Our annual look at what this industry is paying its hourly-paid staff reveals that overall forecourt pay rates have increased by 6.1% in the year to September 2007. The UK national average now stands at £5.59 per hour compared to £5.27 last year. However, behind the average the picture is rather more mixed than usual.
For the 10th year in succession EKW’s PAYEpeople wages service has compiled its report on up-to-date forecourt wage rates. But the critical difference between our report and any other you might see, is that ours is not based on a survey or questionnaire. As one of the largest payroll bureaux in the country, we actually calculate the real pay values from the weekly payrolls we process, which represents data from almost 3,000 individual hourly-paid employees. This data is then sorted by region in order to give some idea of how rates vary across the country:
l top paying region - this year, for the second time in a row, is Greater London at £5.73 per hour, which represents an increase of 5.9% on last year’s rate. In second place is eastern England, which saw a rise of 7.1% (from £5.32 last year to £5.70 this year);
l largest percentage increase in the past 12 months - Wales, showing a rise of 9.1%, from £5.18 to £5.65;
l most variable pay rates - the south west. Average rates in this region were £5.66 per hour, but individual operators rates varied from £4.45 to £7;
l lowest increase in the year - the Midlands. This year’s rate of £5.40 is only 3.3% up on last year. The region has been showing below-average pay growth for several years now and is currently third from bottom of our pay table.
l ’weird but possibly real’: both Northern Irealand (-0.2%) and the north east of England (-0.7%) showed a fall in average rates from last year. Interestingly, both of these regions had shown the largest percentage increases in the 2006 report. However, we must admit that Northern Ireland in particular had a quite low sample size, and should perhaps not be accorded too much weight.
l lowest paying region - strictly speaking this was Northern Ireland at £5.24 per hour, just below North East England at £5.33. However, as mentioned above, while we have some doubt about Northern Ireland, the result from the north east should be reliable.
This year’s overall increase of 6.1% is quite steep when you remember that a year ago we were showing an overall rise of just 2.6% - but perhaps that’s part of the reason. With the sole exception of July 2007, every month from December 2006 to the latest figures from the ONS for August 2007, price inflation has exceeded 4%. In some months earlier this year the monthly rises were approaching 5% - so is it any wonder that pay rates have taken a hike?
Twelve months ago on this same page we wrote: "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." Well, we were slightly out - by 9p an hour. Trying to predict the position a year hence is perhaps more difficult than it’s been in a very long time. The overall global and UK economic outlook is extremely unstable and unpredictable at the moment, not least as the major reserve banks juggle interest rates in an attempt to stave off a global economic downturn. If we ignore the economic picture altogether and just perform a simple trend analysis based on the 10-year history of our own figures, then next year’s figure would seem to be around £5.72 per hour - an expected increase of some 2.3% - but we’d urge you more strongly than ever not to put any bet on that result!
Finally, in case you’ve forgotten, the National Minimum Wage rate is now (from October 1):
l workers aged 22 and over: £5.52 per hour;
l workers aged 18-21: £4.60 per hour.
As ever, compliance is not optional.
If you are interested in seeing the full PAYEpeople 2007 report, or are just curious about how your own site rate compares with others in your region, please visit our website [http://www.payepeople.co.uk] which will, of course, also link you to the rest of EKW’s services.