Sajid Javid has pledged to raise National Living Wage to £10.50 by 2024 and has committed to scrapping the over 25 age limit along the way, returning to a differential at 21 years of age like it used to be when the minimum wage was first introduced.
We can all identify an incompetent 40 year old and a 19 year old superstar so paying according to age does not really make sense. Many companies opted not to follow the age 25 guidelines anyway as they believed it was discriminatory or did not fit their values / ethos and chose to pay everyone the same wage. When discussing whether business can bear these additional wage costs talk mostly turns to efficiency and productivity. On a micro scale this is about performance management- getting the best from people and identifying areas for improvement regardless of their age. Not all jobs are equal and although a strong believer in people being paid a wage that means they can live a decent life putting a lower threshold of £10.50 [ £20.748 for a 38 hour week] will mean the minimum wage will have risen considerably over the past decade and of course employers now have additional pension costs. To date most commentators agree that organisations have ‘swallowed’ the additional costs. History of minimum and living wage expressed per annum based on 38 hour week 2005 £ 9,979 2010 £11,718 2015 £13,239 2020 £ 17,230 Rising to £ 20,748 by 2024. What about everyone on the next rung of the ladder? What about the supervisors and team leaders and lower layers of management further up the salary ladder ? they expect to be paid more than those on the entry level rung, and in turn the next layer want to see a differential so you get a ripple effect across the company. This will eventually even out but the increases since the introduction of the National Living Wage are beginning to impact and complicate salary structures. Some industries will be harder hit, care homes for instance where staff costs currently eat up 45% to 60% of the fees received so further increases will have to be reflected in charges. We are seeing the High Street suffer and this can be only further impacted by increased staffing costs. You might find it difficult trying to sell a team leader role to someone when it means ‘losing’ out on Universal Credit and only seeing part of the ‘£1500’ increase especially if team leaders lose the right to overtime. Although money is intrinsic to our relationship with work, meeting other needs and expectations may not have such an effect on the bottom line. Offering flexible benefits such as additional holiday, healthcare, flexible hours or study opportunities. Wage growth in the UK was approx. 3.4% in 2019. Employers should concentrate on employee engagement, productivity and innovation to ensure they are getting the best from their workforce and this can only be achieved by taking a holistic approach and ensuring you have good practice from recruitment through to exit.
0 Comments
Leave a Reply. |
AuthorHR Consultant sharing information and experience across a range of people issues Archives
October 2020
Categories |