Employers fearing impact of minimum wage increase
14th September 2015
Recruitment and growth prospects will be affected by the increase in the minimum wage according to the Federation of Small Businesses.
As part of the summer budget, George Osborne, the Chancellor of the Exchequer, revealed that there will be a rise in the minimum wage, but experts believe that this could send shockwaves through the UK labour market.
The living wage change will impact on the legal recruitment process in that law firms will need to be aware of this alteration when hiring low-paid staff. Solicitors and other lawyers will need to keep updated about the changes to the national living wage as clients that are affected are sure to seek advice from legal professionals.
In fact one recent survey of 2,100 employers highlighted that bosses were scaling back recruitment plans and will instead take on younger or self-employed workers who are exempt from the national living wage change.
According to an article in the Financial Times, the Federation of Small Businesses’ quarterly survey of confidence amongst 1,500 smaller businesses has highlighted that companies are expecting growth to be reduced and recruitment plans to be put on hold. More focus will be put on keeping existing staff and filling any vacancies quickly with long-term plans in mind.
However, the Treasury and the Office for Budget Responsibility (OBR) expect the national living wage change to give a boost in wages for around 2.7 million workers.
A statement reads, “Factoring in the new national living wage, the OBR forecast employment to rise by 1.1m in 2021 and estimate that the cost to business will amount to just 1 per cent of corporate profits.”
Image Credit: Images Money (flickr.com)