Results of research into the views of UK entrepreneurs on the impact the National Living Wage will have on business published by Bircham Dyson Bell.
From 1 April 2016, the National Living Wage will come into force and workers aged 25 or over and not in the first year of an apprenticeship must be paid a minimum of £7.20 per hour. As part of its quarterly Entrepreneurs Optimism Index (The Index), supported by Rockstar Mentoring Group, Bircham Dyson Bell surveyed over 100 entrepreneurs and found that a third believe that the National Living Wage will have a positive impact on their business. Over 50 percent, however, are unsure as to whether the impact of the increased National Living Wage will be positive or negative.
Of those entrepreneurs who think that the introduction of the National Living Wage will have a positive effect on business: Almost three-quarters (73 percent) think the chief benefit will be improved employee morale. 56 percent confirmed the introduction of higher pay under the National Living Wage will improve their reputation. Over half (55 percent) think that the National Living Wage will improve the ease by which they recruit talent. Almost half (48 percent) believe that productivity will improve or significantly improve. Only 15 percent of those surveyed believe that the National Living Wage will have a negative impact on their business, but of those that do:
- 70 percent stated that increased labour costs are their main concern.
- A third believe that the implementation of the National Living Wage will lead to job losses.
- 38 percent said that the National Living Wage’s introduction will reduce recruitment.
- Almost half (48 percent) believe that investment will be reduced in other areas of business to meet the increased cost.
Half of the respondents think it will reduce employee reward packages and benefits. The businesses surveyed operate in a variety of sectors and 80 percent already pay employees the UK Living Wage of £8.25 per/hour or higher. The UK Living Wage, advocated by the Living Wage Foundation, is calculated independently and based on the cost of living.