UK average employee salary tracker 2023 Record pay rises across the UK are putting pressure on staffing costs. We track wage growth over the past year to find what a competitive raise is in 2023. Written by Helena Young Updated on 15 August 2023 Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer Direct to your inbox Sign up to the Startups Weekly Newsletter Stay informed on the top business stories with Startups.co.uk’s weekly email newsletter SUBSCRIBE As the cost of living crisis depletes spending power, UK businesses are fattening up staff pay packets in an effort to keep their payroll competitive. But, are the increases too large, or too small?Official data from the Office for National Statistics (ONS) shows that, between April to June 2023, annual growth in regular average weekly earnings (AWE) was 7.8%. This is the highest regular annual growth rate since records began in 2001.Economists say wages are rising too quickly, and will worsen the economic downturn by prolonging inflation. Workers retort that the pace or pay rises must be quickened to prevent a fall in real wages amid rising food, fuel, energy and housing costs.Business owners are caught in the middle of the debate. They must grapple with their own diminished balance sheets, while struggling to meet employee salary expectations that are becoming steadily more unaffordable.Below, we track UK salary growth month-on-month, including regional and industry breakdowns. We’ll help firms take a view on whether to raise wages for their own workforce – and what alternate rewards cash-strapped organisations can offer. Jump to: Average UK salary tracker 2023 Average UK salary: sector breakdown Average UK salary: regional breakdown Can I afford to give staff a pay rise? How to attract and retain staff without raising wages Average UK salary tracker 2023Using the latest labour market statistics from the ONS, Startups has examined how average weekly earnings in the UK have grown since June 2022.Total pay = average weekly earnings including bonusesRegular pay = average weekly earnings excluding bonusesThe data shows that, over the last 12 months, regular pay in the UK has increased from £569 per week, to £613 per week; an uplift of 7.73%.Total pay shows an even steeper rate of growth. Average weekly earnings in this category grew by 8.3% year-on-year (increasing from £612 to £663 per week).The disparity between the growth in total and regular pay is likely a result of today’s challenging economic headwinds.As companies cut down on spending, they are finding ways to reward sales representatives in other ways, such as encouraging employees through commissions.While the rise in total and average pay is certainly not to be sniffed at, neither figure can contend with the rate of inflation, which rose by an average of 8.7% during the same period.Real earnings figures from the Consumer Price Index (CPI) indicate that, between February to April 2023, real total pay fell by 2.1% on the year. Meanwhile, real regular pay fell by 1.7% on the year.The exact figures for average weekly earnings between June 2022 and May 2023 are laid out in the table below:Average weekly total payAverage weekly regular payJune 2022£612£569July 2022£614£572August 2022£618£567September 2022£621£579October 2022£625£583November 2022£628£587December 2022£632£589January 2023£634£591February 2023£640£596March 2023£645£599April 2023£648£604May 2023£651£607June 2023£663£613 Average UK salary: sector breakdownYear-on-year analysis of average weekly earnings in the UK can also be used to unveil the industries which have seen the biggest pay increases since June 2022.Unlike the figures for the UK overall, these indicate that not every employee has enjoyed a boost in earnings.Retail wages fall as high street recovery stallsSellers have been particularly hard hit by the downturn. The data shows that workers in the retail sector have seen a drop of -4.65% in average weekly earnings over the past 12 months.Supply chain woes and a decimated UK high street are just two challenges facing small retailers today. It seems this harsh trading landscape is also eroding small business payroll.Deloitte recently forecast GDP growth in the retail sector to slow to 0.9% in 2023. This is down from 2% in 2022 and 5.9% in 2021. One surprising saviour could be AI for retail, with some experts predicting the technology has the power to turn things around for the sector.Labour shortages drive up wagesOn the flip side, other industries are clearly taking steps to attract and retain talent this year. Boasting the highest average increase in wages are three industries currently plagued by talent shortages: construction, tech, and hospitality.Both the construction and hospitality industries have struggled to find job-ready talent since Brexit, when hiring from abroad became much harder.Earlier this year, a government review found that vacancies were 72% higher in hospitality and 65% higher in construction than they were during the pandemic. This compares to an increase of 42% in the overall economy.Meanwhile, a shortage of in-demand skills for tech roles has left vast hiring gaps across the workforce. As a result, SME growth plans have stalled as they find themselves unable to invest resources into fast-developing areas, such as generative AI.That these sectors are increasing their wages is good news for their employees. But, it also raises questions about how sustainable the wage hikes are for under-resourced industries.Average weekly earnings June 2022Average weekly earnings May 2022% increaseAgriculture, forestry, and fishing£437£4615.49%Manufacturing£655£6925.64%Construction£702£7466.26%Retail trade£408£389-4.65%Transport£635£6766.45%Accommodation and food service£283£3037.06%Information and communication£1,069£1,1134.11%Finance and insurance£1,383£1,372-0.79%Real estate£711£611-14%Professional, scientific and technical£920£9887.39%Administrative£512£5446.25%Education£496£5286.45%Health and social work£506£5386.32%Arts, entertainment, and recreation£447£4613.13%The real (estate) pictureBusinesses in the real estate sector might be dismayed to see a huge decrease in average weekly earnings of 14% in the above table. The industry has been expecting a slowdown for some months following months of record-breaking house prices rises and mortgage rates that have been putting off would-be buyers.Managers can breathe easy; this is more likely a reflection of seasonality in trading. Closer examination reveals June to be an outlier for the industry, as a comparison between July 2022 and May 2023 shows a more digestible decline of 3.96%.Nonetheless, UK house prices dropped at their fastest annual pace for 14 years in July, according to Nationwide. The building society said prices dropped by 3.8%, which is the biggest decline since July 2009, and a call for caution from real estate business owners. Average UK salary: regional breakdownAccording to the ONS findings, every region in the UK has seen a significant pay boost since last June.Unsurprisingly, London tops the list. Workers in the capital now earn, on average, £4,382 a month. That’s almost £2,000 more than the average monthly salary of North East workers, and a 7.85% increase year-on-year.In second place was Scotland, where average monthly wages have increased by 7.44% year-on-year.Analysis of the UK staff turnover rate shows that London is the region with the highest number of job stayers. The areas with the lowest percentage of job stayers are Wales and Northern Ireland – also two of the regions with the smallest increase in wages year-on-year.This suggests that, as households struggle to make ends meet, UK company employees are migrating to the big smoke in order to earn higher wages.London’s wage growth is still below the rate of inflation, however. In fact, while both the government and the Bank of England blame salary increases as a key driver of inflation, no region in the UK has seen their wages increasing at, or above, 8.7%.Average weekly earnings June 2022Average weekly earnings May 2022% increaseLondon£4,063£4,3827.85%Scotland£2,620£2,8157.44%North East£2,372£2,5477.37%North West£2,489£2,6687.19%South West£2,520£2,6997.10%Yorkshire and the Humber£2,390£2,5597.07%West Midlands£2,479£2,6506.89%East£3,001£3,2076.86%East Midlands£2,481£2,6456.61%Wales£2,384£2,5396.50%Northern Ireland£2,310£2,4596.45%South East£3,257£3,4596.20% Can I afford to give staff a pay rise?Placing the highest bid is not the only way to win the war for talent. But there is no denying that salary is an important decision-making factor for job seekers – many of whom will not consider a job advert that doesn’t reflect today’s scaling salary bands.As the ONS data shows, it’s more important than ever to carry out regular pay calculations to make sure your advertised salaries reflect the sector average (also known as industry benchmarking).Our guide to how to pay employees explains how small businesses can go about this. The first step, competitor analysis, will help firms to figure out what rivals are offering for similar advertised positions. That way, managers can rest assured they aren’t accidentally putting candidates off a job opening before it’s even been posted.Against a backdrop of worker shortages, not to do so means companies risk losing out on top talent to rivals – particularly when it comes to fresh talent such as university graduates. How to attract and retain staff without raising wagesIn April, the CIPD’s ‘Labour Market Outlook’ reported that just 34% of employers planned to raise salaries to combat staff shortages. In a previous survey, conducted six months prior, 48% said they planned to raise wages.That more businesses are turning away from boosting wages does not mean they are abandoning their employees to the sharks. Instead, it is likely a reflection of a more tactical approach to supporting workers through the current financial turmoil.Designing a comprehensive employee benefit package can have a tangible impact on staff wallets, without employers having to fork out thousands – even if their cash flow forecast would allow it.Extended maternity leave or enhanced Statutory Paternity Payments can reduce the financial pressure on new parents. Excitingly, small employers can also claim these back from HMRC, so they won’t cost the company a penny.Learning and development courses can also help to fix the skills gap without having to grow headcount. Plus, they’re increasingly sought-after by job seekers.Other policies, like being able to swap bank holidays or work from home, might not directly save workers money. But they will help in other ways, by telling employees that they work for a company that cares about their wellbeing.Read about more than 50 employee benefits and perks to improve staff retention without breaking your business bank account. Share this post facebook twitter linkedin Tags News and Features Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.