Liv­ing Wage set to have a knock-on ef­fect

Buckinghamshire Advertiser - - COMMUNITY - Email me your thoughts at with Philippa Bat­ting of Bucks Busi­ness First

IN APRIL 2016 the Na­tional Liv­ing Wage of £7.20 per hour will be in­tro­duced, a fig­ure that more than 10% of peo­ple work­ing in Buck­ing­hamshire do not cur­rently earn, ac­cord­ing to new data from the Of­fice for Na­tional Sta­tis­tics.

This fig­ure in­cludes more than a quar­ter of part-time work­ers and al­most 40 per cent of men work­ing part-time.

The in­tro­duc­tion of the liv­ing wage will be keenly felt by busi­nesses and em­ploy­ers are al­ready con­sid­er­ing the op­tions avail­able to them to help them cover th­ese ad­di­tional costs.

The feed­back I am hear­ing from lo­cal busi­ness own­ers mir­rors the re­sults of a sur­vey pub­lished by The Res­o­lu­tion Foun­da­tion and the CIPD, which found that more than half of em­ploy­ers say the new Liv­ing Wage will have an ef­fect on their wage bill and a fifth ex­pect to be af­fected to a large ex­tent.

When asked how they would re­act to the Liv­ing Wage changes, al­most a third said they would aim to im­prove ef­fi­ciency/ pro­duc­tiv­ity, while 15 per cent of em­ploy­ers said they would re­duce the num­ber of employees through re­dun­dan­cies or slower re­cruit­ment and seven per cent said they would scale down plans for ex­pan­sion.

This leaves Buck­ing­hamshire busi­ness own­ers con­sid­er­ing their op­tions. Many feel that they have no choice but to raise prices in the face of the new Liv­ing Wage.

And we should also con­sider the in­ter­est­ing area of pay dif­fer­en­tials.

A quar­ter of em­ploy­ers say that the new Liv­ing Wage will re­duce the pay dif­fer­en­tial be­tween those get­ting a pay in­crease and their man­agers, ac­cord­ing to The Res­o­lu­tion Foun­da­tion and CIPD sur­vey, while 20 per cent say it will main­tain pay dif­fer­en­tials.

This leaves a ques­tion unan­swered – will employees al­ready earn­ing over the Liv­ing Wage ben­e­fit feel the rip­ple ef­fect of the wage floor be­ing lifted be­low them, or will they be ef­fec­tively priced out of a wage rise?

Buck­ing­hamshire has rel­a­tively high full-time earn­ings com­pared to the rest of Eng­land, but the county is still not im­mune to the im­pact that the new Liv­ing Wage will have on busi­nesses.

I would like to know how your busi­ness will be af­fected by th­ese changes.

Do you ex­pect your pay dif­fer­en­tials to change? Will you chase greater pro­duc­tiv­ity to com­pen­sate for higher wage costs?

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