Salary negotiations are set to be fraught in the next 12 months, if the alarming findings of the latest Plimsoll analysis (examining the financial performance of the Top 1,000 UK Fresh Produce companies) prove accurate.

With the average salary next year set to rise from £20,986 to £21,885 the implications may seem trivial. However, research by Plimsoll has concluded that with profit margins at a record low and with a staggering 20 per cent of the industry already loss making, any increase in salary costs would be foolhardy. The fact is that many of the industry's Top 1,000 companies simply cannot afford this extra cost.

The key issue for 47 per cent of the industry is that they seem to be losing the productivity race; a simple calculation sums this up perfectly. The amount of sales these companies generate per employee is £84,634. The most productive companies generate almost four times this figure, at £303,081 or around 17 per cent of sales on salaries. For the unproductive this figure rises to nearly eight per cent of sales.

Compounding this issue, the analysis has also placed 37 per cent of the 1,000 companies in "Financial Danger". This situation means the se companies have severe financial constraints making extra costs simply unsustainable.

David Pattison, senior analyst at Plimsoll Publishing, said, "The productivity race has started. You only have to look at the USA where any increased sales have not lead to extra jobs. Companies have just got more productive by getting more sales and profit out of their existing employees simply to remain competitive. In the UK, companies must be aiming for at least £258,000 per person to even get in the race.

The latest Plimsoll Analysis ñ Fresh Produce assessing each of the top 1,000 companies on their financial position in the industry is available for £305 by calling 01642 626400 or visiting www.plimsoll.co.uk

Readers of the Fresh Produce Journal will receive a five per cent discount when mentioning this article upon ordering.

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