After analysing the hourly pay of thousands of hospitality workers from the restaurant, quick service restaurant and pub sectors, software provider Fourth found that the average hourly pay of workers aged 25 and above fell significantly between June and November 2018. Wages plummeted from £8.55 to £8.18 before plateauing at £8.16 in December.
This period marked the first time that wages have decreased for such a prolonged period since Fourth started tracking the metric in 2015, with pubs and restaurants driving deflation with slumps as low as 3.5%. The wage deflation was wide, with EU workers experiencing a decrease of 3.3% to a £8.22 hourly wage, while workers from the rest of world took a 2% hit, down to £8.68 per hour. However, British workers were hit hardest, seeing the largest cut of an overall 5% drop in hourly wages from £8.04 to £7.64 in November.
Over-25’s were affected most with figures revealing that that the age group saw a 5% drop in wages compared to the 2.5% fall for those between 21 and 25. The hourly rate stayed relatively flat for workers un 21.
Fourth analytics & insight solutions director Mike Shipley said that the unprecedent hot weather and world cup helped climax inflation during the summer months, however what comes up must come down.
“The hospitality industry has experienced an unprecedented period of labour inflation over recent years, with a combination of factors, including a shrinking pool of workers, particularly in back-of-house roles, along with the fight to attract and retain the best employees, significantly driving up the average hourly wage. During the proceeding months, the average hourly wage has been steadily falling and it now aligns with figures reported during March 2018.”
Despite the fall during the last few months of 2018, the first month of 2019 has generated an acceleration in wages, with the average hourly rate climbing by 22p to £8.38.
“Since we started tracking the average hourly rate, the actual rate has always been tracking significantly ahead of the incremental legislative changes to the national living wage rate. For the first time, the current hourly rate is broadly in line with the new rate due to come into force this April, so it will be interesting to see how the actual figure moves between now and then. We know volatile labour costs are a big issue for our customers, and many of them are deploying our labour productivity solutions to mitigate this.”