UK benefits from Low labour costs

01 January 2000
UK benefits from Low labour costs

The low cost of labour in the UK is giving the hospitality industry a competitive advantage over its international rivals, claims The Horwath Worldwide Study 1996.

Most European hotels - especially those in Austria, France, Spain and Portugal - bear higher labour costs.

Even compared with Singapore, if social security contributions and other related expenses are included, the UK hotel industry spends less on labour as a proportion of sales.

The study says the big variable is social security costs as other payroll-related items such as uniforms, staff meals and accommodation vary little between countries.

Jonathan Bodlender, chairman of Horwath Consulting Europe, said there was a danger that these high payroll-related costs would price European hotels out of the international market.

"European governments impose very high employer costs to pay for their bloated social security system. These costs are causing price problems throughout the industry," he added.

But in the UK there are signs that hospitality employers are being forced to raise wages to cope with the growing level of vacancies in the industry.

The Government's New Earnings Survey for the year to April 1996 shows full-time adult employees in catering occupations saw their wages rise by 5.3% to £195.60 a week, on average.

And the level of vacancies in the hospitality industry also continues to rise. Recent figures from Salary Survey Publications show the number of job adverts in August 1996 was up 29% compared with the same month the year before.

And the Manpower survey of employment prospects shows 51% of employers in leisure expect to increase the level of employment in the three months to the end of December. Just 4% expect to cut jobs.

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking