The September ONS labour Market statistics focused on the average weekly earnings from June to July 2022. Regular pay growth, excluding bonuses, has grown by 5.2%, but the unemployment rate is up by 3.6%.

Inflation-adjusted real pay has fallen 2.8 percent over the year. This leaves most employers fearing the rising cost of living will push talented employees to seek higher salaries

Chris Lawton, Regional Managing Director at Robert Half, said: “Wages will inevitably continue to rise in the current climate but striking a balance between business and staff needs is vital. Robert Half recognises most medium to large businesses agree that the cost-of-living squeeze has the potential to push employees to seek higher salaries elsewhere if they don’t address it. Retention is key, and if employers aren’t keeping up with rising expenses and adjusting salaries or bonus structure, then they risk losing top talent.”

Employers need to consider two things: upskilling existing staff to tackle recruitment and retention difficulties, and tapping into a diverse talent pool to attract them to your organisation and ensure you become an employer of choice.