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What the National Minimum Wage increase means for employers

As of 1st of April, the national minimum rates of pay increased. The new rates are:

  • Age 23 or over (National Living Wage rate): £9.50 (up from £8.91)
  • Age 21 to 22: £9.18 (up from £8.36)
  • Age 18 to 20: £6.83 (up from £6.56)
  • Age 16 to 17: £4.81 (up from £4.62)
  • Apprentice rate: £4.81 (up from £4.30)

The well documented rise in the cost of living, fuelled by the rise in energy costs and of inflation, plus the recent hike in national insurance contributions which has gone up by 1.25%, mean that wages have not gone up in real terms. Workers are now worse off despite the increase in rates of pay. It is understandable then that many workers are looking to increase their financial security.

How to attract (and retain) staff in the current climate

The number of job vacancies is outweighing the number of people looking for employment, which has resulted in a highly competitive market. Many companies are still recovering from the effects of the pandemic, so may not be in a position to raise the rates of pay that they offer, particularly with the added burden of the National Insurance rise. However, reviewing salaries is not the only way to attract new candidates and not risk losing them to a competitor. Companies should also look at what benefits they are offering that will help workers feel more financially secure,

If you are in the position to be able to offer flexibility, either in the hours that your employees work or the location, you could help them make savings on things like transport costs and childcare provision. Introducing a healthcare package which includes money towards dental appointments and optical care is also a very attractive benefit. There are also business perk programmes that offer money off day-to-day costs like gym memberships and shopping.

In order to retain talented employees, it would be a good idea to introduce regular pay reviews to give a clear idea of when they can expect a pay rise, and what they need to do to achieve it. Good communication is key to helping employees feel supported and secure. By listening to their concerns and working together, you can find solutions that work for everyone.

We hope you find this information useful. If you need any help recruiting, or would like to speak to one of our team, please do get in touch with one of our team today on 01279 758855.
 

Posted on Thursday Apr 7