• David Sharp
  • 24 November 2015

Six in ten employers in favour of new National Living Wage

According to new research from Group RiSk Development GRiD), the trade body for the group risk industry, six in ten employers are in favour of implementing the new National Living Wage, which currently stands at £7.20 an hour.

While the introduction of a new mandatory National Living Wage from April 2016 has had some businesses concerned about the overall impact on their bottom line, 62% have said they are in favour of the proposal, with just one in five (21%) saying they disagreed.

The research, undertaken in September 2015 across 500 UK businesses, surveyed employers on how they thought Government Budget cutting measures would impact low-paid employees, and discovered that the most popular proposal – with 82% of employers in favour – is the rise in the personal tax allowance to £11,000 in 2016/17, meaning households will be better supported in the long-run.

Cuts to the Employment and Support Allowance (ESA), meanwhile – which will hit claimants in the Work-Related Activity Group from April 2017 – provoke a more divisive response among employers, with 39% voting in favour and 32% disagreeing.

The policy, which in current terms would involve a cut of around £30 per week in benefits, means that many new ESA claimants will receive the same (lower) amount as claimants of Jobseeker’s Allowance (JSA).

When it comes to protecting the health and welfare of employees, however, two in five (41%) businesses think employers have a greater role to play in driving this forward, but that the Government should incentivise them more to do this.

Katharine Moxham, spokesperson for Group Risk Development (GRiD), said:

“From these findings, employers are clearly putting staff first when it comes to welfare and consideration of income. Yes, there has been widespread concern and calls to cast the new Living Wage aside for the sake of the bottom line but, on the ground, businesses are thinking longer-term when it comes to employee support. If there are concerns about how an increase in wages will be a drain on profitability, the important thing is to look at how a business can increase productivity. “This really does start with the people, and the key is to look at ways of improving staff morale – whether this is through flexible working, focusing on fitness, financial education or other means.

“The fact is, a contented and focused workforce will drive the business forward, and a change in salary should not be seen as a pull on that.”