Change to minimum wage and its impact on logistics

Change to minimum wage and its impact on logistics

From 1 April 2024 changes to both the minimum and living wage sees the largest ever increase in wages in a decade.  

This was one of the hottest topics debated at the first Logistics Round Table organised by Chris Wright of ACS Staffing Solutions, chaired by UKWA Chief Executive Clare Bottle and hosted by 3PL operator Europa Warehouse.  ACS Staffing Solutions is a recruitment business focusing on the logistics sector.  Established in 2011, ACS provide both temporary and permanent recruitment solutions across the UK and has a wealth of experience in supporting businesses in their acquisition of talent.

According to latest analysis, the logistics industry employs 1.8 million people across England, Wales, Scotland, and Northern Ireland.  When you consider those who work in logistics roles within other firms that total increases to 2.7 million people and means that 8.2 per cent of the UK workforce is employed within logistics.

Logistics will be significantly impacted by the national living wage increase, which will rise from £10.42 to £11.44 an hour on 1 April.  Changes will also apply to the national living wage rates for those aged 21 or 22, and also for younger employees aged 16-20.

The first Round Table brought together leading industry voices to have open discussions around the biggest issues affecting the sector, such as the impending changes in April.

Participants in the event included Phil Courtney, General Manager at Manual Distribution Network (part of John Lewis Partnership), Charlotte Patrick, Founder of Northamptonshire Logistics Awards, Dionne Redpath COO of Europa Worldwide and Darren Twiselton, Head of Managed Services at Zig Zag.

“With logistics impacted by increased costs as well as these wage increases the coming 12 months is hard to predict” commented Chris Wright from ACS.   “Our customers are looking at a range of different strategies to navigate increased costs whilst maintaining competitiveness.

“At the Round Table it was interesting to hear how across the sector operators are looking at strategies, creating more streamlined and efficient operations to tackle economic challenges head on.”

Dionne Redpath, Chief Operating Officer and Head of the Warehouse Division for Europa Worldwide Group, explains: “At Europa, it’s not just about pay, it’s about creating the right culture and values in an organisation and the best environment to retain the best talent and enable them to flourish. It’s a competitive jobs market.

“Yes, these wage increases will affect us, but we are continually focused on being innovative, streamlining our operations, improving efficiencies and ultimately the service we provide for our customers.

“We run focus groups and surveys to make sure that we are listening to our team, we provide a lot of support to people working in the environment – employee engagement programmes and ensure we make the environment as fun and engaging as possible.   It’s a balance, employees can still choose where they want to work, and we have to do everything we can to attract them.”

As well as looking at increasing staffing costs the team discussed attracting new talent to the logistics industry.

Phil Courtney from Manual Distribution Network (John Lewis Partnership) adds “Creating the right environment is as important as salaries.  It’s about showing people that if they work in logistics that it is about their life rather than just a job.  We’re a co-owned business and so our partners can decide what we invest in.”

Attracting young talent into logistics is something which is being addressed by the Generation Logistics Campaign. 

Charlotte Patrick – Founder Northamptonshire Logistic Awards said “We need to open up the doors more on our industry – it’s largely a hidden industry and that’s the bit that we need to bring to life.  People think we are just moving boxes or driving a fork-lift.”

Darren Twiselton Head of Managed Services at Zig Zag added “I started out in this industry because my dad worked in warehousing, and I worked with him in the summer holidays.  Lots of people have similar experiences, it’s not just driving a forklift or a van there is so much cool stuff going on in these sheds.”

Dionne said “It’s absolutely essential to help young people understand the opportunities that are available within the logistics sector.   We need people to recognise what happens in these buildings, Covid helped open up the conversation, but we need to show young people this is an exciting sector and a broad one to come into, that wages are strong as well and the wider working environment.”

Clare Bottle, sums up, “In this ‘Year of Warehousing’ this Round Table really highlights the huge opportunities and diversity across our industry at a time of continued change such as changes to the Minimum and Living Wage, and the demand for innovation and creativity. These are just some of the hot topics discussed in our lively debate.” 

To listen to the Round Table in full and hear views about peak, Black Friday and returns watch it here