Combatting the cost of the national living wage with better workforce management

by | 22.04.2016

On April 1, a new national minimum wage, called the ‘living wage’, was introduced in the UK for all employees aged 25 and over.


The new wage is £7.20 per hour, a 50p increase than the previous minimum wage, and it’s claimed the result will see a direct pay rise for more than 2.5 million employees. Employees in the UK who earn the minimum wage tend to be those who work on the frontline in hotels, restaurants, bars, shops, supermarkets and even care homes, meaning it’s these industries facing the biggest impact of the change.


Already businesses have raised concerns about being able to afford this increase in cost, despite being given a break in corporation tax to fund the move. As a result, well-known UK business including the hardware store B&Q, Cafe Nero and the supermarket Waitrose have tackled the rising costs by slashing overtime and increased Sunday pay rates, removing bonuses, scrapping free food for their employees and ending paid breaks.


One B&Q employee claimed that as a result of the increase in the minimum wage, they would actually be £2,000 worse off per year. Neither businesses nor employees are pleased with the move which is also expected to see a loss of 60,000 jobs by 2020 as companies cut staff to keep costs under control.


Other businesses are embracing the change and even deliberately paying their employees more. In an interview with the Guardian, hotel owner Tim Chudley says a higher wage need not cost jobs or profit as it helps attract the best people. This means his hotels can differentiate themselves from the competition by providing a better service.


“You can hire the best people, you can motivate them and engage them and the product in hospitality is about that engagement. I see it as an investment in our business,” he said.


What’s clear is the introduction of the national living wage is forcing businesses to think carefully about the relationship they have with their workforce and how that workforce is managed effectively.


We believe that by optimising the way they manage their workforce, businesses will be able to, not only make sure their employees are happy, but also deliver an improved experience to their customers and see significant bottom-line results.


Here’s why…


Time is everything.

Whether it’s for the employee or the business, time is everything. This time isn’t just about the number of hours being worked (and therefore the ensuing cost), it’s about what is done in those hours. Optimizing time is key for successful businesses. By improving productivity, through better use of resources and improved engagement levels, employees will deliver more, benefitting both the businesses and, ultimately, the customer.  


Controlling costs.

The national living wage means most business in service industries will be facing increases in their costs. By using systems like Quinyx, businesses are able to manage these costs in real-time. Therese Klingwall, store manager at GANT’s flagship store in Stockholm who use Quinyx, says: “I’m easily able to save hours where I need to because I can see the budget and forecast for each day, each week, each month and the full year. With everything in one place it’s easy to manage and allows us to be responsive to the needs of our staff and business.”


Employee choice.

Good workforce management is also about empowering employees. While it might not be possible all the time, employees should feel they have an element of control over their schedules; those who do typically perform better and are more engaged. Through Quinyx, employees can request when they work, easily switch shifts with colleagues and take more shifts if they are available. This will allow them to have a much healthier work-life blend ensuring they are more productive when they are working.


Collective goals.

For many employees earning the minimum wage it can feel like they are just another cog in the machine or their role is only a temporary one. A great way for businesses to combat this is to create a culture that employees want to be part of. Engaged employees work harder, perform better and deliver more than those who coast by.


The introduction of the national living wage means UK businesses are facing rising costs. Through better workforce management these costs can reduced. Alongside this, they will also have more time to focus on delivering for their customers and have better levels of employee engagement.

  New Call-to-action

Tommy Tonkins

false
default-icon

Get in touch for a free walkthrough

Enter your details below and we’ll be in touch to book in a free, no-obligation demo with you. Is this a support related question? Please visit our Help Center.