What you need to know about the average salary in the UK
At the end of the day, nobody works for free. Even people who love what they do expect to get paid in the end. That’s why it’s important to know what your worth, and what worth your employees are due to them.
Average salary is the mean or average compensation earned by individuals in a particular job role or industry. It is calculated by adding up all individual salaries and dividing it by the number of employees. This figure can be influenced by various factors such as location, experience, education level, and company size.
Here's a closer look at the different factors that influence the average salary in the UK and what they can mean for your business.
Average Salary Based on OMS Numbers for the UK
The average salary for an employee in the UK is £34,963 per year in 2023, a 5.8% increase over the previous year. The Office for National Statistics reports that the median weekly earnings for full-time employees in the UK was £682 in 2023.
Understanding these average salary figures is pivotal for setting benchmarks in salary negotiations, ensuring that your business stays competitive while your employees are failure compensated. Setting a fair wage based on these averages helps you attract the best talent and make sure they stick around.
Average Salary Based on Gender
Men earn an average of £35,256 annually against £29,842 for women. That is a gender pay gap of £5,414.
As a nation, we have a fair way to go before we achieve economic parity between genders. Small businesses have an ethical prerogative to close this gap and ensure fair workplace practices. It's also an opportunity for growth, to analyse your wage structures and address any disparities.
Average Salary Based on Profession
UK technology professionals earned around £44,733 in 2023 due to high demand and specialised skills, with other sources claiming it’s higher. Financial services have a median annual gross salary of £50,510. Healthcare professionals, especially those with specialised skills, also receive competitive pay, averaging £32,194 annually.
These insights assist businesses in setting salaries and equip job seekers to negotiate better. Understanding these benchmarks helps companies adhere to fair salary practices, industry standards, and workplace fairness.
Average Salary Based on Location
The disparity in average salaries across the UK is a clear indicator that location plays a pivotal role in compensation benchmarks.
London boasts the highest salary ranging from £39,886 to £67,040 per year, a figure that underscores the economic prosperity of the region. Following closely are the South East and Scotland, with annual averages of £36,560 and £35,518, respectively.
On the opposite end of the spectrum, regions such as the North East and Northern Ireland present lower averages, hovering around £31,200 to £32,900. This variation highlights the importance of geographical considerations in crafting competitive and fair salary structures, empowering businesses to attract talent efficiently and equitably.
This information should tell you to adjust your compensation packages based on location and cost of living, in light of these disparities.
Factors Influencing Your Salary
Beyond basic factors like age, gender, job, and location, various elements shape individual salaries. Education level and specialised skills are crucial, often leading to higher pay due to demand in growing fields:
- Sector-specific demand is key; sectors lacking skilled workers offer attractive salaries to attract talent.
- Negotiation skills are vital; those who highlight their value and negotiate well tend to earn more.
- Economic conditions, like inflation and job market health, affect salary levels, showing the many factors influencing income.
To benefit from these insights, employees should seek continuous professional development to enhance their marketability. Knowing the value of their skills and refining negotiation abilities are crucial for successful salary discussions.
Seek to craft competitive salary packages that recognise employees' worth.
Understanding and Addressing the Gender Pay Gap
The gender pay gap is a significant issue in the workforce, stemming from systemic inequalities. Factors like industry imbalances, varied work experience, and career interruptions for caregiving create a complex challenge. To address this, conduct pay audits, use transparent pay scales, and foster an inclusive culture for career growth regardless of gender.
Empowering employees and promoting equal opportunities for advancement are essential to creating a more equitable workplace. By acknowledging the pay gap and actively working to close it, companies can showcase their commitment to fairness and support diversity in the workforce.
Setting Fair Salaries Within Your Company
Setting fair salaries within your company is more than just a policy; it's a testament to your integrity and commitment to equity. It requires a comprehensive understanding of industry standards, the roles within your company, and the individual contributions of employees.
To ensure fairness and transparency, establish clear criteria for salary levels based on role, experience, and performance. Regular salary reviews are crucial. They allow you to adjust compensation in line with market changes, individual achievements, and the overall success of the company. This process must be transparent, empowering employees with the opportunity to understand and discuss their compensation.
Strive to make your compensation practices accurately reflect your dedication to fairness and equity. This approach not only fosters a positive work environment but also boosts employee satisfaction and bolsters your reputation as an equitable employer. Commit to fairness, and the dividends will pay off in loyalty, dedication, and the collective success of your team.
At Charlie, for example, we do this by running a benchmark salary exercise each year with a company specialised in the process.
This allows us to reevaluate the salaries we give to our employees, and ensure we give fair compensation based on inflation.
Maybe it's time for you to think about doing the same to create a fair and inclusive workplace.
