Jansev Jemal, Director of Research and Policy at Pro Bono Economics, said:

“We have now entered the 16th consecutive month of the national pay squeeze, with average earnings sitting 2.5% below their 2021 peak. A further drop in the number of vacancies and an uptick in unemployment suggests a weakening of the labour market. This difficult economic landscape is becoming increasingly challenging to navigate for many – with eight in 10 (79%) charities reporting rising demand across the UK.

“Yet as increasing numbers turn to charities for vital support, many of these organisations are grappling with their own operational challenges. Lagging pay and a tight labour market are fuelling a recruitment crisis in the sector, with seven in 10 (71%) charities reporting difficulty hiring staff to meet rising need.

“The combination of elevated demand and gaps in the workforce is likely to result in burnout among current staff, as well as unmet need across the UK. If the sector is to become more resilient to economic challenges in the future, the issue of pay must be addressed and requires a move towards more sustainable funding for charities’ core costs over the long-term from foundations and major funders.”