Payslip300

Six in ten employers are in favour of the new National Living Wage, according to new research from Group Risk Development (GRiD), the trade body for the group risk industry.

While the introduction of a new mandatory National Living Wage of £7.20 an hour from April 2016 has had some businesses concerned about the overall impact on their bottom line, 62 percent said they were in favour of the proposal, with one in five (21 percent) saying they disagreed.

With speculation over how the government will seek to soften the blow on cuts to tax credits for the lowest earners, the most popular proposal – with 82 percent of employers in favour – is a rise in the personal allowance to £11,000 in 2016/17, meaning households will be better supported in the long-run.

“From these findings, employers are clearly putting staff first when it comes to welfare and consideration of income. Yes, there has been widespread concern and calls to cast the new Living Wage aside for the sake of the bottom line but, on the ground, businesses are thinking longer-term when it comes to employee support,” commented Katharine Moxham, spokesperson for Group Risk Development (GRiD).

Cuts to the Employment and Support Allowance (ESA), which will hit claimants in the Work-Related Activity Group from April 2017 provoke a more divisive response among employers, with 39 percent voting in favour and 32 percent disagreeing. The policy which, in current terms, would involve a cut of around £30 per week in benefits, means that many new ESA claimants will receive the same (lower) amount as claimants of Jobseeker’s Allowance (JSA).

When it comes to protecting the health and welfare of employees, however, two in five (41 percent) of businesses think employers have a greater role to play in driving this forward, but that the government should incentivise them more.

“If there are concerns about how an increase in wages will be a drain on profitability, the important thing is to look at how a business can increase productivity. This really does start with the people, and the key is to look at ways of improving staff morale – whether this is through flexible working, focusing on fitness, financial education or other means. The fact is, a contented and focused workforce will drive the business forward, and a change in salary should not be seen as a pull on that,” Moxham concluded.