Nicola Stangar | 25 May 2022

Labour market pressures buoy up night-time premiums

Shift workers play an essential role in the economy, having to sacrifice standard lifestyle and sleep patterns in order to keep up with their work. Night working has become more common and in this article we look at the premiums companies are offering to compensate for these unsociable hours.

Night shifts are still generally paid at time and a third, despite changes to other premiums, according to the latest research from IDR. The duration of ‘night windows’ (the period of time that constitutes night working at organisations) varies by sector to a certain extent, with the widest windows found in the housing and social care, manufacturing and primary sectors (an average of 9 hours 45 minutes and 9 hours respectively) and the narrowest in retail and hospitality (7 hours 45 minutes and 7 hours respectively).

For salaried roles, practice for rewarding such patterns is evenly split between employers who compensate night working by means of an annual shift premium calculated as a percentage of salary (30% at the median) and those who pay this as a fixed monetary amount each year (worth £3,850 at the median in our sample).

For hourly-paid roles, it is more common (two-thirds of respondents) to apply a percentage uplift (typically worth 33%) rather than a monetary premium (£1.37ph at the median). The former approach generally results in more generous premia.

 Some 56% of the organisations surveyed only apply the night premium to the hours that fall within the night window, however, it is relatively common (34% of respondents) to pay premiums for all hours worked over such shifts including those outside the night window.

 There is some evidence of increases in (or restoration of) the value of such premia recently. This is mainly as a result of labour market changes in the wake of the pandemic and Brexit, though it partly reflects generalised upward pressure on pay as a result of the increasing cost of living. 

 While some people may directly seek out shift work to suit their lifestyle, many others see shift work as temporary or as a last resort. Shift positions are often difficult to fill and have a high turnover of staff. Half of respondents report that they have experienced difficulty recruiting for particular roles due to the timing of the shifts (and in some cases due to the location of the roles). Approaches to address these difficulties vary, with initiatives including employee referral schemes, signing-on bonuses (followed by subsequent bonuses for those still in the post a year later), increases to shift premiums and increases to basic pay. However, several organisations surveyed had yet to take steps to tackle these concerns.

The survey attracted 55 unique responses, covering a range of different sectors where nightwork is prevalent but with most responses coming from the private services sector, followed by the manufacturing and primary sector (where night-time shift working is prevalent, to enable round-the-clock production) – 54% and 33% respectively. The median headcount of organisations represented was 1,900, with the survey sample covering just over 1,094,000 employees altogether.

Discover Pay Benchmarker

Pay Benchmarker is an impressive online pay tool which gives you access to up-to-date, searchable market data.

Capture data on salary levels and pay awards at the click of a button.

Analyse and manipulate complex pay data to provide accurate information to inform your reward decisions.