Pay Review 2022

[NightAndDay]

They will have to as challenging recruitment dynamics affect store operations and the customer experience. We are in an employees markets, meaning just because a role is unskilled does not mean they are easily replaceable. And though Tesco and the competition (not just Sainsbury's) do fluctuate on who has the highest base pay, this is purely down to timings of the pay reviews, for the past few years, Tesco has usually held their reviews in the second half the the year, while the competition typically has it before April and it has been the case that Tesco matches or slightly exceeds what the competition pays (for example, last year Sainsbury's started paying £10 an hour back in February, Tesco started paying £10.10 around July and then £10.40 in November, Sainsbury's now pays £11 an hour). sainsbury's aren't the only ones paying £11 an hour, Tesco has to be seen to be competitive, otherwise the consequences of natural competition occurs and people leave for the highest payer in town.

And type of role doesn't matter as such as any unskilled person can perform it, an unskilled role will be in competition with other unskilled roles across all industries, and if they're seen to offer better compensation, then it just adds to the challenges, add to this the factor that passing a pay rate that's too low will result in not being viable employment in areas which has a higher cost of living, not all of which get location pay.

Tesco has also differentiated between the normal supermarket model and the discounters model, they've failed with Jacks trying to be Aldi, pursuing the discounters model means having fewer SKUs of products, fewer staff that should be on more than the supermarket model and cheaper goods as a result of the bulk buying advantage that comes with having fewer SKU's.

I think it's a bit premature to suggest Tesco is to clone Aldi's operational model for the simple fact that a large proportion of Tesco's customer base choose Tesco for it's varied range of products, alienating this base wouldn't be received very well from a shareholder and commercial perspective.

[randomworker]

Do T really care about the GA rate? Their business model clearly show that GA are unskilled and easily trained. Is there a shortage of this type of employee? And ultimately as we move towards more automation then fewer staff are required and similarly if T move to an Aldi model again fewer staff required. So there's really no need to increase GA pay to attract staff. The only requirement is to stay legal.

Your argument falls apart on that last sentence. Tesco haven't paid the legal living wage since I have started there over 5 years ago. Also they could pay their younger workers the minimum wage but chose not to and pay them more.

Costs and competition will dictate the pay rate within a sector

[NightAndDay]

Tesco will have had to and have done, what you perhaps mean is the independent living wage, which they are edging closer to normalising but still haven't hit it yet, the real living wage is now £10.90, an hour, meaning Tesco will have to offer less than a 5% increase to hit it, when the national living wage has increased by 9.7% and inflation is above 10%, anything less than a 6.5% raise wouldn't be received well by many.

And you are absolutely right about costs and competition dictating pay, anything less than £11 an hour wouldn't be competitive.

[randomworker]

Well hopefully find out in coming weeks and no doubt it will be in the March 3rd pay slip and not the 31st

[barafear]

Do T really care about the GA rate? Their business model clearly show that GA are unskilled and easily trained. Is there a shortage of this type of employee? And ultimately as we move towards more automation then fewer staff are required and similarly if T move to an Aldi model again fewer staff required. So there's really no need to increase GA pay to attract staff. The only requirement is to stay legal.

Your argument falls apart on that last sentence. Tesco haven't paid the legal living wage since I have started there over 5 years ago. Also they could pay their younger workers the minimum wage but chose not to and pay them more.

Costs and competition will dictate the pay rate within a sector

Obviously is your sentence about "Tesco haven't paid the legal living wage" was true, then Tesco would have been prosecuted.
I think N&D cleared up the differential between the NLW (the legal one) and the "Real" living Wage (voluntary) -

I still think that not just T - and probably not just retail - but all businesses will not offer higher wages to attract staff for "unskilled jobs" - the only difference would be workplaces which pay their long standing experienced staff more - T don't do that anymore (except for some small differentials - e.g. Long serving staff get more holiday entitlement - and over the years, some long serving staff have held onto historic premiums for an extended time - e.g. double pay for pre-2005 workers carried on for years whilst the rest of us were on 1.5x - and now currently new staff don't get Sunday/BH premium - whereas existing staff (pre-mid-2022) do (for the moment).

But ultimately, none of the retailers are going to be offering significantly higher than the NLW - I disagree with this "employees" market too - if that were the case, pay inflation would be much higher than it is - and there wouldn't be so much strike action.

[randomworker]

Your original post was saying they only have to pay to stay legal. I pointed out to you that they have paid above the legal minimum so your argument fell apart.

They will pay probably 40p to 60p above the Gov living wage come April 1st. I never claimed that they would pay anything higher to attract new employees. But they will stay competitive with the other supermarkets

[NightAndDay]

It is an employees market, a main driver behind the Low Pay Commissions 9.7% pay hike was because this was the case, usually when they agree on an increase, it's balanced between interests of businesses and needs of employees, the 9.7% rate was because the labour economy is such that unemployment rates are low and despite this, lots of businesses are screaming out for staff, there is a labour shortage in terms that there are lots of vacancies and not enough people to fill them, increasing demand for workers therefore pushing up pay.

And relatively speaking they won't offer high wages for unskilled staff, there are only 3 factors that decide pay at the unskilled level, 1 is what the national living wage is, 2 is how much they can pay and still be viable as a business and the 3rd is what the market rate is for the role. If £11 an hour is paid by at least 40% of the sector, then it's influence is significant enough that it would be the figure that needs to be offered without impacting staff retention and recruitment. (As far as I know, Aldi, Morrisons, Sainsbury's, Lidl and M&S are paying at least £11 an hour, at least from what I know).

Tesco's overheads are big enough that the business viability costs won't be impacted, they've also increased the price of goods above inflation and are in the midsts of restructuring, in likelihood to offset inflation and to remain competitive on all fronts. £11 an hour would be seen as the minimum to be "competitive".

[Seymee]

Tesco will be at £11 at some point this year. Its a given.

[barafear]

Your original post was saying they only have to pay to stay legal. I pointed out to you that they have paid above the legal minimum so your argument fell apart.

They will pay probably 40p to 60p above the Gov living wage come April 1st. I never claimed that they would pay anything higher to attract new employees. But they will stay competitive with the other supermarkets

I wasn't intending to "criticise" your post - or even say that you were "wrong".

In fact, reading your original comment again, I now see what you meant when you said:

"Tesco haven't paid the legal living wage since I have started there over 5 years ago"

Rather than meaning "they have failed to meet their legal responsibility, what you meant (and what the reality is) is "Tesco have paid slightly more than the bare minimum"

So apologies, it was simply misunderstanding your sentence.

To give a bit of background though - I would state that if we look back 7-8 years ago, Tesco (and many others) paid "much more" than the minimum wage of the country (at least 15% more) - whereas now, it's barely 5%.

The NLW has been increased more "vigorously" in the last five years or so - I think our CEO was quoted as saying a year ago or so that our base pay had increased by 29% since 2014 (or something similar) - what he didn't state was that the minimum wage had increased by 41%+

I don't want to get into a debate about why the NLW has been increased by 9.7% either - is it due to this "shortage of staff" that Night&Day refers or is it simply a couple of factors:

1) the rate of CPI inflation - and linked to that, the fact that benefits are being increased by 10.1%. So if the NLW was increased by "only" 5% or so, then the incentive to work is significantly reduced.
2) the "mid/long term aim" is to get the NLW to 2/3 of the median pay across the UK - in order to get to that figure, these increases are necessary.

However, I do agree to a point about any increases being affordable by businesses etc. But not quite sure how much the govt care about that when they allow utility bills to soar by 150%+_

[randomworker]

I may be wrong but I'm guessing that wage rises have slowed in the industry as a whole due to the simple fact that there is no more great wealth left in the industry. Competition and costs have put paid to that and the only way wages will rise is to keep it somewhat above the national minimum wage.

Now the caveat there is if the real living wage foundation starts to pull further away from the Gov living wage. I know Sainsbury has signed up to the real living wage so that will be interesting to watch if it happens.

We certainly do have structural issues within society on our Gov failing to provide the very very basics in living. We certainly can't expect private businesses to step in and do the job of Gov and start paying a whatever wage for individuals life outcomes and failed Gov policies

[NightAndDay]

While the vast majority of benefit claiming low paid workers are subsidised by the government we should expect large businesses to provide the safety net of a living wage, corporate welfare socialism wouldn't work otherwise.

And also:

"The increases announced today will support the wages and living standards of low-paid workers at a time when many are feeling increased pressure from a rising cost of living. They are recommended against a backdrop of a tight labour market where unemployment is at record lows and vacancies remain high as businesses compete to recruit and retain staff.

Bryan Sanderson, Low Pay Commission Chair, said:

The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. For a full-time worker, today's increase means nearly £150 more per month.

The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.

Businesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path.

These recommendations have the full support of the business, trade union and academic representatives who make up the Commission."

https://www.gov.uk/government/news/large-minimum-wage-increases-help-protect-low-paid-workers-living-standards

[randomworker]

The problem is a living wage is unique to the individual person and this is why I don't think it's the responsibility of a private businesses to somehow become a social security net for the citizens of this country.

Tesco is in the business of selling a tin of beans for a profit. With competition and costs determining a wage rate they then can go to the labour market and offer money in exchange for labour. You can have 18yo living at home taking the job or a single parent with 2 kids both being paid equally for the same job.

Tesco can't be expected to step in and support a single parent whose partner buggered off and is living in expensive rented accommodation because the housing market is screwed up. That's is totally wrong and makes the Gov and individual not responsible for their actions.

[NightAndDay]

It fully depends on the tax structures of the country, the UK compared to other countries is a middling-high tax country with low-middle levels of social benefits, it's a lot more complicated than that because of a decade of Tory short-termism resulting in a huge deficit and the need to raise the revenue while only dishing out what is really necessary.

The living wage has a simplistic definition of an hourly sum that meets the cost of living, and by cost of living, they mean the cost of essentials like clothes, food, transport, accommodation and even entertainment. And that figure, which is in my view also overly simplistic, is £10.90, an hour everywhere in the UK (which I staunchly disagree with as I live in an area deemed more expensive than London.) And £11.95, an hour in London (and that's taking into account the increased levels of housing benefit in the area.)

Typically speaking, a country with high taxes would be similar to many European countries, wages are high, taxes are high, but it's very efficient and as a result, a lot of essentials are subsidised, on the other side, we have countries like America, where small statism is the modus operandi, taxes are low, but you pay out of the nose for health insurance, and other essentials, people die of poverty while working full time there.


We are closer to America in many regards, our taxes are higher, but our quality of life is just above America's, we are paid enough to exist and not much else. That's the grim reality, but as long as the government subsidises corporations through low pay benefits and tax breaks, we absolutely should have the expectation of unskilled workers having a living wage.

[randomworker]

Unsure know what you mean by that last statement of Gov subsidies corporations through low pay benefits and tax breaks?

The Gov uses a companies pay roll system to target those individuals where Gov policy has failed and/or an individuals life outcomes.

I don't get any Gov support and I freely chose to change my work/life balance and go for part time hours. My skill level could easily be higher if I applied myself harder and pushed myself up the economic ladder but again I like my work/life balance. Tesco and myself entered a voluntary agreement and it's working great

But hey if a Gov comes along and decides screw it we ain't gonna support individual citizens but instead we will jack the living wage up and put it on the companies to do so then great by me. Hopefully I go up to £15-£18ph and keep my job 

That extra cost of doing business in the UK will be factored in by Tesco and they will decide how best to absorb it.

But make no mistake this issue of a so called living wage being too low is not because of companies like Tesco. It's because of structural issues in society caused by Gov and an individuals lack of responsibility.

[Bobmay]

I would like to tell you that tesco very clearly stated that they want to save billions within three weeks. This isnt rumours but rather what they stated last time when they did cuts in February 2022 last year when they cut nights from multiple tesco stores. Tesco is moving towards working how lidl and aldi do.There focus is to cut down things like nights and either remove them completely or replace with twilight hours.I highly doubt they want people in london getting 15.00 an hour for nights.

I would like to tell YOU that Tesco DID NOT state that they want to save "billions within three weeks" . The actual statement was that they were going to save one billion within three years . You then have the nerve to say "This isnt rumours" .

If you read the article tesco planned on saving billion within 3 years from last year to this year and next year. Meaning they would be more job cuts coming which is what I have been stating. The most obvious is nights in multiple small tesco going.

[Redshoes]

I don't think that there is an obvious option when it comes to cutting hours or roles. I just think that if you have time to pass the day with others and are not flat out you may be impacted regarding changes.
Just a blanket removal of nights in all stores may not be the right thing. The deliveries to all stores need to be revised. If you take in night deliveries but are close to residential areas this may be a bigger impact than some other factors. For a TW fill store the delivery needs to turn up before 1800 for it to be fully worked, in most cases.
If non-food deliveries come in during the night does it have a big impact on shopping trip for customers if it's worked first thing in the morning. This could be a once settled scenario. We are not always aware of other changes/procedures that will be launched at same time or that are on next phase.
There are a huge amount of considerations to changes and what we are not aware of is the plan to deal with them in. We are a TW store, we put on nights for Christmas. We put on nights for rail strikes. We put on nights for known bad weather deliveries, as a Scottish store we do get these. We manage the situation. My store manager asks me if I think nights is needed. As a checkout manager I have an opinion on if it is needed but I accept that we are not always right in the call. I tend to go for nights as I have to live with 10 cages not worked when an early duty next day and nobody to work them.

[NightAndDay]

In a lot of cases, delivery and when delivery is worked is centered around peak trading times, When I used to work nights, even though the workload was such that nights had the highest workload, it made sense from a commercial perspective for grocery to be part of overnight fill with earlies and middles only replenishing top selling lines. Although the lates really didn't do anything, they did have the highest volume of transactions in the day, it's all changed since I've worked there, they now get the lates to do price integrity and more admin, which is fairer.

But I digress, my main point was that if the company is looking at filling at different hours, it may or may not work, they really need to base fill times around when the busiest periods are, messing that up could have a drastic impact on sales and the customer experience.

[NightAndDay]

https://www.theguardian.com/business/2023/jan/18/aldi-increases-pay-for-uk-warehouse-workers-for-third-time-in-a-year

Aldi offering significantly higher rates of pay than Tesco, joining Sainsbury's as part of the minimum £11 an hour club. Over £13 an hour for warehouse workers.

[madness]

Aldi seem to have learned that constantly turning over your workforce is more costly wage increases. Experience is valuable and not having to constantly train newbies saves a fortune.

[randomworker]

https://www.theguardian.com/business/2023/jan/18/aldi-increases-pay-for-uk-warehouse-workers-for-third-time-in-a-year

Aldi offering significantly higher rates of pay than Tesco, joining Sainsbury's as part of the minimum £11 an hour club. Over £13 an hour for warehouse workers.

I'm sure I have seen in the past £13.05ph for a Tesco distribution job, maybe I'm wrong ?

[5fdp]

Yes the dc's get round about that and about 17 pounds for nightshift. They get more for weekends.

[randomworker]

Yeah I thought that plus it also had a bonus payment depending on how good your pick rate was

[jonty]

I'm not sure our store can afford any pay rises this year. Not now they've had video screens installed above several promo ends 

[oldfashionedplayer]

we had those installed a while back, they've turned them off since, so they are saving money for something, doubt its the pay review though 

[Bobmay]

I don't think that there is an obvious option when it comes to cutting hours or roles. I just think that if you have time to pass the day with others and are not flat out you may be impacted regarding changes.
Just a blanket removal of nights in all stores may not be the right thing. The deliveries to all stores need to be revised. If you take in night deliveries but are close to residential areas this may be a bigger impact than some other factors. For a TW fill store the delivery needs to turn up before 1800 for it to be fully worked, in most cases.
If non-food deliveries come in during the night does it have a big impact on shopping trip for customers if it's worked first thing in the morning. This could be a once settled scenario. We are not always aware of other changes/procedures that will be launched at same time or that are on next phase.
There are a huge amount of considerations to changes and what we are not aware of is the plan to deal with them in. We are a TW store, we put on nights for Christmas. We put on nights for rail strikes. We put on nights for known bad weather deliveries, as a Scottish store we do get these. We manage the situation. My store manager asks me if I think nights is needed. As a checkout manager I have an opinion on if it is needed but I accept that we are not always right in the call. I tend to go for nights as I have to live with 10 cages not worked when an early duty next day and nobody to work them.

You have to understand something tesco is no longer about how workers feels rather it is about how much profit they make. If they can save money are able to remove nights they will.  I believe that they wont fully remove nights from every store some will keep them for now while other they will remove completely like small tesco stores. Whole some other they will cut the hours. Also with Tesco introducing the new contract pick fill and serve you will have people filling the shop floor instead of just departments that is why the contract was brought in. Tesco are in profit gsne if they srent profitable having nights and are competing with lidl avd aldi they will remove it.