Employers aim to improve productivity in response to Living Wage

Employers are preparing for the introduction of the Living Wage next month
Employers are preparing for the introduction of the Living Wage next month

Ahead of the introduction of the National Living Wage on 1 April 2016, the Recruitment and Employment Confederation (REC) has released data showing how employers are likely to respond to rising wage bills.

“Responding to the findings, REC head of policy Kate Shoesmith commented: “Many employers are adopting a ‘wait and see’ approach to the National Living Wage, with 40 percent saying they will take no action and a further 10 percent saying they don’t know what their response will be. A significant proportion of businesses will not be affected by the first NLW, but the government has pledged to raise the rate to at least £9 by 2020 – this is likely to impact many firms’ longer-term hiring strategies.”

A survey of 191 employers found that:

A fifth (19 percent) will invest in training or take measures to increase staff productivity

Four in ten (39 percent) will take no action

14 percent will take on fewer staff than planned

8 percent will reduce staff overtime and bonuses

2 percent will make redundancies

8 percent will raise the cost of their goods/services

0 percent are unsure about the action they will take.

“It’s encouraging that a fifth of employers are planning to increase productivity, but this is easier said than done. Low-pay sectors such as health and social care are already finding it difficult to attract and retain staff – and there are question marks about how care providers are supposed to meet cost increases.

For recruiters, it’s important to understand how your candidates and clients might react to the NLW so that you can provide expert advice,” Shoesmith concluded.

About Robert Leeming

Robert joined the HRreview editorial team in October 2015. After graduating from the University of Salford in 2009 with a BA in Politics, Robert has spent several years working in print and online journalism in Manchester and London. In the past he has been part of editorial teams at Flux Magazine, Mondo*Arc Magazine and The Marine Professional.
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