Thousands of employees across the UK hospitality industry now earn up to 10% above the national living wage (NLW) and the average hourly rate for workers aged 21-24 has hit a recent high of £7.92, reveals figures released by data agency Fourth Analytics.
Data gathered from a survey by Fourth Analytics shows the average hourly pay for thousands of hospitality workers in the UK’s hospitality sector has reached £7.71 for those aged both under 21 and aged 21-24.
Excluding under 21s, the average hourly rate is £7.92, which is 72p higher than the national living wage of £7.20, a new rate introduced in April 2016.
Mike Shipley, Analytic and Insights Solutions Director at Fourth Analytics, said, “With actual pay significantly outstripping the legal minimum for all age thresholds, businesses are clearly expecting very strong employment cost-inflation.”
He added, “Clearly it is difficult to predict whether this momentum will continue, but there’s no sign of levelling off at the moment.
“We expect to see the average rate in hospitality hitting £8 in January in January 2017, and we could well see average rates approaching £8.50 by April 2017. This could see the legal living minimum wage (for over-25s) move up to between £7.50 – £7.65.”
Potential concerns for licensees
The NLW is set to rise again in April 2017. It was first introduced by ex-Chancellor of the Exchequer George Osborne in April and aims to gradually increase to £9 per hour by 2020.
The decision was met with some concern and scepticism by licensees, some of whom expressed fears over the potential need to cut staff and hours to be able to meet the new wage demands.
According to a July 2016 survey by CGA Peach, over half (54%) said the NLW was a positive change for the industry, but a similar number (53%) believed it would have a negative impact on their own businesses.
Only 24% of UK pub and restaurant groups had cut staff hours and 21% had reduced staffing levels, while 31% changed pay structures to reduce differences. In all, 15% had employed more staff under 25.