> of March to only 350,000 just over two months later on the 17th<\/sup> of May. Then we can also clearly see the strong recovery from this point, with total vacancy numbers returning to their pre-pandemic level in April 2021 before continuing to rise to record high levels, reaching a peak of over 1.4 million on December 5th<\/sup> 2021.<\/p>\n

    Then since February of last year, we\u2019ve seen a general fall in demand towards pre-pandemic levels, roughly fluctuating between 900,000 and 1.2 million vacancies. The two high peaks in late 2022 and early 2023 likely reflect both a rebound in economic growth as we\u2019ve moved out of the pandemic, but also a tightening in the labour market caused by people leaving the labour force (i.e., the inactivity crisis) and a high turnover in jobs.<\/p>\n

      \n
    1. A general decline in vacancies between 2018 and 2020<\/strong><\/li>\n<\/ol>\n

      The week before the Brexit referendum which occurred on June 23rd<\/sup> 2016, overall demand was 1.19 million. In the same week in 2017, total demand was 1.24 million, a slight rise. Economic growth in 2017 was actually slightly higher than in 2016 \u2013 2.4% compared to 2.2%<\/a>. Over the next two years though, economic growth fell each year \u2013 to 1.7% in 2018 and 1.6% in 2019<\/a>.<\/p>\n

      And overall labour demand followed the same path \u2013 totalling 1.17 million listings in 2018 and 1.08 million listings in 2019 for that same week in June. This is not surprising \u2013 a stagnating economy means a slowdown in production, which when combined with general increases in productivity, and increasing availability and decreasing costs of capital alternatives to labour means a net fall in overall labour demand.<\/p>\n

      The reasons behind the economic slowdown we have seen since the global financial crisis are multiple and complex \u2013 Britain is not unique in having experienced this, as economic growth has fallen globally, with the productivity puzzle and the broader fallout from the crisis has led to a slowdown amongst more developed economies, whilst the fall in China\u2019s growth rate as it has encountered new constraints on its economic expansion has also played a role. And of course in the UK\u2019s case specifically, Brexit has clearly played a role, both as a demand and supply factor, of which there are many.<\/p>\n

        \n
      1. Seasonal trends in labour demand<\/strong><\/li>\n<\/ol>\n

        There are clear trends within years in terms of total labour demand. Broadly speaking, each year labour demand drops dramatically at the end of the summer and after Christmas. In 2016 demand went from 1.15 million on August 7th<\/sup> to 990,000 a week later. It then went from 1.17m on December 4th<\/sup> 2016 to 930,000 on January 1st <\/sup>2017.<\/p>\n

        Similar-sized drops at these times of year are seen pretty much each year, including during the pandemic year when labour demand fell back from its upward trend in the first week of September and then across December, although for the latter of these changes to lockdown, restrictions<\/a> will certainly have had an impact. The likely reason behind these trends is fairly self-explanatory \u2013 these are two points that follow periods of high economic activity, after which consumption falls and the wave of seasonal labour demand passes. The seasonality in labour demand means that we should be careful not to over-interpret the falls in vacancies that we’ve seen in the last month or so as seasonal factors will be playing some part in this.<\/p>\n

        So what does this look like for salaries over time?<\/p>\n

        Shifting Salary trends\u00a0<\/b><\/p>\n

        There are also some interesting longer-term trends in the salaries associated with vacancy listings \u2013 the graph below shows the median salary of listings since April 2016:<\/p>\n

        \"Salary<\/p>\n

        Over the whole period, the median listed salary was \u00a329,000. From 2016 through 2020 there was a clear general rise in the average salary. For 2016 (starting in April) the median salary was \u00a328,000. It stayed broadly the same in 2017 and 2018, before rising to \u00a329,000 in 2019 (a 3.2% increase from the previous year) and \u00a330,000 in 2020. The average salary then fell back slightly to \u00a329,400 in 2021, before returning to its 2020 level of \u00a330,000 in 2022, and has continued to rise into 2023.<\/p>\n

        There may be political and economic reasons behind these trends \u2013 weak productivity growth combined with labour supply constraints resulting from Brexit may have helped drive up average salaries from 2016 through 2020, whilst the inactivity crisis, the war in Ukraine and the effects of support provided during the pandemic which has led to the cost of living crisis and spiralling inflation in prices and wages may explain some of the rise since late 2021.<\/p>\n

        Compositional changes will also have played a role, with the falls in vacancies through the lockdowns in spring 2020 and early 2021 being driven mostly by falls in low-paid roles \u2013 as these roles returned as work-from-home restrictions were lifted, the average salary fell back towards its\u2019 \u2018true\u2019 level.<\/p>\n

        However, salary data is quite volatile, especially when considering that vacancies are often listed with a range of possible salaries. Additionally, the movements in the median salary are quite minor, especially when compared to the shifts in demand discussed before. As such, our ability to draw out any larger trends from this data should be done so with caution.\u00a0<\/span><\/p>\n

        There also appears to be some seasonality, particularly in the earlier years covered by the data (2016-2019) \u2013 there is broadly a tough trough the summer months starting around May before salaries then begin to pick up around October time. This summer trough is likely due to the large rise in seasonal part-time work in hospitality and retail in the summer which is generally low-paid, bringing the average salary down.<\/p>\n

        With our Adzuna Intelligence portal, the quantity and quality of the data we hold allows us to paint a clear picture of labour demand over time.<\/p>\n

        In subsequent blogs, we will look at compositional trends \u2013 changes relating to which industries, occupations and sectors make up labour demand \u2013 as well as geographic differences and trends in skills.<\/em><\/p>\n

        \n

        \"\" Read more: <\/strong>Are you looking to make better decisions, faster? Speak to one of our team about Adzuna Intelligence<\/a>; your trusted source for labour market insights with granular location-level data across key facets such as industry, salary, occupations and more\u2026\u2019

        <\/p>\n","protected":false},"excerpt":{"rendered":"

        It’s fair to say the last few years have been somewhat tumultuous, right? For the world as a whole, but also for the UK and in particular our labour market. At times it has felt hard to keep up with the news. So we thought it would be a good idea to take a look Continued \u00bb<\/a><\/p>\n","protected":false},"author":51,"featured_media":18594,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1168],"tags":[],"class_list":["post-18591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-adzuna-intelligence"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/18591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/users\/51"}],"replies":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=18591"}],"version-history":[{"count":1,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/18591\/revisions"}],"predecessor-version":[{"id":20219,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/18591\/revisions\/20219"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media\/18594"}],"wp:attachment":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=18591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=18591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=18591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}