What looks like an unwelcome burden may actually have long-term advantage for employers. There may even be an argument for firms in some sectors to follow the example of Lidl and exceed the government’s requirement.
The insurgent grocery chain announced recently that it would pay UK staff £8.30 an hour, £9.35 in London, from October this year, an amount set by the Living Wage Foundation.
Generous employer? Altruism is probably only part of the story. Research suggests that staff paid well work more efficiently, take initiatives and feel a responsibility toward their company. Profitabilty rises.
Lidl is also sending a powerful, confident signal about its own prospects, one that will resonate with employees and, in a further benefit, help attract good staff.
Whatever businesses feel about the national living wage, which the government intends to rise further, it is coming any way. Employers should be thinking carefully now about what their minimum wage staff contribute and how to get more from them.
This is also the time to look at operational systems company-wide, making sure that business objectives are being met at every level as efficiently as possible.
In other words, the keys to next year are preparation and perception. The national living wage is an opportunity as well as a cost.
There are five important ways to get ready for the changes:
1. Increase productivity
Although many businesses will instinctively consider cutting staff levels, another option is to increase their value. Ask a very basic question: Are people involved in tasks that waste time and do nothing to grow the business?
Human resources teams should look closely at how every department in a firm operates, including their own. Training and hiring are vital to success, manual form filling and filing less so. But they can often take up a lot of working hours. Everything should be examined to reduce tasks that add nothing to growing the business.
2. Think about technology
It may seem counter-intuitive to add a further cost. But there are good arguments for investing in technology, which make it worth exploring what digital options there are for handling payroll, online marketing or ordering processes.
Continue reading the tips on page two…
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