The National Living Wage was introduced on the 1st April, and since then we have read too many articles about how retailers are creating more issues through the way in which they are offsetting the increased business cost.
From Waitrose to community convenience stores, retailers are looking at pay increases that their businesses just can’t absorb whilst maintaining profit. They are already stretched to breaking point and see the national living wage as the last straw before something snaps.
We are completely in support of the national living wage, every employee should be able to work and afford to maintain a standard of living without having to rely on additional tax credits to support their families. However, if their employer is considering cutting jobs in order to balance the books, how does that help the economy?
There is a common trend that has businesses looking within payroll to compensate for the living wage. Cutting overtime, Sunday premium rates and bonuses have been reported on multiple occasions already this month, leaving some employees worse off than before the ‘pay rise’. There are other cases of employee perks being cut. Not only that, but instances of retail prices increasing to cover the increased cost. So the customer has to pay for the pay rise? We don’t think so.
Let us ask a question. Are you sure your retail operation runs as efficiently as possible?
In our experience, whenever we have gone into a retailer to undertake productivity modelling, we are able to deliver cost savings back to the business within weeks, saved from an inefficient operation and wasted man hours. Not only that but the remodelled retail operation can offer better customer service, leading to improved sales and higher profit. Have a look for yourself.
Isn’t that a preferred scenario to absorb the National Living Wage into your business?