Everything you need to know about UK salaries

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If you’re an HR leader setting salaries for a UK tech company, keeping on top of trends and industry averages is essential. Knowing the current state of the market means you can anticipate any changes and decide what to do proactively, rather than making reactive decisions that may not be best for the company or your employees.

Everything you need to know about UK salaries

How the economy is driving change

The economic climate at the moment means many companies are adjusting their budgets to take into account both inflation and market adjustment. In our salary budget mini-report (November 2022), we found that 79% of respondents are planning salary increases for the start of 2023. Just over half of these are making changes to their review processes too.

Some companies are opting to increase the frequency of their reviews. Doing so allows you to react to market changes faster, which makes it easier for you to attract and retain top talent by offering competitive wages that are frequently adjusted.   

Before you start employee reviews, here’s our handy guide to UK salaries. From the average salary to the number of working hours and the gender pay gap, we’ve rounded up everything you need to know. 

The average salary in the UK

The average (or median) salary in the UK is £31,461 per year or £585.50 per week. The mean salary is £36,834 per year or £706.40 per week. The mean is higher because there are a significant number of high-earners, whose salaries pull this figure up. But as a result, this figure isn’t as useful, which is why we always focus on the median salary as our average 

While the average salary works out as an hourly wage of €16.60, it's important to remember that there are significant variations when you consider the industry, job level, location, and differences in gender, age, and education. 

As the industry with the highest wages, finance, and insurance comes out on top, with an average salary of  £43,821. At the lowest end of the scale, employees in accommodation and food services make an average salary of £22,779.  

Regarding occupation, chief executives and senior officials are at the top, with an average salary of £80,232. Hairdressers and barbers are at the bottom, with an average salary of £14,767. 

Education level also makes a difference to a person’s salary, with postgraduates making average wages in the UK of £42,000. This decreases to £34,000 for graduates and £25,000 for people with A levels.

When it comes to employee age, you might expect the general trend of salaries to increase steadily until retirement, but that’s not the case. Average salaries increase from £10,910 for 16 to 17-year-olds until we reach the age band of 40 to 49, where the average salary is £35,904. But from there, salaries start to decrease. For ages 50 to 59, the average salary is £33,231, and for over 60, it’s down to £28,854. 

Location can also make a big difference.

Salaries in London have a significant lead across the rest of the country, at £41,017.

The lowest salaries are in the North East at £27,856, and in Wales at £28,125. It‘s important to remember that the cost of living in certain areas means that a higher salary doesn’t always equal a higher standard of living.

Remote work is also shifting the dynamics of location versus salary. Some employees may now be earning a higher salary even though they’re based in another part of the country with a lower cost of living.

There are also potential cost savings to be made for companies. When hiring top talent from part of the UK with lower average salaries, a competitive offer may still not be as high as if you expected your employees to work in an office in London or the South East.             

The gender pay gap in the UK

While big strides have been made in pay equality, we’re not at parity yet. In the UK, the gender pay gap for all industries sits at around 15%. For startups and tech companies, the gap is quite a bit larger, at 28%. 

A large part of these discrepancies is due to the lack of women in leadership roles.

At the C-suite level, only 15% of positions are held by women. This lack of representation in higher-paid roles pulls down the average salary for women. So while the gender pay gap in the UK is decreasing, there’s a lot more work to be done.

What are some solutions to solving the gender pay gap? 

  • Adjusting your recruitment processes: for a male-dominated field like tech, the majority of applications for open positions will probably come from males. To level the playing field, consider making it clear that you offer benefits like flexible working, part-time hours, or job-sharing. 

  • Setting a clear compensation structure: if you’re not sure what level to set salaries, it can be tempting to look at the competition for ideas or ask candidates about their previous salary. Neither of these strategies helps to drive pay equity. Instead, setting a compensation structure using up-to-date benchmarking data helps establish competitive wages for all employees. 

  • Moving to a pay-for-performance model: instead of expecting employees to request a salary increase (which many women won’t do), shifting to a pay-for-performance mindset helps boost loyalty and trust in addition to letting employees know you value and recognise their hard work.  

Working hours in the UK

In the UK, the average number of worked hours per week is 41.8. This is two more hours than the EU average of 39.9. It’s not as high as in some other countries though—in contrast, the average employee in Columbia works 49.8 hours per week, and employees in Israel work an average of 44.4 hours per week. 

Interestingly, job satisfaction remains fairly constant whether employees are working 40 hours a week, or 60. But once they start to work more than this, satisfaction takes a nose-dive.

What are some factors that influence working hours? 

The type of company an employee works for also makes a difference in their working hours. As an example, let’s look at the Associate job level. For corporates and startups, working hours per week are around average, at 45 and 48 hours respectively. At a consultancy firm, they’re quite a bit higher, at 57 hours per week. For PE/VC firms, associates work the most hours per week, at 63.  

Hours worked per week gradually decrease as employees move through the seniority levels, with Directors and VPs working between 51 to 54 hours. Of course, how many hours an employee works has an impact on their hourly rate. Pay per hour is typically better at PE/VC companies, and worse at consultancy firms. Knowing how this impacts employees can help you set competitive salaries that balance attracting the right talent with respecting every employee’s right to a healthy work-life balance. 

Salary statistics for the UK are great—but for even deeper insights check out the Figures app. Discover detailed salary data broken down into industry, job level, and location to help you set competitive salaries that attract top talent.  

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