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Office of National Statistics (ONS) figures comparing March to May 2014 with December 2013 to February 2014 show that there was a large increase in employment and a large fall in unemployment. The number of people in employment increased by 254,000 (to reach 30.64 million), the number of unemployed people fell by 121,000 (to reach 2.12 million) and the number of people not in the labour force (economically inactive) aged from 16 to 64 fell by 67,000 (to reach 8.78 million).
Additional figures from the ONS, comparing the December 2013 to February 2014 with the same period a year earlier, show that there has been annual growth of 1.7% in average weekly earnings including bonuses (or 1.4% excluding bonus payments). In cash terms, average weekly earnings including bonus payments before taxes and other deductions from gross pay were £479 in February 2014, up from £470 a year earlier. Unfortunately, this was still lower than the average inflation rate for the same period (December 2013 to February 2014), which was 2%. The total for 2013 was 2.5%.
Interestingly and perhaps tellingly, when looking at vacancies for February to April 2013, we see that there were 503,000 jobs advertised, this is the highest number since October to December 2008. With increasing number of roles being advertised and with unemployment falling it is inevitable that skilled labour is going to be hard to come by. Evidence of this has already been provided by the UK Commission for Employment and Skills (UKCES) which highlighted in January 2014, in a survey of 91,000 employers, that one in five vacancies last year were unfilled because of inadequate skills.
In the Legal market, this shortage of skills comes from both demand and a lack of supply. During the economic downturn many law firms reduced their intake of trainees (creating a gap in the pipeline of talent) and/or steered their NQs away from roles in commercial, corporate, commercial property and IT/IP department (meaning top-heavy departments with a lack of junior talent). With economic conditions improving and business sentiment more positive, we are now seeing significant increases in demand from private practice and in-house clients for 1-5 years’ PQE commercial, IT/IP and commercial property solicitors.
The lack of available quality talent has, albeit slowly, begun to create a positive upward momentum on salaries and law firms and in-house clients alike are beginning to offer pay rises to existing staff. Furthermore, it is our experience at BCL Legal that salary increases for lawyers in commercial disciplines are generally above the national average. The fact still remain however, that the largest increases in salary come when moving from one employer to another, tapping into the scarcity of available legal talent to negotiate a better deal.
If you are interested in discussing new career options, or have questions about pay and benefits or the legal market, please contact Craig Wilson or visit our website BCL Legal for further information
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