Two leading forecourt operators are committing to pay staff £12 an hour when the new National Living Wage comes into force in April - 56p more than the legal requirement - citing the need to attract and retain quality employees.
It suggests that many across the industry will settle on this round amount following the introduction of the latest statutory minimum, which is designed to help lower-paid British workers cope with rising bills and is increased every April.
Top 50 Indie Sewell on the go says that with the unprecedented increase in cost of living over the past two years it has budgeted to pay £12 an hour to its 230 retail staff across its 13 forecourts in and around Hull from April.
That is a big jump from the £11.15 the business pays currently, according to its finance director Alex Mortimer. The 7.6% increase is more than two percentage points above the current inflation rate.
However, the company says it needs to make the move to remain as an attractive employer with other companies competing for retail staff. These include discount supermarket chain Aldi, which this month started to pay all staff a minimum of £12 an hour, and £13.55 for workers within the M25. That is actually going beyond what is called the “Real Living Wage” of £13.15 for London recommended by the Living Wage Foundation, and £12 an hour elsewhere.
Alex says that Sewell on the go has always aspired to be able to pay the Real Living Wage and decided to make the commitment this year because of the financial pressures many of its employees are facing.
“The reason we want to pay decent money is that we want to attract talent and we appreciate that it is really tough for staff just now in terms of the cost of living rising with mortgages, food costs and bills increasing,” says Alex. “It’s not a case of them not having money for a holiday, this is really affecting them day-to-day so that they cannot afford the essentials.”
“It is the first time that we have hit the Living Wage Foundation’s recommendation,” says Alex. “We are taking a hit in our budget with the pay increase. We are absorbing some of the cost as we can’t pass it all on to the customer.”
To reduce the impact of the increased wage bill on the business it will be looking closely at its staff rota to make sure that it is operating as efficiently as possible, rather than reducing staff hours. “In a forecourt customer experience is key,” she stresses.
And the business will be working with suppliers to ensure that deliveries are made when expected. “We will be pushing back on suppliers if they turn up on site at the wrong time. We will now say we will not accept the delivery, rather than pulling staff in as we would have previously,” she adds. “They need to make deliveries when we have our staff in place.”
Meanwhile, the Henderson Group too has opted from April to pay its retail staff at least £12 an hour at its 106 company-owned and operated Spar stores in Northern Ireland, which include 84 forecourts. “We are planning to pay from £12 an hour. We want to stay ahead of the National Living Wage and to pay at least £12, and if I can go higher then I will,” says its retail director Mark McCammond. Technology, such as its automatic stock replenishment system, will help it make the savings needed to cover this increased outlay, he says.
Seb Hawtree a partner in the North Dorset family-owned Hawtree & Sons, Riverside, near Gillingham, says that, while the business cannot afford £12 an hour, it recognises that it is going to need to move close to it. “In some areas of the store we will have to go closer to £12 to retain quality staff,” says Seb. “It’s genuinely going to start causing problems for us and I’m particularly concerned when we open a café, which will be more labour intensive than the shop.”
The business has tried to future-proof against increased wage costs, with the introduction of a self-scan fourth till and in the next couple of weeks it is installing an outdoor payment terminal for its fuel bunkering customers so they will not need to queue in the store if they are not making other purchases.
The statutory National Living Wage - a measure set by the government - is currently at £10.42 for those aged 23 and over, and £10.18 per hour for workers aged 21-22. From 1 April, the National Living Wage increases to £11.44. for workers over 21, representing the biggest ever increase in the National Living Wage.
However, it is less than the Real Living Wage, an optional amount recommended by the Living Wage Foundation. Katherine Chapman, the Living Wage Foundation’s director, says that employers that signed up to pay its recommended higher wage have been rewarded with “a more motivated and engaged workforce”.
