August 24, 2019

Rate increases for self-employed construction workers continues to outstrip the wage rises of their employed counterparts

Self-employed construction workers have seen a year-on-year increase in average weekly earnings of 6.7% – almost three times above the annual rate of inflation. This translates to an average of £932 a week, up £63 from this time last year. The annual Hudson Contract Pay Review also reveals that earnings are increasing faster in the North-East and West Midlands, rather than in London and the South-East.

“Construction companies need to be flexible in order to remain competitive,” says Hudson Contract Managing Director, Ian Anfield. “So the fact that skilled trades people such as plasters, joiners, scaffolders and bricklayers are commanding significantly more than this time last year is an excellent indicator of economic growth in both regions. The West Midlands has been buoyant for some time, and it now looks like the North East has started to play catch up.”

Mr Anfield continues: “It’s also enlightening to compare the survey results with official figures from the Office of National Statistics. Their latest numbers, which relate to PAYE employees, show construction salaries averaging £24,000 during 2018.

“If you compare employed income to the earnings of freelancers contracted to Hudson, which average £43,800, it is plain to see the higher earning potential for those who are prepared to give up the comfort blanket of being employed to join the growing ranks of the self-employed.

“I do have to caveat that we channel lower skilled operatives through PAYE ourselves so the figures are not a direct comparison. So without getting too deep into the analysis, our evidence demonstrates that freelancers of the same skill level as employees earn 20% more.”   

Looking at the year ahead, Mr Anfield says: “As always, there is plenty of chatter about skills shortages and Brexit. But ultimately, highly skilled freelancers will continue to demand – and achieve – increasing rates of pay. In contrast employees are held back by uncertainty of employers and poor increases negotiated by unions under collective agreements.

“Rather than seeing £1,000/week tradesmen as a problem, if the CEO of a housebuilder is worth £75m a year, surely freelancers who actually deliver the product are worth at least £50,000 each. We look forward to the day when the average weekly rate for freelance brickies, joiners, and plasterers hits £1,000, they are more than worth it for the benefits they bring.”

To access Hudson Contract’s Pay Trends visit: www.hudsoncontract.co.uk