Hi Rachel

I think that a raise in the living wage is generally a very welcome message but it will be a challenge for some businesses.

I don't think the aim is always about staying ahead but to remain competitive for the industry you are in and the employees you want to attract and retain.

In addition to salary, you also need to take into account the benefits you offer employees. There are services available that can benchmark your business against others in your industry and provide a benefit score so you know where you stand.

Happy to help if you have any questions.

Ben

In reply to Benjamin:

Thanks for your reply Ben.

This is more a case for our unskilled workforce, who are on an hourly rate. I was wondering how other companies with unskilled workers may be dealing with the increases going forward.

In reply to Rachel McDonal:

Hi Rachel

I have spent the last 15 years working in manufacturing environments so have seen this as a developing situation first hand. Not only do you have your basic rates become subject to the NMW, you also see the differentials between skilled and unskilled eroded. This leads to the skilled people feeling their wage has been devalued.

In a previous role we committed to keeping our manual workers ahead of the the NLW by the same value (not %) as they were at that point in time e.g. NMW was £7.50 we paid £8.00 so when it went up to £7.83 we paid £8.23 and so on. It has meant the wage bill has increased but at a slower rate and also the differential between skilled and unskilled has been eroded at a slower rate.

In my current role the company is aiming to become a Living Wage employee (we are currently still above the NLW but not by much) however this will have to be funded somehow. We are looking at how we can achieve efficiencies, reduce waste and we are also reviewing our pay structure as it is based on an old national agreement and there are a number of practices that could be up for negotiation therefore it could be a case of what the teams are willing to negotiate with for a higher basic rate.

This won't address the issue of the devaluing of skill level though and to combat that we are looking at introducing skills banding based pay. We do still run the risk that someone could well be better off taking a job with less responsibility with the continuing increase within the NLW..

I was asked the question on Monday as to whether the company will be increasing everyone's salary by the same % as the NLW to which I replied no. I explained that as the NLW has increased by 41% over the last 9 years I doubt there are many companies that could afford to do that but did explain we are always looking at ways to improve our benefits and have other 'perks' so plan to do more work and communication around the total tangible and not so tangible benefit package.

In reply to Nicki:

Hi Nicki,

Thanks for your response, its really interesting as we have a similar situation with the devaluing of skill levels. I have started working on a pay structure, and will need to take into account the increasing NLW for the future.

The benefits package we have is fairly standard, I would like to work on creating an attractive benefits package, to bridge the gap.

Rach