UK industry salary and benefit trends for 2023

Key takeaways

• The average salary grew by 4.2% in 2022, compared to 2021
• Over two-thirds (68%) of workers are satisfied with their salary
• Over 1 in 3 (37%) are looking to change jobs, with pay front of mind
• Those open to changing jobs expect an average pay rise of 14.8%
• 44% of workers want flexible working hours, followed by bonuses and additional paid holiday
• Over two-fifths (41%) willing to skip a pay rise to get their most desired benefit

Covid-19, Brexit, & the cost of living affect the talent market

Over the past year, the rising cost of living, Brexit, and the residual effect of Covid-19, have greatly impacted the labour market. Skill shortages remain, though hiring continues to be robust, with fierce competition for talent across many industries.

Compensation packages are front of mind for workers as high inflation rates impact UK households. Employers are recognising this as they strive to differentiate themselves from their competitors.

Although economic uncertainty prevails, the labour market has begun to normalise after Covid-19. This is particularly prevalent in industries such as Hospitality, Sport and Fitness, Retail, Logistics, Cleaning, Travel and Healthcare, depicted by steep changes to candidate activity and vacancies.

Brexit is also having a large impact specifically on more manual sectors, such as Cleaning, Logistics and Skilled Trades where a high percentage of the workforce are moving back to the EU.

Below, we take a closer look at how these macro trends have shaped pay and benefit packages at an industry level – and what actions you can take to stay competitive in your field.

Salary trends

Across all 30 industries analysed, salaries grew by 4.2% from 2021 to 2022.This increase falls shy of inflation (which sat at 9.2% at the end of 2022), meaning that real wages (or earnings once inflation has been factored in) is in decline. As a result, employees across most industries are feeling the pinch more than ever – although there are some sectors that have avoided this trend.

The top 5 industries to see salary growth:

• Administration saw salaries grow by 10% (the only industry to see growth above inflation – which was 9.2% in December 2022).
• The Skilled Trades saw salaries grow by 9% (with wages likely driven up by demand for skilled talent increasing in this field)
• Social Care saw salaries grow by 9% (as employers upped their salaries to compete for talent)
• Manufacturing saw salaries grow by 8% (with wages likely driven by increased demand for talent due to workers leaving the UK, as a result of Brexit)
• Science saw salaries grow by 7%, (likely driven by the continued impact of Covid-19)

Some of the lowest paying roles experienced the highest salary growth in 2022. This is likely due to the UK increasing its minimum wage, so the lowest paid within industries such as Administration or Hospitality, would have seen moderate or high salary increases.

In some industries, experiencing skill shortages, wages have been raised to attract talent. This is particularly the case for industries affected by Brexit and Covid-19, such as Skilled Trades, Manufacturing and Social Care.

Industries with the highest earning ability

The top 5 highest paying industries across all 30 analysed sectors:

• The IT industry is the highest paying across the market, with the average salary sitting at £47,837.
• The Construction industry, with the average salary sitting at £43,049
• The Finance industry with the average salary sitting at £40,979
• The Banking industry with the average salary witting at £40,867
• The Engineering industry with the average salary sitting at £40,409

These industries tend to be highly competitive or require extensive training, pointing to why salaries are above most of the market. Most of the highest earning industries are office-based roles, except for Construction. This anomaly is likely due to the increase in candidate demand attributed to Brexit, with workers leaving the UK, resulting in skill shortages.

Salary satisfaction

Across all 30 industries analysed, the majority of workers are happy with their pay (68%). The most common reason cited was that their salary allowed them to live comfortably, which, considering the cost of living is particularly valued. This is interesting considering 74% of UK workers admitted they’re concerned about their financial situation as the cost of living rises.

Unsurprisingly, the highest earning industries have equally high salary satisfaction scores compared to the market as a whole. Banking, IT and Engineering, received scores above 78%. Construction and Management received the highest salary satisfaction score (both 84%) across all industries.

The industries with the lowest satisfaction scores are Administration, Science, Social Care, Education and Healthcare. This is likely due to burnout and overworking as a result of skill shortages within these industries, plus most of these sectors average pay is below the market, aside from Science.

Benefit trends

For our analysis we sorted the typical benefits offered by employers into groups: financial, educational, general perks, wellbeing, and work-life balance. By analysing these categories, we can see overall patterns in the types and amounts of benefits provided by employers, indicating where companies can improve their benefits packages for a more well-rounded offering.

The most common types of benefits

The top 3 benefit categories offered by employers:

• Financial benefits (e.g. commission)
• General perks (e.g. free food and drinks)
• Wellbeing initiatives (e.g. mental health support)

Financial benefits are the most advertised type of reward, followed by general perks. This may be due to employers supporting staff financially without offering high pay rises – which can be much more costly.

The most attractive benefits

The top 5 most sought-after benefits according to UK workers:

• Flexible working hours (44%)
• Financial bonuses (37%)
• Additional holiday leave – above what’s legally required (32%)
• Generous pension – above what’s legally required (30%)
• Medical insurance (28%)

Although employers are most likely to offer financial benefits, UK workers are prioritising work-life balance over anything else. In fact, the benefits workers value the most across all industries are flexible hours, generously paid holiday allowances, and bonuses. This is crucial for two-fifths of workers who said they would be happy to skip a pay raise for their most desired benefit.

New benefits on the rise

As a result of Covid-19 and the high cost of living, employers are offering staff tailored benefits to support during this time (e.g. household bill support increasing by 68 fold). Newer benefits, such as hybrid and remote working have also risen sharply and a ‘4 day work week’ has increased by almost 250%. Employers are also beginning to offer more DEI focused initiatives, such as parental support or adoption leave.

Benefit satisfaction

As with salary, the majority (79%) of UK workers are satisfied with the benefit package their employer is offering.

When it comes to awareness, 68% of workers know all the benefits their work offers. The majority (61%) of UK workers also felt the benefits their employer offered helped them improve their work-life balance, and a similar amount (60%) said their work benefits allows them to live a more comfortable life.

There is a growing desire for more inclusive benefits, with 62% of workers wanting their employer to offer a more diverse array of benefits, such as adoption leave or religious holidays.

The importance of salary and benefit benchmarking

These insights paint a picture of an increasingly tight and competitive job market – one where salary and benefits has even more power to make or break a job offer.

How can you ensure that your offering stands out, and you win the people you need? Here’s some of the steps you can take:

• Benchmark your salaries to stay competitive in the market and win the talent you need. Particularly as 57% of jobseekers are looking for a higher salary and those open to changing jobs expect an average pay rise of 14.8%. Find out more on how to benchmark salaries effectively.
• Review and improve benefits to differentiate your offer and best support staff. The majority of workers would take a pay cut to secure their top benefits. Find out more on how to benchmark benefits  effectively.
• Leverage bonuses, one-off payments or overtime where pay rises aren’t viable. 36% of workers are looking for paid overtime, with 22% looking for one off bonuses. Subsidies could also help staff. 27% of workers are asking for subsidies for energy bills when working from home, while a fifth are asking the same for internet costs.
• Safeguard staff mental health and productivity (especially with financial stress on the rise). Only a fifth (22%) of employers offer wellbeing programmes, and a quarter (24%) financial wellbeing advice. Find out more about how to support the mental health and wellbeing of your staff
• Create a compelling brand story to attract the right talent. With 2 in 5 workers (41%) willing to skip a pay rise to get the benefits they most want; how can you ensure your whole offering appeals to the values of a changing workforce? Working with employer branding experts, Universum, we can help you identify where your brand sits in the global market, what your audience is looking for, and how to craft a compelling brand proposition to speak to these varied needs. Learn more about Universum.

For an in-depth view on your industry, read the UK Salary and Benefit guides 2023

Looking for the most recent update for Salary and Benefit guides? Download the 2024 edition below