The UK Autumn Budget announced increases in National Insurance contributions. Many UK businesses anticipate rising operating costs.
There are many concerns, including potential effects on investment, hiring freezing, restricted salary growth, as well as the risk that jobs will be moved overseas to markets such as the US where business conditions remain more favorable.
Deel is a global platform for hiring and HR. Recent data published by Deel shows that UK salaries have fallen behind US salaries, with the disparity being most pronounced among technical roles. The widening gap in compensation could pose challenges to UK businesses trying to remain competitive in the international market, given new economic pressures.
The UK technical roles are stagnant in terms of salary growth
Deel’s analysis of hundreds and thousands of contracts shows a significant difference in salary growth between the US and UK. In the US, salaries for technical roles have increased by 15 percent over the last 18 months. However, UK counterparts only saw a rise of 3 percent.
This trend is reflected in technical roles, where salaries in the UK are increasing at lower rates or have even declined. UK software engineers, for example, earned an average salary of $123,000 in the past year. This represents a mere 2 percent increase year-on year. US software engineers, on the other hand, saw their salaries rise by 68 percent to an average of $131,000
The average salary for US product managers is now $144,000, while the UK’s has decreased by 10.9 percent. Account executives in the UK earn on average $104,000, a decrease of 5.5 percent, whereas their US counterparts earn $100,000, an increase of 11.1 percent.
Matt Monette, UK country manager at Deel said: “Deel’s data highlights the significant challenges UK businesses face when trying to attract top talent, particularly in competition with US firms who can offer more attractive compensation packages.”
Persistent Gender Pay Gap
The Deel Report identifies positive changes in gender representation in technical roles in the UK. Female representation in these positions has increased significantly. The gender pay gap persists in all markets. Women in technical roles continue to earn less than men.
In the UK women who work in technical jobs earn on average $88,000, while men make $109,000. In the US, women in technical roles earn an average of $128,000, compared to men earning $150,000.
The new Deel data highlights the importance of strategies that are in place to improve pay equity in the UK. This is especially important as businesses prepare for the economic impact of higher National Insurance contributions, and also to retain the best talent in an increasingly competitive environment.
Monette said, “With changes introduced in the Autumn Budget that could increase the cost to hire, it is crucial for UK companies to review their approach to employee benefits and engagement.” We want British companies to remain competitive. This includes their ability to attract and retain top talent in a global environment.
