London has for many years been seen as an unwieldy behemoth of business and opportunities. With higher salaries coming hand in hand with higher living costs and rent, the capital city has long been a source of aspiration as well as frustration.
And the statistics show a London-centricity when it comes to job creation. According to ONS data, one in three jobs created in the UK between 2007 and 2017 was in England’s capital. Of the 2.7 million new jobs, almost 950,000, or 35%, were created in the capital; a job creation rate that outran its population growth.
But is this focus on London as the hub for work and growth a bubble that’s about to burst?
Multiple forecasters have predicted a perfect storm on the horizon, with the convergence of Brexit and the ongoing fall-out from the pandemic taking the golden halo away from the capital city.
With the genie out of the bottle for formerly office-based businesses who can now – at least in theory, if not in practice – source colleagues from anywhere in the world, does this spell the end for London’s traditionally higher pay?
And for workers who’ve seen first-hand the potential hazards of living in close quarters in over-populated cities, will the allure of crowded city living start to fade?
Using our real-time salary benchmarking tool, powered by Salaryboard, we’ve taken a temperature check on what COVID-19 has meant so far to salaries across the UK – and look ahead at what this might mean for the coming years.
- Learn the current market rate for key job roles and locations with the Randstad salary calculator tool.
Drawing on a representative sample covering UK and Northern Ireland, across industries including construction, education, healthcare, accountancy sales and customer service, our research revealed the following:
Overall, London’s salaries have increased
Despite the UK recording a loss of 819,000 paid jobs between February and November, median salary change in our sample pool from Sept 2019 and Sept 2020 was + 5.79%.
Of course, within that there were substantial variations from employee to employee. The London-based business development consultants in the survey saw an average 31% increase, whereas telesales advisors received an average 11% pay cut.
Within the wider context of 2020, the confirmation of growth should be a source of comfort for many. While difficult times are certainly underway, business profitability and associated professional progression is still happening.
Outside of London, the picture is stronger still
The salary calculator data has revealed the average salary change across the UK and Northern Ireland, excluding London, was an uptick of 5.82% between Sept 2019 and Sept 2020.
Surprisingly, the areas that saw the strongest growth in this time period for our sample were all situated in the Midlands and Scotland.
The top three cities for salary growth across the year from September 2019 were as follows:
Birmingham – average 6.24% increase
Edinburgh – average 6.17% increase
Leicester – average 6.15% increase
Regional salary growth like this in challenging times could indicate an investment and a confidence in non-southern areas of the UK. It’s a trend that many forecasters will be watching closely as we move into 2021 and continue to adjust to new ways of living and working.
Both in London and elsewhere, a quarter of candidates expect salary growth
While job precariousness and risk of redundancies have been on the minds of many during 2020, jobseekers are unlikely to accept salary cuts as a result of the pandemic’s financial impact.
In a separate body of candidate research we carried out in early December 2020, 25% of those looking for work had asked for a higher salary during the pandemic.
That’s counterbalanced by just 10% who have reported that the coronavirus outbreak has led to them request a lower salary in their hunt for a new role.
What does this mean for hiring managers in 2021? Simply put: candidates understand that the pandemic will have implications on the roles available, but they’re also cognisant of their own value to companies.
A candidate’s view: Konrad, accountant
Having graduated from a London university before training at an accountancy firm in the city, Konrad had always thought his future lay largely in England’s capital.
Prior to university, Konrad had moved over from his native Poland, and, after five years in the UK, had become a naturalised British citizen.
“I’ve invested a lot in London, from the friends I’ve made to the UK-specific qualifications I’ve gained as an accountant. And I’m grateful for the opportunities I’ve had as a result of being here. Working in the finance industry in the city, I’ve been exposed to great opportunities, both professionally and personally.
“And I strongly feel that London will remain as competitive as it has been over the past decade for the next years to come. Ultimately, when you bring together such a number of people, you encourage competition, which leads to high performance and high salaries.”
A HR view: Scott, technology industry recruiter
Scott, who has worked as a Talent Acquisition Manager for a household name technology brand for the past eight years thinks that for too long London has held all the cards for those seeking to fast-track their careers.
“Perhaps it’s high time for a recalibration, in which candidates and companies can find roles and talent wherever they are in the UK.
“Post-pandemic, I can absolutely see a world in which more colleagues work from wherever they choose in the UK, rendering London less central to how we work.
In my company, we’re investigating ways in which our teams would occasionally come together to meet in person when needed – for key sessions, town halls, or vision days, for example. And we’re looking at setting up smaller satellite desk spaces across the UK so that local teams can meet up easily and London feels less the focus of everything.
This wouldn’t mean London becoming obsolete or prompting a mass exodus to smaller cities across the UK and abroad. It’s more about spreading out the access to opportunities in a way that feels fairer and more accessible.”
