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What Lidl’s Pay Rise Shows Us About the Competition for Staff?

pay rise

Last week, Lidl announced that, as of March next year, all employees outside of London will be receiving a significant pay rise. The new £10.10 entry level wage for all Lidl employees follows Morrison’s pay increase earlier this year, becoming the first supermarket in the UK to pay its staff at least £10 per hour.

The pandemic has left considerable gaps in the retail and hospitality workforce, as many workers who were made redundant or had to take on the stressful impact of being an essential worker during the height of COVID-19 have turned to other sectors for employment. The number of job vacancies across the UK hit 1.17 million in October and has brought a difficult and cut-throat competition for skilled and qualified staff.

The Lidl and Morrison pay rise for entry level staff shows us that employers are starting to make changes to the salaries they are offering employees. Jobseekers are looking out for companies that are transparent about wages in the job advert, that have moved towards a hybrid or flexible working environment and have encouraged a positive and healthy workplace culture where employees can enjoy a good work-life balance.

In the competition for staff, higher salaries and better working conditions are becoming a standard, rather than an exception, and this could leave smaller businesses out of the loop and understaffed as they struggle to compete with the new salaries offered by larger companies.

The staff shortages are putting immense pressure on companies during the Christmas period as the impact hits retail, shipping, transport, and manufacturing hard, making it difficult for businesses big and small to deliver products and services at their usual quality and rate. As businesses across the UK increase wages or offer new perks to attract much needed staff members, where does this leave SMEs that are unable to make these changes due to budget or size?

Businesses are also left to feel the effects of supply chain issues also caused by staff shortages. It has caused periods of panic-buying amongst consumers, particularly during the potential fuel crisis, and has meant that Christmas buying has happened earlier than ever this year, meaning stock that arrives at retail locations late might be left unsold by the time festivities roll around.

We could be seeing a new salary standard for employees, particularly young and newly qualified graduates, but SMEs could find themselves shut out of the labour market.



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