UK Business Information / Labour Costs
MINIMUM WAGE
The National Minimum Wage is the lowest rate, set by the government that an employer is legally allowed to pay an employee. The minimum wage for an employee aged 22 or older is £5.80 an hour, although it is set to rise to £5.93 from 1st October 2010. The new rate will cover all employees aged 21 or over.
Workers aged 16 to 17 must be paid £3.57 per hour, rising to £3.64 in October. The development rate of £4.83, covering those aged 18 to 21, inclusive, will rise to £4.92 per hour. The new development rate will only cover only 18 to 20-year olds, as 21-year olds will be covered by the top minimum wage bracket.
A new minimum wage of £2.50 per hour is set to be introduced for apprentices who are either under 19 or in the first year of their apprenticeship.
for more information, visit:
Department for Business Innovation & Skills
ANNUAL SURVEY OF HOURS AND EARNINGS
By far the most comprehensive resource for looking at labour costs in the UK, by region and industry, is the Office of National Statistic's (ONS) '2009 Annual Survey of Hours and Earnings' (ASHE). Its spreadsheets are incredibly detailed and provide a full breakdown of labour costs, not only by industry but also by job title within each industry.
A good ASHE spreadsheet to start with is labour costs by occupation.
This gives an overview of the average wage, across the whole of the UK, for key job titles within the main industries. Once the ASHE page has opened, select the variable you want to investigate from:
- Weekly pay: Gross
- Weekly pay: Excluding overtime
- Basic pay: Including other pay
- Overtime pay
- Hourly pay: Gross
- Annual pay: Gross
- Annual pay: Incentive
- Paid hours worked: Total
- Paid hours worked: Basic
- Paid hours worked: Overtime
The key statistic to look out for on each of the ASHE spreadsheets is the third column, 'median pay'. This is the average labour cost for the variable you are investigating.
For a more detailed breakdown of labour costs look at the 'Government office region by industry' spreadsheet.
The layout is similar but this spreadsheet covers a far more comprehensive range of job sectors and titles and divides them by region, too. As before, click on the variable from the list provided, that you want to investigate and the spreadsheet will load.
COMPARING LABOUR COSTS BY REGION
Another good website for investigating labour costs in the UK is NOMIS. This is a website set-up by the ONS to deal with labour market statistics.
While the data is not as specific as ASHE (ie. no breakdown for labour costs by industry) NOMIS does allow you hone in on labour costs by local authority - a small geographical region run by a local council - instead of looking only at UK regions. It is also much easier to compare average labour costs within a region using NOMIS.
If you already have a specific location in mind for your business, it is best to follow this link.
Select a local authority from the drop-down menu provided, or type your desired location into the search box provided. A page appears with labour market statistics on the following:
- Resident population
- Employment and unemployment
- Economic inactivity
- Employment by occupation
- Qualifications
- Earnings by residence
- Working age benefits
- Jobs (total jobs/employee jobs)
- Jobcentre plus vacancies
- VAT registered businesses
The most important set of statistics here is 'Earnings by residence'. This section gives you a breakdown of the average 'gross weekly pay' and 'hourly pay' for male and female workers in that local authority, in the wider region and in the UK as a whole.
By clicking on the "Compare" link at the top of the 'Earnings by residence' section, NOMIS brings up a list of all the local authorities in that region of the UK, allowing you to compare labour costs in your desired location with other locations close-by. A map is also provided on-screen, giving you a colour-coded breakdown of labour costs across the region.
Alternatively, follow the links below to see a comparison of average labour costs in your desired region:
RISING LABOUR COSTS
To see how the labour costs for each industry have changed over time, look at the Department of Business, Enterprise and Regulatory Reform's (BERR) report, 'How have employees fared: Recent UK trends'.
The report analyses UK labour costs between 1995 and 2005. Page 12: 'Earnings growth by industry and gender' is of particular interest, showing the rises in labour costs for each industry over the 10-year period.
