Would anyone like a sensible discussion about low pay?

[The Byre]

There is a great deal of pain going on in car dealerships right now!

 

[japancool]

As an aside . . . Tesla evidently have some Cash Problems - Deciding to reduce the price in the the UK by £9,000! Quite rightly, those who purchased at the Full Price are a little 'Cheesed-Off!' BMW also took a knock recently too, as numerous Police Forces decided NOT to buy any more! There are problems with the 3.0 Litre Diesel Engine catching fire, which have been unresolved.

Apparently, the new Teslas are going to run entirely off the hubris generated by Elon Musk's tweets.

 

[Bob Morgan]

Apparently, the new Teslas are going to run entirely off the hubris generated by Elon Musk's tweets.

Ah, so 'Hubris' is Polite Term for 'Bullsh1t?'

UK creates world's first tractor that runs on manure

To create the liquefied fuel, the cow manure is sent to a special storage facility...

news.am

 

[IanSuth]

As an aside . . . Tesla evidently have some Cash Problems - Deciding to reduce the price in the the UK by £9,000! Quite rightly, those who purchased at the Full Price are a little 'Cheesed-Off!' BMW also took a knock recently too, as numerous Police Forces decided NOT to buy any more! There are problems with the 3.0 Litre Diesel Engine catching fire, which have been unresolved.

And what is the waiting time

My brother's ModelS is now over 1 year late and in the meantime it has meant his company is paying through the nose for him having gone over the 3 yr lease on his Outlander (stupid car he hates but they are given them for tax reasons)

Not sure what deposit you have to pay as a fleet purchases but i suspect corporate buyers dont like paying for the non arrival of a car

 

[Siobhan-DFH]

It isn't the worker who is being subsidised by the taxpayer, it's the employer.

Years ago, I worked for a tourism company overseas. The majority of its staff abroad were eligible for employee credit because we worked 50+ hours for the equivalent of around £3/hour. No pension contributions. No job security.
Conversely, that company was on a huge spending spree. Expanding into retail, buying up airlines, paying record dividends and salaries to the board.
Meanwhile, the UK taxpayer paid a sizeable chunk of (what should have been) their wage bill.

I'm not opposed to workers on low wages receiving help. I just don't want hardworking taxpayers to be fleeced into supporting the pay of those at the top, towards dividends that wouldn't otherwise be available, or to give bumper pay-offs to venture capitalists behind the scenes.

 

[mikeGary]

@hg5guy - I've heard all this before. I fact I have been hearing that progress and automation will mean the end of work as we know it for decades. No doubt, similar nonsense lead to the Luddite riots in 1811.

AI is not going to replace any workplaces - but it certainly will change many workplaces. Just as steam-driven weaving looms replaced hand looms and tractors replaced horses, so AI will replace boring and repetitive office tasks and free staff up to become more creative thereby more productive.

Work changes and the very nature of work changes. Television did not replace the cinema and there are more films being made today than at any time in history. Tractors did not replace the horse and there are more horses today in the UK than back before the agricultural revolution.

We are in this mess not because of too much automation or global this that or the other, but because governments almost everywhere are in the hands of the dogmatic and the incompetent. That is our fault. We are stupid enough to allow total idiots to run this and most other countries and run the systems within them.

Not just the politicians - the civil servants, the central bankers, these people defend their desks and their wasteful ways. We allowed them to drop the gold standard because we didn't care and we were not paying attention. We allowed them to print money and deliberately create inflation instead of cutting government spending because we didn't care enough and we were not paying attention.

The government does not have to do everything - that is just (1) absurd and (2) wasteful.

The government does not have to care for the elderly or run the health systems. Elsewhere, social insurance run by friendly societies and charities do those tasks better and cheaper than bureaucrats.

But fret not! It's coming to an end soon!

The OBR’s latest forecast is for net debt to reach £2,571bn by March 2023 and to approach £3tn by March 2028. November’s £22bn deficit was £14bn higher than the £8bn deficit reported for November last year and was £8bn more than the previous month (October 2022).

The OBR revised its forecast last month with the Autumn Statement and now estimates that the deficit will reach £177bn for 2022/23.

A debt event horizon looms over this ship of fools. All that fresh borrowing is now index-linked. The more they borrow fresh money into existence, the higher the inflation. The higher the inflation, the larger the deficit, so the more they borrow.

Enjoy the spectacle of the lasting depression - it will bring with it great opportunities for businesses that are quick to react and are prepared for what is to come!

the robot or AI cant replace all jobs but it will replace some of work that has repetitive tasks in it.

 

[Where do we go from here?]

Minimum wages increase the price of goods, and it all nets out. Useless.

 

[Newchodge]

Minimum wages increase the price of goods, and it all nets out. Useless.

Oh dear, what a naive assessment of economics.

 

[Where do we go from here?]

Oh dear, what a naive assessment of economics.

There's nothing more naive and simplistic than believing that higher wages have no consequences.

Higher wages cause inflation; higher wages mean lower-skilled people cannot compete and are priced out of the job market (and lose the ability to gain skills), jobs move offshore, and industry declines.

People like you have a lot to answer for.

 

[IanSuth]

Minimum wages increase the price of goods, and it all nets out. Useless.

If you pay min wage and it goes up by 10% do your other inputs also rise 10% (or less or more) do you raise your prices by 10% (or less or more), do your workers see an overall rise in their expenditure of 10% (or less or more)

That is actually the question

Some of your inputs may rise if they themselves are produced in the UK using uk labour

It is unlikely if you are a profitable company that a 10% rise in hourly labour costs will make you raise your prices by 10% to maintain the same profit.

It is unlikely your staffs entire wages go on goods & services which are directly connected to the cost of labour (for example their gas bill and rent are dependent upon totally different supply/demand calculations not wedded to labour costs)

If you work through that you will see that usually a rise in pay of 10% will not cause economy wide 10% inflation and will leave low paid workers with slightly more £, which they would most likely feel in their pocket and spend in the economy increasing the velocity of money (not being patronising it is just a proven fact that those less well off spend a greater proportion of any effective payrise more immediately whilst those better off on average are more likely to invest it/save it/ squirrel it away which helps the economy less)

 

[Where do we go from here?]

If you pay min wage and it goes up by 10% do your other inputs also rise 10% (or less or more) do you raise your prices by 10% (or less or more), do your workers see an overall rise in their expenditure of 10% (or less or more)

That is actually the question

Some of your inputs may rise if they themselves are produced in the UK using uk labour

It is unlikely if you are a profitable company that a 10% rise in hourly labour costs will make you raise your prices by 10% to maintain the same profit.

It is unlikely your staffs entire wages go on goods & services which are directly connected to the cost of labour (for example their gas bill and rent are dependent upon totally different supply/demand calculations not wedded to labour costs)

If you work through that you will see that usually a rise in pay of 10% will not cause economy wide 10% inflation and will leave low paid workers with slightly more £, which they would most likely feel in their pocket and spend in the economy increasing the velocity of money (not being patronising it is just a proven fact that those less well off spend a greater proportion of any effective payrise more immediately whilst those better off on average are more likely to invest it/save it/ squirrel it away which helps the economy less)

As I said to the OP...

There's nothing more naive and simplistic than believing that higher wages have no consequences.

Higher wages cause inflation; higher wages mean lower-skilled people cannot compete and are priced out of the job market (and lose the ability to gain skills), jobs move offshore, and industry declines.

People like you have a lot to answer for.

You are parroting and not thinking.

Long term, both of your adopted ideologies lead to lower living standards for us all.

 

[Newchodge]

As I said to the OP...

You are parroting and not thinking.

Long term, both of your adopted ideologies lead to lower living standards for us all.

Iif it is wage rises that cause inflation, why was there high inflation when there had not been wage rises?

 

[The Byre]

There's nothing more naive and simplistic than believing that higher wages have no consequences.

There are consequences, but not quite in the manner you may imagine. Let's dissect some of your assumptions -

Higher wages cause inflation;

This is not true - indeed it is a well-known and much-discussed economic fallacy. If the poor have higher wages, they spend that additional income and thereby boost the economy. The multiplier effect for higher wages for the poor is many times greater than for the wealthy.

Remember that inflation is created by governments and central banks issuing more currency than the economy can handle. Giving the poor additional wages can actually help to dampen inflation.

higher wages mean lower-skilled people cannot compete and are priced out of the job market (and lose the ability to gain skills),

This bit is true.

jobs move offshore,

And this bit is true. The better alternative is to automate those low-paid jobs - however, UK industries have shown themselves to be lead by very short-term thinking people who want (or possibly, because of share-price pressure, need) to see instant solutions rather than to go for long term (5 yrs plus) investment. Who the hell needs a robotic sweeping machine for the yard, when we can just give poor old Angus a broom and bucket and £10 an hour?

and industry declines.

The true solution is the restructuring of UK industry - though that is more of a philosophical task than a managerial one. At the moment, UK industry (including the service industries) almost look at P&L results quarter-by-quarter. Ask the average manager where he/she thinks the company should be in 100 years time and they will think you are totally out of your mind to ask such a wild question.

Now ask a Japanese, Chinese or even a German manager and he/she will have an answer. It is a question they have given considerable thought to!

When I was running a trade news agency in Germany, that was the kind of question I would expect our reporters to ask. It was asked of the CEO of Bosch and he not only had an answer, but pointed out that it was a question that Robert Bosch had found an answer to before the war (he made it a not-for-profit charity with only 8% owned by the Bosch family).

When Aldi and Lidl moved into the UK in the 90s, they were following a carefully honed and self-financing campaign plan that they had perfected in other countries and both know where they want to be in 100 years time (in every country on Earth and doing more than just retailing).

When I asked the head of BT where he thought his company would be in 100 years time, he thought it was a silly question. He just shrugged his shoulders and said "Who knows!"

And he was right. BT was then - and still is - a political animal and could be broken up tomorrow, or sold off, or just about anything could happen to it. UK politics likes to interfere in industry where it has no business to stick its nose in.

 

[IanSuth]

As I said to the OP...

You are parroting and not thinking.

Long term, both of your adopted ideologies lead to lower living standards for us all.

The other alternatives(and by the way I do have a degree in economics and 29 year working in recruitment related industry) are that either

A) we go full free market employment, remove protections people sink or swim, companies are free to offer any terms they like and we see if we can compete internationally (Hint we can't places like India & China currently and various African/S.American country's in the near future will always be cheaper to produce in so we would need to be close enough in price to compensate for greater transport costs to have any chance whilst we are in a colder climate (more heating costs) , a more crowded country (road congestion and housing costs) and with less raw materials so we need to buy them in (all mined out in industrial revolution).

B) we ignore the low paid work completely, we outsource it all overseas to those low paying countries and we produce the IP, do the prototyping and produce low volume high value specialist material. A cunning plan except there isnt enough of that to produce the gdp needed by this country (particularly if we lose parts of the City), it needs a highly educated/skilled workforce (and we have been woeful at producing that over the last 50 years) and if you are reliant on international companies making a choice to pay their taxes here because being brutal IP doesnt care where it is licenced from then you have to have low enough CT it is not worth being elsewhere. That reduces govt income and means you have nothing to support the less skilled who now have no jobs (there is a limit to how many trolley pushers the Supermarkets need and even that is a dissapearing job).

The reaction to Liz Truss trying to aim towards the B plan shows you that is not politically acceptable in the UK and neither I believe is A (not least because as soon as you abandon some of the current employment law the withdrawal agreement would allow the UK to introduce tariffs etc on our trade losing any savings and competitive advantage, but also because there would be riots)

Therefore you are starting form a point that this is a fairly centerist country that on average believes in worker protections and some social safetynet. From that starting point you therefore have to look at what will get money flowing around the country as much as possible, you want every £ produced by the govt to produce as much utility as possible as it flows and that means giving it to people who will eat it or even spend it down the pub.

£1 spent in the pub pays wages of bar staff, it pays the dray driver, it pays the brewer, it pays for barley it pays for the barley being transported to the brewery, it pays the farmer all inside the UK (it also pays for diesel for the vehicles and gas for heating the pub and brewery and the fertiliser for the farm which use non uk inputs)

£1 put in the bank does much less for the economy

 

[IanSuth]

There are consequences, but not quite in the manner you may imagine. Let's dissect some of your assumptions -

This is not true - indeed it is a well-known and much-discussed economic fallacy. If the poor have higher wages, they spend that additional income and thereby boost the economy. The multiplier effect for higher wages for the poor is many times greater than for the wealthy.

Remember that inflation is created by governments and central banks issuing more currency than the economy can handle. Giving the poor additional wages can actually help to dampen inflation.

This bit is true.

And this bit is true. The better alternative is to automate those low-paid jobs - however, UK industries have shown themselves to be lead by very short-term thinking people who want (or possibly, because of share-price pressure, need) to see instant solutions rather than to go for long term (5 yrs plus) investment. Who the hell needs a robotic sweeping machine for the yard, when we can just give poor old Angus a broom and bucket and £10 an hour?

The true solution is the restructuring of UK industry - though that is more of a philosophical task than a managerial one. At the moment, UK industry (including the service industries) almost look at P&L results quarter-by-quarter. Ask the average manager where he/she thinks the company should be in 100 years time and they will think you are totally out of your mind to ask such a wild question.

Now ask a Japanese, Chinese or even a German manager and he/she will have an answer. It is a question they have given considerable thought to!

When I was running a trade news agency in Germany, that was the kind of question I would expect our reporters to ask. It was asked of the CEO of Bosch and he not only had an answer, but pointed out that it was a question that Robert Bosch had found an answer to before the war (he made it a not-for-profit charity with only 8% owned by the Bosch family).

When Aldi and Lidl moved into the UK in the 90s, they were following a carefully honed and self-financing campaign plan that they had perfected in other countries and both know where they want to be in 100 years time (in every country on Earth and doing more than just retailing).

When I asked the head of BT where he thought his company would be in 100 years time, he thought it was a silly question. He just shrugged his shoulders and said "Who knows!"

And he was right. BT was then - and still is - a political animal and could be broken up tomorrow, or sold off, or just about anything could happen to it. UK politics likes to interfere in industry where it has no business to stick its nose in.

you posted that whilst i was writing similar less well

 

[Clodbuster]

UK politics likes to interfere in industry where it has no business to stick its nose in.

Politicians, Unions and the media cannot think further than their noses.

 

[Duke Fame]

Thanks.

My 1st question is,

I read a lot of people saying that it is crazy that Universal Credit is used to subsidise low wages.

Do you think it is wrong that Universal Credit is used to subsidise low wages or do you think it is a good idea/system? Edit to add: Or something in-between.

Strictly speaking, I think people should adjust their lifestyle re. kids etc to their earnings, however, I prefer to supplement earnings via employment rather than exclusively via benefits so on balance, i support UC.

 

[Duke Fame]

Different members of staff have different circumstances.

The pay for one member of staff (call them A) may be perfectly acceptable and enough for them to have a very comfortable lifestyle.

They exact same pay for another member of staff (call them B) may mean they are on the breadline and have to use foodbanks and top ups from the state.

Are you saying the pay rate should be determined by person B?

Exactly, the employer does not decide on the employee's lifestyle.

 

[MBE2017]

Strictly speaking, I think people should adjust their lifestyle re. kids etc to their earnings, however, I prefer to supplement earnings via employment rather than exclusively via benefits so on balance, i support UC.

So if say a huge factory closes down leaving 3000 out of work, all the parents should sell at least one kid?

There will always be a requirement for various benefits, but I am surprised many still cannot see UC and WTC hold salaries down, at the employers benefit.

If an employer knows someone will get £5k pa on WTC or UC for instance, if they pay £20k pa for a job, or the employer could pay £25k pa for the same job but the worker gets £0 WTC or UC, which salary do you think the employer is going to offer?

The employer gets a worker for £5k pa less, they are happy. The Gov gets control over another potential voter, they are happy. The worker gets the same, but less of the tax amount to spend on improving the country, whilst so much goes to keeping them trapped on benefits.

The figures are made up but the principle is still valid.

 

[Duke Fame]

The whole point of UBI is that it's universal and not means-tested.

UBI is a strange one, it seems a great idea but I think we've seen the issues where we hear those on strike.

Brexit and the post covid labour supply shortage has pushed up wages at the lower end. A pal of mine who voted for Brexit claims a strong Brexit dividend as the lack of cheap labour has seen his wage increase significantly.

I've heard the nurses on strike quote that they could earn 'only a little bit less' if they took a job at one of the supermarkets without all the stress...of course this would also be without the pension or the job security, early retirement etc but that's another debate.

The problem with the lowest paid getting more money is he middle feel they deserve more and that's going to be an issue with UBI.

 

[Duke Fame]

So if say a huge factory closes down leaving 3000 out of work, all the parents should sell at least one kid?

There will always be a requirement for various benefits, but I am surprised many still cannot see UC and WTC hold salaries down, at the employers benefit.

If an employer knows someone will get £5k pa on WTC or UC for instance, if they pay £20k pa for a job, or the employer could pay £25k pa for the same job but the worker gets £0 WTC or UC, which salary do you think the employer is going to offer?

The employer gets a worker for £5k pa less, they are happy. The Gov gets control over another potential voter, they are happy. The worker gets the same, but less of the tax amount to spend on improving the country, whilst so much goes to keeping them trapped on benefits.

The figures are made up but the principle is still valid.

I get your point but UC doesn’t keep salaries down.

A 23 year old living with there parents can have a decent time on NMW ~£95 a day putting in say 10 hours gives a lot of nights out with disco pills etc. The fact a 23 year old wants to get married, have kids etc, that is not the employer’s look out or responsibility.

I’d prefer a UC system that works and cut unemployment benefits.

If your huge factory closes down leaving 3000 out of work, it suggests that wage demands were too high anyway regardless of any pending kid sales.

 

[Duke Fame]

Absolutely. Provided the employer is paying a reasonable rate, bearing in mind their profit levels.

The profit levels aren't any of the employee's business. The wage paid is the market rate.

Personally, i'd always offer a profit share to employees to incentivise but the business owners take all the risk and should be rewarded first and foremost.

 

[Duke Fame]

No, the pay should be the appropriate rate for the job, bearing in mind the profit level of the employer.

My first para was meant to deal with the fact that different peoples' needs differ.

I'm not sure about profit levels.

If I've invented a new phone that will outsell apple & android, I get together some people to make the circuit boards, assemble and pack. I've paid those guys 50p more than Apple to come to work with me and presumably, they see that as a good deal as they have applied to work for me.

I take the mobile phone world by storm and make a fortune, haven't the employees already seen the benefit by being paid over market rate when the decided to leave Apple etc?

 

[IanSuth]

If your huge factory closes down leaving 3000 out of work, it suggests that wage demands were too high anyway regardless of any pending kid sales.

Not necesarily

Did Honda shut Swindon works due to wages ?

What about British Steel shutting coking works in Scunthope ?

For a large number of industries labour is just 1 factor in profitability, so the demands of the staff are irrelevant

 

[MBE2017]

The profit levels aren't any of the employee's business. The wage paid is the market rate.

Personally, i'd always offer a profit share to employees to incentivise but the business owners take all the risk and should be rewarded first and foremost.

The falicy in this argument is the wages paid are never the market rate, due to the benefits effecting the “market rate.”

Benefits are a necessity, an unfortunate one, but I still maintain employers will take benefits into account when looking at a salary figure, just as the job seeker does as well. I have lost count at the number of people stating they “have” to work x hours a week, to ensure they keep receiving certain benefits. Do I blame them for demanding this? Not in the slightest.

Could anyone suggest an employer does not have the intelligence of the lowest worker? If they take benefit payments into their decision making on what job at what rate for x hours a week to take, why would an employer not consider what lower salary they can offer based on the benefit top ups? Having spoken to thousands of employers over five decades, I know this is a fact. It is just the way things are atm.

Anyway, we will have to agree to disagree.

 

[Newchodge]

I'm not sure about profit levels.

If I've invented a new phone that will outsell apple & android, I get together some people to make the circuit boards, assemble and pack. I've paid those guys 50p more than Apple to come to work with me and presumably, they see that as a good deal as they have applied to work for me.

I take the mobile phone world by storm and make a fortune, haven't the employees already seen the benefit by being paid over market rate when the decided to leave Apple etc?

It depends on your attitude to the role of employees. You only made that profit because of the work of your employees, should they not have some benefot from it?

In addition, you are talking about an extreme example. How about a major supermarket that pays its employees minimum wage while makiing increasingly large profits every year?

 

[Duke Fame]

Iif it is wage rises that cause inflation, why was there high inflation when there had not been wage rises?

I don't think anyone is suggesting that wage increases alone cause inflation. However, wage increases are certainly part of inflationary pressures.

 

[Duke Fame]

Not necesarily

Did Honda shut Swindon works due to wages ?

What about British Steel shutting coking works in Scunthope ?

For a large number of industries labour is just 1 factor in profitability, so the demands of the staff are irrelevant

I was being slightly flippant, factories close for a number of reasons, but usually it does come down to the product being too expensive or not being good enough.

There are a number of factors that contribute to the cost and in highly automated production, labour is a diminishing factor.

 

[Duke Fame]

It depends on your attitude to the role of employees. You only made that profit because of the work of your employees, should they not have some benefot from it?

In addition, you are talking about an extreme example. How about a major supermarket that pays its employees minimum wage while makiing increasingly large profits every year?

As I said in a previous post, I'd usually incentivise the employees via a profit share or other goal-concurrent bonus scheme.

However, "You only made that profit because of the work of your employees" is one way of looking at it, the employees have only got paid in the first place to to my genius in design, inventiveness and marketing prowess + my risk-taking in setting up the business in the first place.

If business owners don't get that premium, they may as well not bother with the risk and work for the local council with a cushy pension and no pressure.

 

[Duke Fame]

The falicy in this argument is the wages paid are never the market rate, due to the benefits effecting the “market rate.”

Benefits are a necessity, an unfortunate one, but I still maintain employers will take benefits into account when looking at a salary figure, just as the job seeker does as well. I have lost count at the number of people stating they “have” to work x hours a week, to ensure they keep receiving certain benefits. Do I blame them for demanding this? Not in the slightest.

Could anyone suggest an employer does not have the intelligence of the lowest worker? If they take benefit payments into their decision making on what job at what rate for x hours a week to take, why would an employer not consider what lower salary they can offer based on the benefit top ups? Having spoken to thousands of employers over five decades, I know this is a fact. It is just the way things are atm.

Anyway, we will have to agree to disagree.

Wages are paid at the market rate as a function of the employees skills and their ability to produce. Wages may well be diminished due to things like staff loyalty or fear of moving etc but in a fully mobile workforce, wages should be at the market rate.

Employers tend to work on the value the employee brings to the table and the amount they can charge in the market. i.e if the labour element of an item is £10 and the margin required is 40%, that element has to be able to achieve 16.66 in the market place.

 

[IanSuth]

As I said in a previous post, I'd usually incentivise the employees via a profit share or other goal-concurrent bonus scheme.

However, "You only made that profit because of the work of your employees" is one way of looking at it, the employees have only got paid in the first place to to my genius in design, inventiveness and marketing prowess + my risk-taking in setting up the business in the first place.

If business owners don't get that premium, they may as well not bother with the risk and work for the local council with a cushy pension and no pressure.

That is true for a small entrepreneurial company but not for a multinational where the R&D dept is staffed by employees as is the marketing department and even the finance dept seeking out funding / finance.

Is Ken Murphy at Tesco or Gerd Chrzanowski at Lidl really the reason for their profits and as such should the majority of the profit bonuses go to them not Brenda Miggins the really friendly checkout lady in Biggleswade ?

 

[Duke Fame]

That is true for a small entrepreneurial company but not for a multinational where the R&D dept is staffed by employees as is the marketing department and even the finance dept seeking out funding / finance.

Is Ken Murphy at Tesco or Gerd Chrzanowski at Lidl really the reason for their profits and as such should the majority of the profit bonuses go to them not Brenda Miggins the really friendly checkout lady in Biggleswade ?

Ken Murphy isn't the owner, merely another employee who's Bonus scheme is a goal concurrent scheme based on the overall business success. I would suggest Brenda Miggins also receives a bonus based on performance relevant to her role.

That said, would you give flirty Brenda less money than surly sharron on the other till who has 55 children to feed?

 

[IanSuth]

Wages are paid at the market rate as a function of the employees skills and their ability to produce. Wages may well be diminished due to things like staff loyalty or fear of moving etc but in a fully mobile workforce, wages should be at the market rate.

Employers tend to work on the value the employee brings to the table and the amount they can charge in the market. i.e if the labour element of an item is £10 and the margin required is 40%, that element has to be able to achieve 16.66 in the market place.

After 27 years in recruitment i disagree

A lot of employers work on "how little can i get away with to staff my company", they dont think Fred brings in £30k of value i will therefore pay him £20k + 5k of costs, they think "Will Fred take £18k, if so I have £2k extra (or £2k to offer someone else to get them).

That is where benefits do depress wages as Fred's ability to accept 18 not 20 is dependant upon a number of factors including benefits and personal outgoings

 

[Duke Fame]

After 27 years in recruitment i disagree

A lot of employers work on "how little can i get away with to staff my company", they dont think Fred brings in £30k of value i will therefore pay him £20k + 5k of costs, they think "Will Fred take £18k, if so I have £2k extra (or £2k to offer someone else to get them).

That is where benefits do depress wages as Fred's ability to accept 18 not 20 is dependant upon a number of factors including benefits and personal outgoings

Some will take that view, I don't think it's the norm.

 

[IanSuth]

Some will take that view, I don't think it's the norm.

I think i have more experience of this than you and more often than not the salary guidance was "as much as it takes and as little as we can get away with".

 

[Duke Fame]

I think i have more experience of this than you and more often than not the salary guidance was "as much as it takes and as little as we can get away with".

You are in recruitment so you may be right but the recruiter is also incentivised to pay as little a recruitment fee so that "as much as it takes and as little as we can get away with" would apply to the first 3 months of the recruitment,

 

[MBE2017]

After 27 years in recruitment i disagree

A lot of employers work on "how little can i get away with to staff my company", they dont think Fred brings in £30k of value i will therefore pay him £20k + 5k of costs, they think "Will Fred take £18k, if so I have £2k extra (or £2k to offer someone else to get them).

A personal example, but one that stuck with myself.

I went for a reps job many years ago as several friends did, this was a large new company recruiting nationwide several positions. My friends and myself all had similar experience, and we all worked for the same company (a competitor) at the time.

Three of us got the job, I however got paid £5k pa more than the other two, plus I got a BMW not a Ford Orion as my company car. I also got my home phone bill paid for, worth £60 a quarter, well, it was forty odd years ago.

The only difference between us at the interview? I lied better about my “salary”, bonuses, and had “hired” the BMW for the day, stating I couldn’t consider moving for a worse car.

Companies obviously try and pay as little as possible when recruiting new staff, they would be stupid to do otherwise.

 

[Duke Fame]

A personal example, but one that stuck with myself.

I went for a reps job many years ago as several friends did, this was a large new company recruiting nationwide several positions. My friends and myself all had similar experience, and we all worked for the same company (a competitor) at the time.

Three of us got the job, I however got paid £5k pa more than the other two, plus I got a BMW not a Ford Orion as my company car. I also got my home phone bill paid for, worth £60 a quarter, well, it was forty odd years ago.

The only difference between us at the interview? I lied better about my “salary”, bonuses, and had “hired” the BMW for the day, stating I couldn’t consider moving for a worse car.

Companies obviously try and pay as little as possible when recruiting new staff, they would be stupid to do otherwise.

That's correct but you demonstrate the market working.

Truth is that in position, if your colleagues out-performed you in the job or you didn't bring in £5k more business then you'd have been first out the door.