Are Construction Wages in the UK increasing?

Advice Centre

According to the 2022 contractors’ salary survey, ‘workers in every single category and sub-category of the construction profession saw their average wage go up at a national level’.

Between April and June 2022, construction wages increased by 6.3% – the same percentage increase as in the finance sector. In fact, the 6.3% rise in pay was the second highest of most other industries, beaten only by a 7.7% rise in the wholesaling, retail, hotels, and restaurants sector.

What’s influencing the rate increases?

Brexit and the COVID-19 pandemic have been two of the major events that have led to a shortage of construction workers within the UK. With fewer workers available but the same number of jobs open, demand for construction workers has gone through the roof.

Inevitably, as the demand for skilled construction workers has increased, so has competition between construction companies. In order to secure suitable workers, organisations have been forced to increase their rates of pay.

How does inflation impact the rate increases?

Sadly, rising inflation costs mean that essentially, these pay increases are unlikely to be as substantial or as impactful as workers would hope. As the cost of living increases, the rising wages of construction workers may not make a substantial difference to the day to day life of construction workers in the UK.

If we look at the economy as a whole, basic pay rose by 4.7%, but in real terms, this is a decrease of 3%.

How will increasing wages affect the construction industry?

In the past, businesses may have been able to get away with paying less than the going rate. Perhaps that was down to their reputation, the type of job, or simply their location.

Now, that’s just not enough.

Higher wages have become an expectation rather than an ideal, and so businesses that choose not to pay the going rate will struggle to fill their positions. If they do manage to source workers, they are unlikely to be of the calibre they’ve received in the past.

As we move towards 2023, ‘staff shortages and wage inflation are set to become bigger problems than material supplies’.

Even though companies need to increase wages to attract workers, they must be careful not to create a situation whereby new workers are being paid more than existing workers. Instead, companies must also promote other benefits their workers could enjoy, such as ‘flexible working and career progression’ in order to remain competitive.

Why should I have to pay more for construction workers?

Paying more for construction workers is the only way to secure your workforce.

It’s also a way for you to demonstrate that you value skilled workers and understand the importance of each trade. By paying your workers well, you’ll be rewarded with loyalty, commitment, and positive word of mouth endorsements.

The wages you pay your workers are likely to be one of the biggest factors influencing your reputation among workers, and staying on the right side of the wage war will do you well in the long term.

What will happen if I don’t pay the new going rate?

As demonstrated in the article, Trade Pay Rates in 2022: Too low, or just laughable?, bad news travels quickly among construction workers. Social media has helped create communities of construction workers who are quick to judge and unlikely to forget the names of those paying low wages.

Ultimately, if you don’t pay acceptable wages, someone else will. In fact, certain roles are being approached by recruiters and headhunters, and offered up to 25% more than their current salaries.

If you decide not to pay the accepted rate for your construction workers, you simply won’t find the quality of staff you need to complete your projects. Instead, you’ll struggle with high staff turnover, and find yourself reliant on a flaky workforce who won’t commit.

Why is high staff turnover bad for my business?

Being stuck in a never ending recruitment loop is bad for your business for a number of reasons.

When your focus is always on recruiting rather than retaining workers, you’re likely to waste time, resources, and money looking for new staff. Rather than focusing on completing your project or looking for new business, you’ll be too busy making sure your current projects will be completed.

It’s undeniable that high staff turnover is damaging the construction industry.

How can I tell whether I’m paying the right wages for my construction workforce?

At Pier, we pride ourselves on staying on top of market rates. We know what’s reasonable to pay, and we know what our workers expect. Our clients don’t want to feel as though they’re paying above the odds, but your workers need to know that they’re valued. 

Want to know that you’re paying the right amount for your workers? Contact Pier today.

Are construction workers’ wages likely to keep increasing?

As we move towards the end of 2022, the cost of living crisis is going to impact everyone, regardless of sector. With that in mind, it’s important that the increase in worker’s pay continues, and it’s essential that you keep this in mind for the new year.

How can we pay the right wages without losing money?

To make sure you pay the right wages without putting yourself out of pocket, you need a solid workforce strategy. You need to know which workers will add the most value to your workforce, and understand the benefit of temporary workers.

At Pier, our approach for each client is completely bespoke. We’ll take the time to understand who you need. We won’t just start sending you names of random construction workers in the hope that some of them fit the bill. Instead, we’ll source the best workers for the job, and make sure you’re getting value from your investment.

It’s all about a balance in paying the right wages for the right workers.

Rather than paying the wages of dozens of workers who stay for a few months and then move on to a role that’s better paid, we put the hard work in at the start. Once we know the weaknesses within your current teams, we’ll plug the gaps.

Our aim is to find committed workers who will see your project through from start to finish. We know it can be tempting to throw money at an agency for workers who are available the same day, but quality always beats quantity. 

At Pier, we can help you retain a quality workforce without paying over the odds. Get in touch now to find out more.

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