HR

National Living Wage Having a Limited Impact on Employment Levels

Earlier this year, we were discussing the introduction of the new National Living Wage (NWL) and its potential impact on businesses. One of the major concerns highlighted was how the imposed increase in the wage bill might affect levels of employment, particularly for small businesses where it can be more difficult to absorb the costs. The Office for Budget Responsibility predicted it would lead to 60,000 job losses by 2020.

However, the publication this month of a survey by the Resolution Foundation shows that businesses appear to be adopting higher prices, or accepting lower profits rather than seeking to cut jobs.

In the pre-BREXIT survey of 500 UK businesses, 36% said they had put up their prices to compensate for the higher wage bill and 29% said they had reduced their profits. Only 14% said they had reduced their staffing levels either by fewer hours, redundancy of slower recruitment.

Other measures businesses have taken as a result of the introduction of the NWL in April include investing more in technology and training, reducing some staff rewards and perks, scaling back plans for investment and hiring more workers under the age of 25 who are not currently affected by the new NWL and continue to be paid the National Minimum Wage.

It will be interesting to see how the longer-time employment landscape shapes up as we move to leave the European Union and we will no doubt be in for a bumpy ride over the coming years. But, for now, at least, it seems that UK businesses are reacting more positively to the introduction of the National Living Wage than at first feared.

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Saul HunnaballSaul Hunnaball
15:44 12 Aug 22
We have worked with Park City for our HR and Health and Safety support for many years now and have always received an excellent service.Carley is our Consultant and she is always so helpful, as are... her colleagues when she is unavailable.I would highly recommend Park City.read more
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Park City have worked with us for many years, advising and guiding us regarding HR and Health & Safety, along with supplying valuable training.We work with many people in several areas of expertise,... Sara Godfrey, Jennie Galione, Ashley Williams, Sam Parcell, Stephanie Devans, Poppy Hayhoe.They build confidence within our company and are always available with support and advice.They provide a consistent, professional, hands-on service, second to none!Thank you from DH Industries Limited.read more
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