The UK job market is showing signs of recovery as Christmas hiring activity picks up, with annual salary increases reaching their highest level in three years, recent statistics reveal.

Last month, the average advertised salary in the UK rose to £39,234, marking a 6% increase from the previous year and the most significant jump since April 2021.

This salary growth is occurring amid intensified competition among job seekers. The labour market recorded 861,000 job vacancies at the end of October, according to the job search platform Adzuna. This represents a 0.17% decline compared to September, leaving 2.08 job seekers for each vacancy, the highest ratio seen since June 2021.

Andrew Hunter, co-founder of Adzuna, noted that despite a challenging start to 2024, the latter half has shown improvements and resilience.

“This October, we registered the first positive change in vacancy numbers over six months,” he explained. “The bustling Christmas shopping season has pushed sectors like trade, construction, and retail to increase hiring efforts.”

Currently, job postings on Adzuna have an average duration of 39.5 days, indicating a more difficult landscape for job seekers.

British businesses are now grappling with both rising salary expectations and increased national insurance costs. The government announced a 1.2 percentage point hike in employer National Insurance Contributions (NICs) to 15%, effective April, alongside a reduction in the earnings threshold for contributions from £9,100 to £5,000.

The retail sector, which employs a significant number of low-wage workers, is anticipated to be particularly affected by these changes.

Despite this, Christmas hiring spurred a noticeable increase in job vacancies in the trade and construction sectors, with new job postings rising by 8.6% in October. The retail sector saw a 6% increase, while hospitality and catering and travel sectors experienced 1% growth each.

In contrast, the sales sector faced the most significant challenges, with job postings plummeting by 9.8% last month. However, compared to six months ago, sales job advertisements are still up by 6.5%. IT-related positions fell by 9.6%, and job adverts in the energy, oil, and gas sectors dropped by 8.4%.

A separate report from PwC revealed a notable rise in “green” job advertisements, defined as positions focused on environmentally friendly products, services, or processes that reduce carbon footprints and resource consumption.

PwC’s findings indicate a 9% increase in green job listings over the past year, with a remarkable 30% surge in London, leading to a total of 58,500 green job adverts. Scotland boasts the highest percentage of green job postings, with 5.6%, equating to 28,700 vacancies.

Carl Sizer from PwC commented that the growth in green job opportunities, amidst a contracting overall job market, highlights the rising demand for green skills. “This demand is a positive indication of intent and opportunity as the UK moves towards net zero, but it also points to a shortage of green skills,” he stated. Sizer warned that as the government sets more ambitious targets for clean energy by 2030, the challenge of skilling up in green sectors will only intensify.