Can your business afford a 9.7% increase in wages?
The recent Autumn Statement included an announcement that the National Living Wage (NLW) for individuals aged 23 and over, will increase from £9.50 to £10.42 per hour – an increase of 9.7%.
With the current cost of living, this is an important move for employees, but the harsh reality is that this will have a major impact on many rural businesses.
There are well over 500,000 rural businesses in the UK, many of which rely heavily on their workforce.
The difficulties the agricultural sector is facing are well documented, but the majority of these rural business are unrelated to agriculture, forestry and fishing, yet many will employ workers for which this wage increase will come into effect.
Martin’s top tip!
“Rent, fuel and electricity costs have all seen a significant increase in recent times, and whilst many businesses will be looking at their prices, there is only so much that can be passed onto the customer.
A lot of advice surrounds ‘generate more sales’, or ‘establish new revenue streams’, but these are not easy to do (though not impossible) and often require a level of investment that either isn’t available, or comes with substantial borrowing costs.”
One thing for business owners to focus on is improving their gross margin – keep an eye out for more on this is another blog.