What will happen to the national living wage in coming years is a little uncertain. Theresa May has pledged to increase the rate to around £8.75 per hour by 2020, and the Labour Party and the Green Party have taken things a step further by saying that under their control, it would be increased to ‘at least’ £10 an hour and this will cover all workers aged 18 and over, and not just those aged 25 and over, as is currently the case.
So where does this leave your business? For your average Joe in the street, an increase to the national living wage is music to their ears. Who doesn’t want to take home a slightly bigger pay cheque at the end of each month?
But as a business owner, the prospect of having to pay out more in wages can be daunting. You want to reward your staff for their contribution. You don’t believe in cutting corners or overlooking the satisfaction of your team. As Theresa May said in her campaign, you don’t have a magic money tree that you can just shake! You may already be starting to worry about how you’ll manage any increases that may come into force in the future.
You’re not alone. The Institute for Fiscal Studies has remarked that accelerating the pace of rises to the national living wage could price workers out of a job, and that young people are likely to be the worst affected. It said that if employers are forced to pay at least £10 an hour, then 60% of young workers could face losing their jobs.
It’s safe to say that there will be far reaching consequences if the proposals become a reality, and not all of them will be positive. Right now, it’s a case of ‘wait and see what happens’. For the time being though, it’s advisable to stay up to date with any developments, and give some consideration to how your business would cope with the changes if they were to come into fruition. Of course, it’s a little more complex than just changing the amount that you pay people each month. You’ll have to consider wider budgetary planning, updates to your policies and procedures, and a whole load of other things.
Changes like this can be daunting, but they’re all part of running a business.
If you know that you need to get a tighter grip on your staffing spend, then get in touch today to arrange a no-obligation consultation. I can help you get the most out of your budget, and your people.