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National living wageLearning & developmentRecruitment & retentionProductivity

One-fifth of employers say productivity is key in response to national living wage

by Rob Moss 14 Mar 2016
by Rob Moss 14 Mar 2016

The Recruitment and Employment Confederation (REC) has released data showing that 19% of employers will invest in training or take measures to increase staff productivity in response to the introduction of the national living wage on 1 April 2016.

Its survey of 191 employers found that 39% would take no action and 10% were unsure about the action they would take. One in seven (14%) said that they would hire fewer staff than planned.

The remainder said they would reduce overtime and bonuses (8%), raise prices (8%) or make redundancies (2%).

National living wage resources

Webinar: Introduction to the national living wage

Penalties to be doubled for flouting national living wage

National living wage survey: January 2016

Letter advising a worker of a pay increase because of the introduction of the national living wage 

Letter advising a worker that he or she has moved to a higher age band of the national minimum wage

REC head of policy Kate Shoesmith said: “Many employers are adopting a ‘wait and see’ approach to the national living wage… A significant proportion of businesses will not be affected [at first], 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.”

She added that it was “encouraging” that one-fifth of employers are planning to increase productivity, but that 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 national living wage so that you can provide expert advice.”

The national living wage is compulsory and set at £7.20 per hour for all UK workers aged 25 and over.

Rob Moss
Rob Moss

Rob Moss is a business journalist with more than 25 years' experience. He has been editor of Personnel Today since 2010. He joined the publication in 2006 as online editor of the award-winning website. He specialises in labour market economics, gender diversity and family-friendly working. He has hosted hundreds of webinar and podcasts, most recently on the challenges created by the coronavirus pandemic. Before writing about HR and employment he ran news and feature desks on publications serving the global optical and eyewear market, the UK electrical industry, and energy markets in Asia and the Middle East.

previous post
Selecting apprentices: lessons we can learn from Germany
next post
National minimum wage to increase by up to 4.7%

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