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UK – Wages flat-line as technology makes mid-tier jobs redundant: Hays

23 September 2019

Wages in the UK are flat-lining because companies are scrapping mid-tier positions and replacing them with algorithms and cheap offshore labour, according to research from international recruitment firm Hays.

Hays found that with jobs like paralegal work and administration, new technology is making these roles redundant, leaving over-qualified professionals working in lower-tier positions instead.

“This is, in turn, pushing those in lower skilled jobs into underemployment, where they have jobs but do not work as many hours as they would like, leading to lower wages overall,” Hays stated.

Alistair Cox, Chief Executive of Hays, suggested this could be why there has been record employment levels and wage stagnation going hand in hand.

"By and large, workers are drifting down the skill chain and moving into the sorts of jobs that they are overqualified for,” Cox told the Press Association. “That's putting pressure on people with lower level skills.”

"We are seeing policy makers and economists starting to wonder - 'hmm. Wage stagnation has gone on for a long time; skills shortages have been around for a long time. Why hasn't that moved?',” Cox continued.

The report also suggested that the rise of automation could also impact women-dominated professions, especially retail, with huge numbers of jobs going and not being replaced, as warehouses become more automated and self-service checkouts replace manned ones.

To combat wage stagnation, Cox said companies must invest more in training, even if staff leave afterward.

"The sorts of roles we are filling today as a recruiter, particularly in the technology space, those titles did not exist three years ago,” Cox said. “We need to create a society where it's perfectly normal that you will continue upskilling throughout your career. HR will think 'there's no point training these people, they'll be off in two years.' But we need to accept that some people will go but we'll get others with skills."

The latest labour market data from the Office of National Statistics for the three-month period ended  July 2019 showed the UK employment rate was estimated at 76.1%, the joint-highest on record since comparable records began in 1971. At the same time, the UK unemployment rate was estimated at 3.8%; lower than the 4.0% rate last year.

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