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Hourly hospitality pay rates revealed

14 March 2016 by
Hourly hospitality pay rates revealed

Average wages for the lowest paid in the hospitality sector are only just short of the National Living Wage, according to new analysis.

Business management software provider Fourth Analytics, which works with the likes of Fullers, Fairmont, PizzaExpress and Travelodge, has found that over-21s earned an average of £7.04 per hour in October 2015, just 16p short of the new requirements.

Inside the M25, workers were found to be already meeting minimum requirements, with hospitality employees earning an average of at least £7.23 in October 2015.

From April, over-25s must be paid a minimum of £7.20 an hour, a figure that thousands of the lowest paid in hospitality are already close to receiving, according to Fourth Analytics' analysis of wages at hospitality firms it works with.

The figures were collected as the minimum wage rose from £6.50 to £6.70 in October 2015, suggesting hospitality firms are paying 8.3% over the minimum wage.

If the figures are representative, it means hospitality firms are not far off meeting the requirements of the National Living Wage, due to take effect in April.

Mike Shipley, analytics and insight solutions director at Fourth, said: "Our insight suggests the perceived gap between current pay rates and the new living wage is nowhere near as big as some in the industry may think.

"However, it is clear that the hospitality industry is already paying a premium, presumably to compete for the best people, and it's a question of whether operators maintain that premium. If so, we could see hourly rates pushing the £8 mark and beyond, which will also put upward pressure on other more senior pay grades, potentially triggering wage inflation across the payroll at hospitality organisations."

But Shipley warned that hospitality businesses would have to continue to work hard to absorb further jumps in wages if the National Living Wage is to rise to £9 by 2020.

The figures also point to productivity improvements, with sales generated per labour hour increasing from £32.33 to £33.11, in the 12 months to September 2015. This was 2.4% up on the year before.

Shipley added: "The new living wage will inevitably prompt companies to look harder at productivity and efficiency. We are currently working with many different hospitality and leisure companies, looking at these issues and using analysis to drive revenue per labour hour and to identify and eradicate wasted labour hours."

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