Minimum wage has growing influence in retail sector

PAY DATA

The national minimum wage (NMW) has had a growing impact on the retail sector in 2004, with two-thirds of firms now paying at least £5 an hour to established sales staff, according to Incomes Data Services.

A comprehensive analysis of pay in retailing, drawing on pay data from over 100 companies and covering more than a million employees, shows that while most firms increased basic pay by 2.5% to 3.5% this year, many increased their lowest rates by 7.8% to match or stay ahead of the NMW.

The IDS research found little indication that the minimum wage was having a negative effect on jobs, but rather that employers were reviewing their grading structures and introducing team working and multi-skilling to accommodate the changes.

Key results

median starting rate of pay for point-of-sale staff has moved to £4.87, just above the adult NMW of £4.85
median rate for staff who have passed their induction is £5 an hour
many large firms have moved their lowest rates of pay to £5 an hour to stay ahead of the minimum wage
some retailers have moved their pay review dates to 1 October to coincide with the uprating of the minimum wage.

Consolidation of premiums and allowances

Alastair Hatchett, head of pay services at IDS, said: "A significant finding is that many of the larger retailers have introduced new contracts for their staff which consolidate certain premiums and allowances. They have been seeking to focus on putting more of the reward into basic hourly wages to help keep these rates higher than the minimum wage."

The research shows that higher basic pay rates help in the recruitment of part-time staff, but sometimes this has come from reducing the premiums paid for evening and for weekend working. Students working part-time are attracted to the higher basic rates and do not expect higher rates for working in the evening or on Sundays.

Want to know more?

Title: Pay and Conditions in Retail 2004/05, Incomes Data Services.

Availability: To order your copy contact customer services at Incomes Data Services in London, tel: 020 7324 2599. To find out more about what's in this 112-page report take a look at the contents page, visit www.incomesdata.co.uk/report/retailcontents.htm

IDS is a leading UK information and research service on employment issues, providing a range of publications for employers, unions, government departments and other agencies. To find out more visit www.incomesdata.co.uk

Posted 20 December 2004