Eloise’s July 2023 News – UK Jobs Market, Wage Rises Cause Inflation, Office Space Future
Hello and welcome to July
I’ve been wondering what wonderful business and UK-wide themes to put in my intro for a few days now. But the main thing that’s in my head is Lewis Capaldi at Glastonbury. I honestly don’t think he has any idea yet of the enormity of what he’s achieved for diversity and inclusion.
For those not in the know, Lewis is a singer-songwriter, and he was fairly recently diagnosed with Tourette’s Syndrome.
At quite a few of his recent tour dates, he’s been so consumed by physical ticks he’s been unable to sing parts of his songs. He cancelled some of his tour dates leading up to Glastonbury so he could be in the best mental shape possible to help relieve some of his symptoms.
Well, it all became too much for him and there were big parts of his set he wasn’t able to sing. But this is when the magic happened. The entire crowd of 100,000 people sang for him, in support of him, and it was incredibly moving.
He was visibly distraught and said since that he feels he let people down. I think far from it.
Those people had his back. They didn’t mind at all that he couldn’t get his words out. They were there supporting him. There will now be a huge positive knock-on effect for other people with Tourette’s or any kind of speech challenges, as well as for increasing knowledge and awareness.
Lewis isn’t ready yet to realise the positive wave he’s a part of, but I am sure in time he will. Positive impact on inclusion really can come from anywhere.
The UK jobs market
In the May KPMG and REC, Report on the UK Jobs Market, the fantastic glimmer of good news is that for the first time since the end of 2020, we’ve seen the strongest rise in the number of job seekers in the market. And this is the third month running to see positive improvements.
This is great news for businesses recruiting, particularly coupled with the number of available jobs continuing to soften.
Starting salaries was the other main news, with them beginning to show signs of softening. They still rose during May but at the smallest rate in two years.
This has in turn pushed up UK average salaries. In 2022, the average salary for a full-time worker was £33,000 a year, up from £31,285 in 2021. In London, the average annual salary was higher at £41,866, and in the Northeast of England, it was £29,521.
Incidentally, we must tackle the considerable gender pay gap in the UK Jobs Market, which increased to 8.3% for full-time workers in 2022, up from 7.9% in 2021.
In the report summary, it was detailed that ‘rising employment and falling economic inactivity led to a big expansion in the UK workforce in the second quarter of 2023. The demand for labour is continuing to hold up, with high levels of vacancies and rising hiring confidence among employers’.
So, the outlook is positive.
Are wage rises contributing to inflation?
With starting salaries rising month on month and the knock-on effect that has on general pay rises, the question starting to be asked is ‘Do pay rises actually contribute to rising inflation?’.
In March, the CIPD’s quarterly ‘Labour Market Outlook’ reported that 55% of employers said they expected to raise base pay by 5% in 2023, to meet recruitment and retention challenges triggered by the cost-of-living crisis.
Inflation for 2023, has been reported by Statista as being 6.1%. With rates for the end of 2023 are predicted to fall to 3.9%, and then to 2.5% during 2024.
If employers increase salaries by 5%, and inflation is 6.1%, are people are still going to feel it in their pockets? Do rises need to mirror the rate of inflation? Or does this actually contribute to an increased rate of inflation?
This is such a complex subject, and the simple answer is that there is no simple answer.
In general, wage increases can have both positive and negative effects on inflation. According to a February 2023 report by the London School of Economics, public sector rises have been proven to be statistically insignificant to the rate of inflation, but private sector rises have been slightly statistically significant.
But there is more to it than that…
On the one hand, wage increases can lead to higher prices for goods and services. With businesses passing on the higher labour costs to. This can lead to a spiral of rising prices and wages, making it difficult for people and businesses to keep up.
On the other hand, wage increases can also lead to higher demand for goods and services. With people having more money to spend they are more likely to buy more. This can lead to businesses increasing production, which can create jobs and boost the economy.
And fairness of wage increases is also a consideration. Some people argue that wages should be increased to keep up with inflation, regardless of the impact on inflation, as this is simply a matter of fairness. Others argue that wage increases should be based on productivity and value and that wages should not be increased simply because prices are rising.
Ultimately, the decision of whether or not to increase UK Jobs Market wages to keep up with inflation is a complex one that must be made on a case-by-case basis. There is no single answer that applies in all cases to all businesses. There’s a lot to consider.
Temp of the month awards
On a much lighter note, it’s time to submit your temp of the month nominations.
Have you been bowled over by the effort, skills, or commitment, you’ve experienced from one of our temp team?
By nominating a temporary worker, they get the chance to win ‘temp of the month’ and get a thank you gift and certificate from Vanilla and the acknowledgement of their commitment and hard work.
We have two previous TOTM winners to announce, and we’re due to go out this month to thank them in person and take a few pics. We will update you with a double pic next month!
Temporary workers
Which leads us on nicely to reminding you about our temporary workers team and how they can support your business.
It might be you need an extra pair of hands during the main employee holiday season, support with project work, or flexible sickness cover. Our experienced team can help you.
Just get in touch with Jodie to explore your options.
What does the future of office work look like?
With the news that HSBC will be vacating their large Canary Wharf HQ by 2026 and downsizing to smaller offices in central London, what does it mean for office spaces in the future?
The downsizing of HSBC’s headquarters will have a number of implications for the office space market. It will send a signal to other organisations that it is possible to downsize office space without sacrificing productivity or losing people. This could encourage other companies to follow suit, leading to a further decline in demand for large offices.
Or it could lead to a significant change in the way offices are designed and used. With a lot of businesses asking people to work from the office for just a number of days per month, this could mean a move away from traditional desk setups in favour of more open, collaborative spaces. It could also mean a greater focus on office-based amenities and services that support health and well-being.
As more and more companies adopt permanent flexible working arrangements, office spaces will need to become more flexible and adaptable.
Why go into the office to do your Teams calls when you can do that at home? Maybe office time will be more about collaboration and socialisation. Team building over productivity.
As I updated in last month’s blog, I am making these types of changes at our Vanilla office in Market Harborough. Introducing a gym, having smaller meeting rooms, but a larger and flexible main working space to encourage a more sociable style of working when in the office.
I’d love to hear your thoughts on this.
And that’s it for another month
I hope you have a good July and I’ll speak to you again soon.
Our temps do an amazing job for a wide range of clients in the area. They are some of the most flexible and hardworking people and we want to recognise that every month.
So, if you have a Vanilla temporary worker on assignment, or who has just completed an assignment, who you think has gone above and beyond or exceeded expectations in any way. You can nominate them to receive our Temp of the Month Award.
We recruit throughout the East Midlands covering Leicestershire, Northamptonshire, Rutland and the surrounding areas, especially Market Harborough, Lutterworth, Leicester, Corby and Kettering. We help people find their perfect job and match suitable jobseekers with businesses looking to hire the best candidates across our five specialisms – Sales, Marketing, Accountancy & Finance, HR and Office
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