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Wage rises cease as businesses struggle

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Published on 23 February 2022

Wage increases amongst blue collar workers have plateaued and some are even reducing, according to a leading recruiter.

The candidate shortage led to higher wages for many workers across multiple sectors, including warehouse work, manufacturing, hospitality and driving.

Employers even raised wages to the same higher levels across the country – meaning the London amount was earned by all staff no matter where they were employed.

But Berry Recruitment says the levels have reached a maximum as businesses can’t maintain the increases.

Some have even lowered rates as a cost-cutting exercise in order that they can continue to survive.

Lee Gamble, managing director of the company that works from nearly 40 locations across England and Wales, said: “We have seen wages rising for several years now.

“Due to the candidate shortage the rules of supply and demand meant employers had to pay more to attract staff.

“This probably peaked in the final quarter of last year, especially as Christmas forced employers to increase wages faster to complete orders.

“But we are now seeing a re-alignment and wages have largely stopped increasing and some have gone down slightly.

“Pay is still much higher than it was a couple of years ago but it is unlikely to rise further in the short term due to other costs.

“Materials and energy prices have rocketed and while companies can’t do much about that, they can reduce their wage bill.

“We are now seeing business go without the staff rather than pay too much.

“While staff are still earning more than they were, inflation means they will soon no longer be feeling the benefit as the cost of living rises.

“On top of wage rises and higher costs, businesses will soon need to absorb large statutory increases in the minimum wage and National Insurance contributions.

“Companies are exploring every possible way they can operate with fewer staff and automation is rapidly coming into the equation.

“The situation is also leading to London flight, with workers moving from the south-east to cheaper areas where they will still find work but where rent and other costs are much lower.”
Wage rises cease as businesses struggle