{"id":19700,"date":"2023-09-07T13:43:22","date_gmt":"2023-09-07T13:43:22","guid":{"rendered":"https:\/\/www.adzuna.co.uk\/blog\/?p=19700"},"modified":"2023-10-03T13:05:18","modified_gmt":"2023-10-03T13:05:18","slug":"closing-the-productivity-gap-greater-manchester-and-london","status":"publish","type":"post","link":"https:\/\/www.adzuna.co.uk\/blog\/closing-the-productivity-gap-greater-manchester-and-london\/","title":{"rendered":"Closing the productivity gap between Greater Manchester and London"},"content":{"rendered":"

It is fair to say that the UK economy has not been in great shape in recent years. Growth has been poor since the financial crisis, and inequality has remained high, with <\/span>poor labour productivity<\/span><\/a> a factor behind both of those issues. In this blog, we look at the productivity gap between second city Greater Manchester and London. We analyse economic inequalities and differences in job quality and labour demand, as well as tactics to close the productivity gap.<\/span><\/p>\n

Weak performance of second cities<\/h2>\n

One of the drivers behind poor UK economic growth is the weak performance of our second cities and areas outside of London and the greater South East, where productivity lags behind other major cities internationally. This is shown in the chart below from a <\/span>report by the Resolution Foundation<\/span><\/a>.<\/span><\/p>\n

Cities further to the right are more productive, and the bigger the bubble the higher employment. London is of course the star in the UK, with high productivity across a large number of workers, whilst the rest of the pack aside from a few outliers has much lower productivity than the capital but also than other second cities internationally like Lyon or Frankfurt.<\/span><\/p>\n

\"Graph<\/p>\n

The Northern Powerhouse and Levelling Up<\/h2>\n

Various strategies \u2013 including the Northern Powerhouse and Levelling Up \u2013 have been and are being put in place to tackle this challenge of regional economic inequalities. <\/span>Greater Manchester has been key to each of these efforts, with it\u2019s relatively poor economic performance starkly contrasting all of its strengths including its size, historical and cultural significance, and geography.<\/span><\/p>\n

Increasing share of graduates and total employment<\/h3>\n

The <\/span>Resolution Foundation suggest<\/span><\/a> that increases in capital per worker, the share of graduates and total employment could lead to a huge reduction in the productivity gap with London. In order to achieve these, particularly the latter two, there need to be more and better job opportunities in the area.<\/span><\/p>\n

The Centre for Cities<\/span><\/a> identify that one of the metro mayor\u2019s key policy priorities should be to continue the turnaround of Manchester city centre to improve job opportunities for all Greater Manchester residents.<\/span><\/p>\n

The <\/span>Greater Manchester Independent Prosperity Review<\/span><\/a> identifies poor productivity, suboptimal skills demand, low pay and poor job quality as some of the principal labour market problems the area is facing.\u00a0<\/span><\/p>\n

Analysing vacancy data<\/h3>\n

In order to better understand the types of opportunities available in Greater Manchester (GM), and how these compare to the capital, we analysed our vacancy data using the <\/span>intelligence portal<\/span><\/a>, our proprietary dashboard that displays a wide range of aggregate statistics based on all the vacancy listings we hold on our site. We look at vacancy data for London and Greater Manchester from the last 6 months (to 23<\/span>rd<\/span> August). <\/span>While the quality of work is made up of a range of elements, salary is a fairly decent, readily available and easy to interpret proxy for this. <\/span><\/p>\n

The median salary of vacancies in Greater Manchester over the past 6 months was \u00a331,819, equal to 84% of that on offer in London (\u00a337,784). While this will partly be due to the higher cost of living in London which will push up salaries, a large part of this differential will also be due to differences in the composition of vacancies between the two places \u2013 higher paying occupations, employers and industries will be more highly concentrated in London than Manchester. <\/span><\/p>\n

The table below lists the top demanded occupations in Greater Manchester and London, along with the total number of vacancies and the median salary for each (rounded to the nearest \u00a31,000). High paying occupations such as <\/span>Business and financial project management professionals<\/span><\/i> and <\/span>IT business analysts, architects and systems designers<\/span><\/i> appear on the list for London but not for GM, and vice versa for low paying professions including <\/span>Sales and retail assistants<\/span><\/i>.\u00a0<\/span><\/p>\n

Table 1: Advertised vacancies and salaries in top demanded occupations, Greater Manchester vs London<\/h2>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Top demanded occupations in GM<\/strong><\/th>Vacancies in GM<\/strong><\/th>Median salary in GM<\/strong><\/th>Top demanded occupations in London<\/strong><\/th>Vacancies in London<\/strong><\/th>Median salary in London<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Teaching professionals n.e.c.<\/td>29,560<\/td>\u00a333,000<\/td>Programmers and software development professionals<\/td>62,800<\/td>\u00a372,000<\/td>\n<\/tr>\n
Programmers and software development professionals<\/td>11,845<\/td>\u00a355,000<\/td>Teaching professionals n.e.c.<\/td>44,223<\/td>\u00a337,000<\/td>\n<\/tr>\n
Sales accounts and business development managers<\/td>8,861<\/td>\u00a340,000<\/td>Sales accounts and business development managers<\/td>42,033<\/td>\u00a344,000<\/td>\n<\/tr>\n
Business sales executives<\/td>7,217<\/td>\u00a330,000<\/td>Chefs<\/td>40,682<\/td>\u00a332,000<\/td>\n<\/tr>\n
Social workers<\/td>7,142<\/td>\u00a339,000<\/td>Management consultants and business analysts<\/td>32,155<\/td>\u00a349,000<\/td>\n<\/tr>\n
Human resources and industrial relations officers<\/td>7,028<\/td>\u00a329,000<\/td>Business and financial project management professionals<\/td>28,973<\/td>\u00a363,000<\/td>\n<\/tr>\n
Sales and retail assistants<\/td>6,035<\/td>\u00a324,000<\/td>Human resources and industrial relations officers<\/td>26,852<\/td>\u00a334,000<\/td>\n<\/tr>\n
Chartered and certified accountants<\/td>5,884<\/td>\u00a340,000<\/td>Chartered and certified accountants<\/td>26,785<\/td>\u00a352,000<\/td>\n<\/tr>\n
Teaching assistants<\/td>5,595<\/td>\u00a320,000<\/td>Secondary education teaching professionals<\/td>23,735<\/td>\u00a342,000<\/td>\n<\/tr>\n
Solicitors and lawyers<\/td>5,232<\/td>\u00a352,000<\/td>IT business analysts, architects and systems designers<\/td>21,223<\/td>\u00a378,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

These salary differences will translate in part to the lower relative interest that we see for roles in Greater Manchester than in London. The interest quotient, a metric that quantifies the level of jobseeker interest in roles that provides a proxy for talent supply to complement market demand data, is 2.1 in Manchester compared to 3.1 in London.<\/span><\/p>\n

\"A<\/p>\n

Comparing ‘gold star’ jobs<\/h2>\n

We also look at the \u2018gold star\u2019 occupations for productivity gains \u2013 those occupations that are in high demand and are high paying. We use the portal\u2019s insight reports function to compile a list of the number of vacancies and median salary of all occupations with vacancies across the UK, and identify from this list of 397 occupations the six that are in the 90<\/span>th<\/span> percentile or above for total demand and median salary: p<\/span>rogrammers and software development professionals<\/span><\/i>; b<\/span>usiness and financial project management professionals<\/span><\/i>; <\/span>financial managers and directors<\/span><\/i>; <\/span>IT business analysts, architects and systems designers<\/span><\/i>; <\/span>solicitors and lawyers<\/span><\/i>; and <\/span>quantity surveyors<\/span><\/i>. <\/span><\/p>\n

Broadly speaking, these are the sort of occupations that having a high prevalence of them could boost productivity growth for an area like Greater Manchester \u2013 they\u2019re high paying (and therefore, all other things being equal, could increase the quality of jobs available) and are in high demand (and therefore, all other things being equal, could increase the level of employment significantly). <\/span><\/p>\n

The table below shows the relative prevalence (the proportion of total vacancy demand that they make up) of these occupations in GM versus London. All of these occupations except <\/span>solicitors and lawyers<\/span><\/i> are relatively more prevalent in London than Manchester. The magnitude of these differences are not huge, but closing the gaps could make a significant difference to a not insignificant number of individuals. Take the 0.8 percentage point difference in the prevalence of vacancies for <\/span>programmers and software development professionals<\/span><\/i>: closing this gap would translate to 99 more vacancies in the occupation in GM, increasing the total pay on offer by nearly \u00a35.5 million. Considering the potential wider benefits and multiplier effects this would lead to, the economic benefits of an increase in availability of opportunities in high value occupations like these should not be sniffed at.<\/span><\/p>\n

Table 2: The prevalence of 'gold star' occupations, Greater Manchester vs London<\/h2>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t
\u2018Gold star\u2019 occupations<\/strong><\/th>GM prevalence<\/strong><\/th>London prevalence<\/strong><\/th>Difference<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Programmers and software development professionals<\/td>4.30%<\/td>5.10%<\/td>0.8 ppts<\/td>\n<\/tr>\n
Business and financial project management professionals<\/td>1.50%<\/td>2.30%<\/td>0.9 ppts<\/td>\n<\/tr>\n
Financial managers and directors<\/td>1.10%<\/td>1.70%<\/td>0.6 ppts<\/td>\n<\/tr>\n
IT business analysts, architects and systems designers<\/td>1.20%<\/td>1.70%<\/td>0.5 ppts<\/td>\n<\/tr>\n
Solicitors and lawyers<\/td>1.80%<\/td>1.10%<\/td>-0.8 ppts<\/td>\n<\/tr>\n
Quantity surveyors<\/td>0.70%<\/td>0.70%<\/td>0.0 ppts<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Differences in labour demand<\/h2>\n

Differences in the composition of labour demand are also prevalent when looking at our vacancy data by industry. <\/span><\/p>\n

The table below shows the top hiring industries in Greater Manchester and the proportion of vacancies they account for in GM versus in London. We can see that higher paying, higher growth service sector industries including <\/span>professional, scientific and technical activities<\/span><\/i> and <\/span>financial and insurance activities <\/span><\/i>make up a greater share of labour demand in London than in Greater Manchester. Meanwhile GM’s top hiring industry by a fair margin, <\/span>wholesale and retail trade<\/span><\/i>, is one of the lowest paying industries, typically offering low quality, low productivity jobs that are relatively low skilled and are among those most under threat from automation. <\/span><\/p>\n

Wholesale and retail trade<\/span><\/i> is still a relatively large industry in London in terms of it\u2019s share of labour demand. Industries like this which make up a large share of employment and offer work across the skill and earnings spectrum still have importance in providing work for a large number of people, but in order to boost a city\u2019s productivity there needs to be more of an offering of high quality, high skill jobs as well.<\/span><\/p>\n

Table 3: Relative demand for top hiring industries, Greater Manchester vs London<\/h2>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Top hiring industries in GM<\/strong><\/th>GM relative demand<\/strong><\/th>London relative demand<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Wholesale and retail trade<\/td>18.50%<\/td>11.30%<\/td>\n<\/tr>\n
Professional, scientific and technical activities<\/td>13.60%<\/td>15.00%<\/td>\n<\/tr>\n
Human health and social work activities<\/td>10.70%<\/td>10.20%<\/td>\n<\/tr>\n
Financial and insurance activities<\/td>10.10%<\/td>14.20%<\/td>\n<\/tr>\n
Accommodation and food service activities<\/td>9.90%<\/td>11.60%<\/td>\n<\/tr>\n
Information and communication<\/td>8.10%<\/td>8.30%<\/td>\n<\/tr>\n
Arts, entertainment and recreation<\/td>4.20%<\/td>4.80%<\/td>\n<\/tr>\n
Construction<\/td>3.80%<\/td>3.70%<\/td>\n<\/tr>\n
Education<\/td>3.70%<\/td>3.50%<\/td>\n<\/tr>\n
Administrative and support service activities<\/td>3.60%<\/td>4.40%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Looking at the prevalence of \u2018gold star\u2019 skills (again, those that are highly demanded and high paying) further highlights this point. <\/span><\/p>\n

Below we look at the skills that pay above median salary across the UK, and from this we look at the top ten in demand with levels of demand above the 90<\/span>th<\/span> percentile (we do this slightly differently to before as there are more than 16,000 skills in our skills ontology, a large number of which are quite niche but pay very highly). For all of these skills except <\/span>construction<\/span><\/i>, these \u2018gold star\u2019 skills are more highly demanded in London than in Greater Manchester. <\/span><\/p>\n

The composition of skill demand is of course linked to occupations and industries prevalent in each area, but it may also reflect the issue highlighted by the Independent Prosperity Review and other organisations – that GM\u2019s workforce needs to be upskilled.<\/span><\/p>\n

Without a workforce with the right skills, employers hiring for high productivity jobs aren\u2019t going to look to recruit in Greater Manchester.\u00a0<\/span><\/p>\n

Table 4: Demand for 'gold star' skills, Greater Manchester vs London<\/h2>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
\u2018Gold star\u2019 skill<\/strong><\/th>GM relative demand<\/strong><\/th>London relative demand<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Leadership<\/td>8.30%<\/td>11.60%<\/td>\n<\/tr>\n
Expertise<\/td>7.80%<\/td>11.80%<\/td>\n<\/tr>\n
Budgets<\/td>7.40%<\/td>9.80%<\/td>\n<\/tr>\n
Strategy<\/td>6.90%<\/td>12.00%<\/td>\n<\/tr>\n
Consulting<\/td>7.50%<\/td>9.50%<\/td>\n<\/tr>\n
Project Management<\/td>5.30%<\/td>8.20%<\/td>\n<\/tr>\n
Analysis<\/td>5.40%<\/td>8.30%<\/td>\n<\/tr>\n
Construction<\/td>4.70%<\/td>4.40%<\/td>\n<\/tr>\n
Collaboration<\/td>4.20%<\/td>7.20%<\/td>\n<\/tr>\n
Accounting<\/td>3.90%<\/td>4.80%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Conclusions<\/h3>\n

Its not all doom and gloom for Greater Manchester\u2019s labour market however \u2013 year-on-year growth in listed salaries was 7.8%, much higher than that in London (3.0%).\u00a0\u00a0<\/span><\/p>\n

And flexible workplace models are more commonly more available for vacancies in GM (23.8%) than they are in London (20.5%), which as we outlined <\/span>in a previous blog<\/span><\/a> is key to increasing employment and maximising the usage of skills through inclusive recruitment.<\/span><\/p>\n

Overall though, for an area like Greater Manchester to be able to increase its productivity and close some of the gap between it and London, there need to be more high quality job opportunities available to retain and attract skilled workers in the area.<\/span><\/p>\n

Want to get data insights to help you make more informed decisions?\u00a0Speak to our Adzuna Intelligence team.<\/a><\/span><\/div>\n
\n

\"\" Read more: <\/strong>Using our \u2018Time to fill\u2019 data to track supply and demand for jobs<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It is fair to say that the UK economy has not been in great shape in recent years. Growth has been poor since the financial crisis, and inequality has remained high, with poor labour productivity a factor behind both of those issues. In this blog, we look at the productivity gap between second city Greater Continued \u00bb<\/a><\/p>\n","protected":false},"author":51,"featured_media":19702,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1168],"tags":[1190],"class_list":["post-19700","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-adzuna-intelligence","tag-economy"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/19700","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=19700"}],"version-history":[{"count":6,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/19700\/revisions"}],"predecessor-version":[{"id":19933,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/19700\/revisions\/19933"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media\/19702"}],"wp:attachment":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=19700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=19700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=19700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}