A Discussion: Why are Wages Up, but Hire Rates Down?

Wages are on the rise. For a lot of people, that may not match their lived experience, but it is what the statistics imply, particularly in some sectors.

The average wage in the UK has reached £34,493, which seems pretty hefty. Certain sectors, in particular, seem to be seeing a huge spike, with the agricultural industry in particular seeing a 23.3% pay hike. Or, consider the hospitality sector, which is reporting a 13% increase. Part of this can be chalked up to the increase in minimum wage requirements, that’s bound to bring up the average a bit. It’s tempting to assume that this is because the economy is so buoyant, that businesses can afford to throw lots of money around to attract the best talent.

The reality is more unfortunate. In a number of sectors, recruitment is way down, to the point where numerous businesses are struggling to fill roles at all.

Tellingly, the sectors with the highest pay increases are those with the biggest drops in recruitment:

  1. Agriculture (34.5% decrease in applications)

  2. Retail (26.8%)

  3. Hospitality (30.6%)

  4. Social Care (19.9%)

  5. Customer Service (32.3%)

Even if you’re not directly involved in one of these sectors, this pattern is consistent across the UK job market- growth is down across the board. Add to that that if you’re involved in product development, tech or design, you’re industry relies on others being in a healthy state to fuel growth, as they buy and use products, and you have a problem for everyone.


Is this really a problem?

Large businesses are managing this downturn, largely because they are big enough to swallow to lack of employees. It’s not efficient and will cost them money, but hiring for individual roles isn’t going to make or break them. Long term, they’ll start to struggle.

But if you’re part of an SME or a young startup, this is shaping up to be a huge issue. A small business’ future rests on how growth is managed and knowing the right time to bring in new hires. If that process is sluggish it can really harm that growth.

So what is causing this problem?




If you look at some of the sectors that are struggling the most, such as retail, hospitality and agriculture, these are the ones whose futures are most thrown into question by Brexit- with changing regulations, markets and demands. People may not want to get into the hotel business, for instance, if there is to be a marked decrease in EU tourists in the near future.

Worth noting is that many of these sectors require a regular influx of EU Migrants to meet their employment needs, (the hospitality sector, for example, requires about 62,000 per year to meet its current needs), and Brexit has already, understandably, resulted in many leaving, or changing plans to move.

People may not be able to point to these causes and effects to definitively state why they’re not swapping to new industries, or applying to particular ones, but there’s a palpable climate of uncertainty about the future that makes people not want to take risks.


It’s a Climate of uncertainty regarding the future that makes people not want to take risks.”


Adapting to survive

These sectors are also noticeably being disrupted by new technologies, rather than being able to harmonise with them. Between AI Chatbots changing the landscape of retail and the general shifts in e-commerce sectors, traditional businesses are stalling as they try to adapt.

While a lot of these adaptations are necessary for businesses to survive in the current climate, they don’t translate to a lot of confidence among potential employees.


So how do we fix this?

In terms of the grand scale, there’s not a great deal that you can do as an individual small business to counteract the general trends in your industry. But you can account for these trends

Attracting the best (or, in the worst cases, any) talent isn’t just a matter of throwing high wages at the role, it also comes down to a number of other factors.

  • Push Factors are reasons an employee might want to leave their current role

  • Pull Factors are reasons an employee might be attracted to a specific new role

In short: working for your company needs to be a more appealing prospect than staying where they are. We have a number of articles on this very blog that are full of advice for attracting more talent:


Final Thoughts


A culture of uncertainty means there aren’t a lot of factors that are Pushing people away from their current roles. Employees will tolerate a great deal if it means they have a sense of stability. Increasing wages is one way of trying to Pull in new hires, but you need to consider increasing that pull element to make moving sectors or jobs to you even better.

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