Special report: UK staff pay climbs nearly 7% amid rising costs and recruitment challenges

England

Across the 20 largest traditional HAs (by number of units), L&Q (which was the second-largest organisation by units managed) had one of the biggest increases in average staff pay of 10.6 per cent to £43,384, while its FTEs decreased by 3.6 per cent to 3,688. Its total number of managed units was up slightly by one per cent to 108,326, resulting in a 4.8 per cent increase in number of units managed per staff member to 29. Total staff costs were up by seven per cent to £198m.

George Whalley, HR director for people operations and business partnering at L&Q, says that the group’s rise in costs was in line with the national growth in pay reported by the Office for National Statistics for the same period (6.7 per cent).

He adds: “The upward trend in national earnings has since continued, with current figures between 7.8 per cent and 8.5 per cent. We’ve identified several reasons for this growth, including the composition of our workforce and increased salary expectations within the labour market, as well as increases in rates of pay, including pay awards to our lowest-paid colleagues of eight to 10 per cent in line with the new Living Wage Foundation rates.”

The new Living Wage Foundation rates rose in October 2023 to £12 (up £1.10) an hour across the UK and to £13.15 in London (up £1.20).

More generally, Mr Whalley says that the recruitment market remains “very challenging”. He adds: “Like other UK employers, we have seen a shortage of candidates in the labour market, which has led to greater competition for talent and an overall increase in salary expectations. We’ve particularly noticed these changes when recruiting for roles in technology, transformation, fire safety and skilled trades, as well as for many finance roles.

“On retention, we saw a rise in voluntary colleague turnover during 2022-23 and this remained higher than normal at the start of the financial year. However, over the last six months, we have seen a marked decrease in voluntary turnover, with our annual rates now at around nine per cent. While labour market challenges persist, we hope these will ease over the next 12 months, as signalled by market indicators.”

The largest HA by number of units, Clarion, saw a 7.6 per cent increase in average staff pay to £43,107 and a total increase in staff costs of 11 per cent to £190.3m. Its total number of units managed was down very slightly by 0.07 per cent to 124,777, while its units managed per staff member had decreased by nearly three per cent to 33.

Sanctuary Housing (the third-largest HA by units) saw staff pay increases of 8.5 per cent to £31,354, while Places for People (the fourth-largest HA by units) saw staff pay rise by 10.1 per cent to £35,739.

Both Riverside and Peabody, which were in the top 20 HA list, completed mergers over the period, which they respectively said was a contributing factor to their rise in staff costs and numbers.

Riverside had an 8.8 per cent increase in average staff pay to £38,037, with a 31.8 per cent increase in staff costs to £181.9m. FTEs increased by 20.6 per cent to 4,121. A spokesperson for the group said: “The contributing factor behind the staff costs and staffing number increases reported in the 2023 financial statements is the merger with One Housing Group which legally became part of The Riverside Group on 31 March 2023.”

Peabody, meanwhile, had an 8.3 per cent increase in staff pay to £41,280 and increases in staff costs of 52.4 per cent to £192m. Staff numbers increased by 38 per cent to 3,876. A spokesperson says: “We pay all Peabody colleagues at least the Real Living Wage or London Living Wage. This resulted in pay awards of circa 10 per cent over the past two years. 

“In 2022, colleagues received a minimum increase of £1,000, and in 2023, every full-time colleague received a five per cent pay award, or a minimum of £2,000. This meant that colleagues earning less than £25,000 received an 8 per cent pay rise. Colleague numbers have increased due to Catalyst joining the Peabody Group and the introduction of our new local operating model.”

Torus was the largest LSVT HA in terms of units held and had a near four per cent increase in staff pay to £34,412. At the same time, its staff costs were up just over four per cent to £58.2m. Its FTEs remained largely unchanged at 1,410 (up 0.36 per cent).

Staff pay was up by 7.8 per cent for Together Housing (the second-largest LSVT HA) to £32,044, while its total staff costs were up 7.1 per cent to £66.2m and its cost per unit was up 6.6 per cent to £1,796.

Aster Group had a significant increase in staff costs of 28.1 per cent to £76.3m. This coincided with a 20.1 per cent rise in FTEs to 1,693. Its staff pay was up 6.7 per cent to £38,206. The group was unavailable to comment when contacted by Social Housing.

Scotland

Out of the four LSVTs in Scotland, River Clyde Homes and Hebridean Housing Partnership had some of the largest decreases in total staff costs, with respective decreases of 10.3 per cent and 20.2 per cent. River Clyde Homes also reported a drop of 3.8 per cent in FTEs to 263.8.

Scotland’s top traditional HAs by units managed included Albyn Housing Society, which had staff pay increases of 8.5 per cent to £38,779. Total staff costs for the organisation increased by nearly 13 per cent to £3.9m.

Elsewhere, noteworthy changes among Scotland’s HAs included West of Scotland Housing Association, which saw a 16 per cent increase in average staff pay to £42,519.

Sanctuary Scotland Housing Association had one of the largest increases in staff costs of 36 per cent to £1.3m, despite seeing a 22.2 per cent decrease in staff pay to £33,548. At the same time, it saw a major increase in FTEs (82.4 per cent) to 31, which would have brought down its pay average.

Wheatley, which is analysed on its own because of its size, had an increase in staff pay of 23.7 per cent to £35,075. FTEs were down marginally to 2,817, while staff costs were up 18.1 per cent to £128.8m.

Wales and Northern Ireland

Out of the five LSVTs in Wales included in the analysis, Trivallis’ average staff pay was up nearly 17 per cent to £33,046, while its FTEs were down by nearly eight per cent to 390.

Hendre had the largest increase in average staff pay of the 20 traditional HAs in Wales: pay rose 34.5 per cent to £24,821. Its staff numbers were down 6.6 per cent to 1,210.

In contrast, Cardiff Community saw one of the highest drops in average pay (18.2 per cent) to £29,066. This coincided with a 31.8 per cent increase in FTEs to 166, which brought down its number of units managed per staff member by 24 per cent to 18.8.

Out of Northern Ireland’s five HAs, Apex Housing Association had the largest increase in staff pay of 10.5 per cent to £26,051. At the same time, it saw a near five per cent drop in FTEs to 667 and a 5.8 per cent increase in staff costs to £22.1m.

Clanmil Housing Association had the largest increase in staff costs of 10.7 per cent to £9.2m. Its FTEs rose by 6.6 per cent to 323, while its average staff pay increased by 3.5 per cent to £23,052.

2024 recruitment landscape

Mr Bird says that staff shortages will continue to cause problems for the sector in 2024.

“85 per cent of hiring managers across social housing said a shortage of suitable applicants will be their biggest challenge when recruiting next year,” he says. “Naturally, with permanent roles becoming harder to fill, departments are more open to onboarding interim and temporary staff to deal with workloads.”

He says the pressure on wages is likely to continue, with Hays survey data showing that 72 per cent of hiring managers intend on raising pay again next year to help support workers with the cost of living.

Beyond that, Ms Patel says that the sector needs to be thinking “more proactively about succession planning and the next generation of workers, and whether we are designing jobs in a way that recognises different generations want different things”.

Methodology

Data represents accounts of the largest HAs according to type of business and country, a total of 176 HAs in the UK by category.

Average pay represents salary and wages, and excludes National Insurance and pension contributions. Average pay is total salaries and wages divided by number of full-time equivalent staff.

Sizeable changes in staff data may be explained by a significant change in the size of an HA, or by an expansion in its activities.

Changes to an organisation partway through a financial year will also affect year-on-year comparisons.

FTE = full-time equivalents

Social Housing has identified seven HAs using the following definition: at least a third of the HA’s turnover is represented by care or supported housing activities. They are: Housing 21, Progress, Johnnie Johnson, Salvation Army, Bield, Hanover Scotland and Trust Housing Association.

These HAs typically employ more staff than would be necessary to manage general needs rental or leasehold units alone. For such HAs, average pay and the number of units per staff member may be lower than average, while total staff costs per unit may be higher than average.

In calculating bottom-line total average figures, data for these seven HAs has been excluded from the calculation in these measures:

• Average pay
• Number of units per member
• Total staff costs per unit

Source: Audited accounts for 2022-23 (2023) and 2021-22 (for 2022)

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