The average wage in the UK hospitality industry rose 2.5% in January to £8.84 in response to the government’s new year announcement the National Living Wage (NLW) would increase 6.2% to £8.72 in April 2020, according to statistics from hospitality software provider Fourth.
The figures follow a period from April to December 2019 in which wages remained relatively flat with an average hourly rate for workers aged over 25 of about £8.60 compared with the NLW threshold of £8.21 introduced in April 2019. Since 2016, the hourly wage has been an average 43p higher than the NLW but the figures suggest there could be a sustained period of wage inflation to meet the new legislative threshold in April.
The data also reveals the average wage for over-25s has risen 6% on average each year for the past three years. As of January, the average wage for 21 to 24-year-olds in the hospitality industry is £8.76 an hour – 56p more than April’s new NLW rate of £8.20, while 18 to 20-year-olds earn £8.06 per hour – £1.61 more than the new rate of £6.45.
Fourth vice-president of analytics Mike Shipley said, “Historically, businesses have paid a premium above the NLW to attract and retain the best employees and January’s rapid wage inflation shows this is set to continue in the coming months, where it may rise a further 2% to 3% between now and April as operators continue to seek the best staff.
“The fact unemployment levels are at their lowest since 1970 means demand for quality workers is likely to increase, further inflating wages in a highly competitive labour market. These pressures are likely to be exacerbated by a shrinking pool of workers from the EU. These forces create a perfect storm of spiralling labour costs that will need to be mitigated with end-to-end recruitment and retention programmes alongside smart productivity programmes.”