New research from the Global Payroll Association (GPA) reveals that the UK continues to experience steady employment growth, with significant gains in various industry sectors. The latest data indicates a 0.8% annual increase in the number of payrolled employees, rising by 241,000 compared to June 2023. This growth, while modest, signifies a positive trend for the UK economy.

Early estimates for June 2024 show that the health and social work sector has witnessed the most substantial increase, adding 161,000 employees over the past year. This surge cements health and social work as the nation’s largest employer, with more than 4.4 million workers, making up 14.5% of the total UK workforce. In contrast, other sectors have experienced mixed results, reflecting the dynamic nature of the UK job market.

In terms of monthly changes, the number of payrolled employees rose by 16,000 from May to June 2024, marking a 0.1% increase. But it’s essential to treat these figures as provisional, as they are likely to be revised with the arrival of additional data next month. Notably, the UK payrolled employee growth for May 2024, initially reported as a decrease of 3,000, has been revised to an increase of 54,000. This revision is due to the incorporation of additional real-time information (RTI) submissions, which regularly update the statistics, reducing the need for imputation.

Median monthly pay has also seen an increase, rising by 3.6% in June 2024 compared to the same month last year. However, this growth appears somewhat understated due to a significant pay settlement in June 2023, which skews the annual comparison. The wholesale and retail sector experienced the highest annual growth in median pay, with an impressive 8.2% increase. In contrast, the health and social work sector saw an 8.2% decrease in median pay, attributed to the high pay settlement in June 2023 for NHS workers.

The GPA’s analysis highlights which industry sectors have seen the most considerable increases in payrolled employees. Energy Production & Supply led the way with a 7.6% annual increase, bringing the total headcount to 113,250. This growth reflects the sector’s robust expansion and its critical role in the UK economy. Other sectors, such as Public Administration & Defense/Social Security (4.2%), Arts, Entertainment & Recreation (3.9%), and Health & Social Work (3.8%), also reported significant annual growth.

Regionally, Northern Ireland recorded the largest annual headcount increase at 2.4%, followed by the East Midlands at 1%. Despite these gains, London and the South East continue to be the largest employment regions, accounting for 14.4% and 14.1% of the UK’s payrolled employees, respectively. These regions remain vital hubs for employment, offering a broad range of opportunities across various sectors.

While some industry sectors have thrived, others have faced declines over the past year. Sectors such as Households & Extraterritorial experienced a 3.5% decrease in payrolled employees, while Accommodation & Food Service Activities and Information & Communication both saw a 2.9% decline. These decreases highlight the challenges certain industries face in maintaining employment levels amid changing economic conditions.

Melanie Pizzey, CEO and founder of the Global Payroll Association said: “The number of payrolled employees is climbing year after year and whilst this is great news for the economy, it places an increasing level of responsibility on payroll departments, their systems and their processes to ensure that everyone is paid exactly what they’re owed precisely when they’re owed it.”

Pizzey also emphasised the importance of robust payroll systems, given the substantial number of individuals on payroll. She noted the need for heightened security to protect against cybercriminals and technical errors, referencing a recent global IT outage that affected payroll systems. “The massive number of people who are currently on payroll also highlights how much care and attention needs to be given to payroll systems to protect them from being hacked by cybercriminals or knocked offline by tech errors, such as the global IT outage we experienced a couple of weeks ago,” she added.

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