Have your staff costs increased since the millennium?

Weekly Gross Hourly Earnings Increase

The Office for National Statistics collates a whole host of information across many different areas. A quick browse through the website can give you an insight into the varied nature of the information collated.

The statistics collated on weekly gross hourly earnings across different sectors reveals some interesting information.

If we ignore the ‘Elementary occupations’ figures for Q3 2001 versus Q3 2019 show that the largest hourly percentage increase has been in the ‘Sales & Customer Services sector although it had the lowest but for one hourly rate in 2001 so, a low start point. The sector remains the third lowest paid across all sectors in 2019. Care and Leisure is now the lowest paid sector at £9.58 per hour.

Professional occupations’ had the lowest % increase at 43.87% over the nineteen-year period although don’t feel too sad for them given that the sector enjoys the second largest hourly rate at £20.95. The second lowest increase was ‘Managing Directors and Senior Officials’ at 50.88% since 2001 although they remain the highest paid sector at £22.48 gross per hour.

Overall whilst the lower paid occupations received a higher percentage increase over nineteen years than the two highest, the actual cash differential has grown. ‘MDs and Senior Officials’ earn £12.90 per hour more than ‘Care & Leisure’ compared to £8.97 difference in 2001.

Of course, these figures are averages and take no account of regional variations, but they are a good indicator of industry ‘norms’.

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See below for a summarised version of the survey showing pay increases by sector for 2001 – 2019

For small businesses these figures highlight the fact that even to stand still a business needs to continually grow to cover increasing fixed costs, of which normally staff wages and salaries are a core ingredient.

As Business Mentors we often find business owners are loath to increase their prices but are regularly (and understandably) faced with requests for increased wages and salaries. There is no ‘one size fits all’ solution but we would normally recommend looking at what the competition/industry are charging for their product/services and what they are paying their staff. This will give you a guide to where your sales price and staff costs sit and is a good start point for any business.