Is Cheap Labour Drying Up?

For many years the balance of power has sat firmly with the employer, primarily in the factory and processing plant environment. This resulted in manpower reductions, minimal pay rises, increased responsibilities and zero hour contracts. When local workers migrated away from this type of employment, companies turned to overseas labour as a means of maintaining the status quo, for years the strategy worked, now it’s starting to crumble.

As the global recession clears and skills gaps widen, sourcing cheap labour is problematic.

The false economy of cheap labour

The worldwide recession forced widespread cost saving measures to be taken. Industries with high labour costs suffered most. Supermarkets squeezed the supply chain mercilessly, forcing many businesses into administration.

Industries addicted to low cost labour are currently being subsidised by tax payers. The difference between the minimum wage and the living wage is made up from state benefits.

Effects of the minimal wage in the workplace:

Q. How do employees view their position?

A. Generally they look for better jobs

Q. What return is delivered from in-house training?

A. Minimal return is received

Q. Do those on the minimal wage improve yield and productivity?

A. Only occasionally

Q. Is stress created in the workplace?


Q. Does the minimal wage result in the high staff turnover?


As the global economy continues to improve, each country is in competition for labour. Candidates from Eastern Europe are savvier than they were 10 years ago. In 2014 migrant workers moved to Norway, Germany and the Netherlands ahead of the UK. However the weakening Euro against Sterling is changing things round.

Employers are cautioned to plan well ahead and Governments’ as facing difficult challenges on visa controls.


If you are concerned about the effects of hiring low-cost labour, speak to a consultant at ERA, it will help.


Why is
European Labour in
High Demand?

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