HOW WILL EMPLOYERS ADJUST?
by Contributor
(Apr. 1, 2016) — Employees are a vital component of any company’s success. Without talented, satisfied employees, you simply can’t have a profitable organisation. This is why many companies are willing to invest the majority of the profits that they make into their staff, not only to hire the best talent, but also to keep them happy and well trained.
But with the introduction of the national living wage, prices are set to increase, and businesses may find it more difficult to keep the same number of employees while maintaining their bottom line. Continue reading to learn more about the controversy surrounding the introduction of the national living wage.
Jobs Will Be Lost
Higher wages means higher costs for businesses, and some companies simply will not be able to meet these new wage requirements. This will inevitably result in jobs being lost. In fact, the Office for Budget Responsibility reported that around 60,000 employees might end up losing their jobs before the year’s end because of the national living wage.
In a really competitive job market with so many people already looking for work and being unsuccessful at acquiring the positions they need, the competition is set to increase. As more people are fired from their jobs because their employers can’t afford to keep them on, more people will be looking for work and it will become even harder to land a job than before.
Saving Through Increased Productivity
Productivity is also set to increase with the introduction of the national living wage. This is because employers will either have to cut their staff down, resulting in every employee who is left taking on more responsibilities than they had before, or employers will have to find ways of cutting costs elsewhere if they end up keeping their existing employees.
Employers will likely be investing in tools and technology that will help employees work more efficiently within the same number of work hours each day. Products like xcdhr.com and other cloud-based software could come in very handy for employers who want their staff to have access to valuable information and data about the organisation wherever they go. And for employers who are cutting costs by allowing for flex schedules or telecommuting, cloud software will definitely come in handy as a wise investment.
Driven by Data
It will also become increasingly clear that accurate data needs to be collected across an organisation in order to determine where productivity and efficiency, as well as costs, can be decreased. From HR and sales, to finance, marketing, and everything in between, business owners will be focused on cutting corners to reallocate funds and pay employees the required wages.
Even though there is a lot of controversy surrounding the introduction of the national living wage, smart business owners and their employees will end up adapting to the changes. It is a matter of crunching some numbers to figure out just how much a company’s costs will increase and what needs to be done to maintain the same profit levels as before.