Over a third of employees unaware of impact NLW will have on SMEs
Over a third of UK employees (35%) aren’t aware of the implications that the National Living Wage will have on SMEs, with nearly half (46%) not realising that it could reduce job creation in smaller organisations.
This is according to a new study from CV-Library, which also found that 91% of workers believe SME job creation is essential to the UK economy.
The survey of over 1,000 UK workers found that of those that are aware of the changes, 83% believe the general impact of the living wage is positive, with 43% of individuals feeling the current minimum wage is too low and 31% stating that the changes will be better for the economy. A further 17% believe that they will personally benefit and be able to save more, with the research finding that the majority of workers earning the current minimum wage are either unable to save money or are in debt (78%).
Lee Biggins, founder and managing director of CV-Library, commented, “With the new National Living Wage being implemented next week, it’s clear that there is a divide in those that understand how it will affect current and future job prospects, and those that don’t. What we do know is that employers, particularly smaller businesses, need to ensure they understand how the regulation affects them personally, including the implications of failing to pay a worker what they are legally entitled to and the potential need to reduce head count to fund the extra expense.
“Many young people are attracted to smaller companies because of the culture and exciting nature of the work, but these individuals could be left in the dark if SMEs don’t prepare the impact of pay increases on jobs. If these organisations want to retain top talent and find the right candidates to help their businesses grow they will need to communicate effectively with current employees about the changes and invest in an effective recruitment strategy to ensure they remain competitive in an ever-crowded labour market.”
The research also explored the age boundaries around the living wage and found that 85% of workers believe it should also be available to employees under the age of 25, with 46% thinking it should be available at 18+ and a further 32% believing it should be available at any age.