Our annual look at what this industry is paying its hourly-paid staff reveals that overall forecourt pay rates have increased by 2.6% in the year to September 2006. The UK national average now stands at £5.27 an hour, compared to £5.14 last year.
This is the ninth year that EKW Group’s PAYEpeople wages service has reported on forecourt wage rates and what makes these reports unique is that they are calculated from the weekly payrolls that we process on behalf of hundreds of site operators throughout the UK, totalling more than 4,000 individual hourly-paid employees. This data is then sorted by region in order to give some idea of how rates vary across the country. Here are some of our findings:
- The top paying region this year is Greater London £5.41 per hour, up from fourth place. The annual increase in the Greater London area was 4.3%.
- The largest percentage increase in the year was in Northern Ireland where average rates increased by 9.2% from £4.81 to £5.25. Next was the north east with an 8.7% increase from £4.94 to £5.37, which lifted the area from near the bottom of last year’s pay league into joint second place overall this time around.
- The lowest increase in the year was the south east (excluding Greater London). This year’s rate of £5.31 is only 0.3% up on last year. This follows a similar result last year and has put the south east into mid-table in the national pay league.
- The most variable pay rates were found in eastern England. Average rates there were £5.32 per hour, but individual operators rates varied from £4.44 to £6.73. In a similar vein, rates in the Midlands ranged from £4.38 to £6.50, with the average coming in at £5.23.
Before anyone jumps up to call and tell us that the lower end of our scale is below the current National Minimum Wage (£5.05 for those over 22 years old up to the end of September 2006) - please bear in mind that these figures are averages from each operator. If the operator happens to employ a high proportion of staff between the ages of 18 and 21 (for whom the minimum wage to September 2006 was only £4.25) then naturally the overall rate will be closer to £4.25 than £5.05. More about the minimum wage later.
Without wishing to get too technical, despite the variances highlighted above, there has been a general ’flattening’ of wage ranges around the average value, particularly at the regional level. The main reason for this is the change in how many sites are operated.
Very noticably over the past 12 months, a great many oil-company-owned sites have been consolidated into ’groups’ or ’clusters’ whereby one operator will now typically have six or seven sites under his or her control. Almost inevitably this leads to the payroll being set-up pretty evenly across that ’group’ - with most hourly paid employees offered the same rate regardless of which particular site they happen to be based at.
The annual increase of 2.6% is the lowest that we’ve ever recorded which, on the face of it, seems strange when inflation at the moment is in excess of 3%.
There may be several reasons behind this apparent restraint, one being the ’cluster’ arrangement noted above (perhaps stopping individual sites pushing up each other’s pay costs). Another possibility is the much reported influx of relatively cheap labour from the EU accession states.
Previous experience suggests that years with relatively small increases are almost invariably followed by large rises as pay catches up with prices, and while crystal-ball gazing is a hazardous activity, using the historical data to predict a trend for the next 12 months leads us to suggest that the rates will go up in excess of 4%, to an average of £5.50 by this time next year.
That projected increase will be helped by the raising of the National Minimum Wage from October 1. In case you missed it, the new minimum rates are:
- Workers aged 22 and over: £5.35 per hour.
- Workers aged 18 - 21: £4.45 per hour.
If you are interested in seeing the full PAYEpeople 2006 report, or are curious as to how your own site rate compares with ours in your region, please visit our website -www.payepeople.co.uk.
If you need more personal or technical help you can contact our specialist team on 01942 811767.