Hospitality industry warned to prep for National Living Wage

Claire Dodd

Claire Dodd

15 December 2015

The food and drink industry needs to rise to the occasion and prepare for the impact of the new National Living Wage (NLW), a leading recruitment agency boss has warned.

The controversial NLW will be paid to workers aged 25 and above and will initially be set at £7.20 an hour but is expected to exceed £9 an hour by 2020. It will come into force in April 2016, though some businesses such as bakery and café chain Paul, have already introduced the new rates.

However, Derek Ferrol, from Glasgow-based EasyRecruitUK has warned that many businesses have not yet begun preparations for the new rates, with less than five months to go before implementation.

Ferrol said: 'The impact of the NLW could take us back to the dark days of the 1970 and 80’s. As the unions pushed for improved working conditions and better pay, the UK struggled to perform in the global manufacturing market. The foundation of any sustainable business, quite simply, requires a flexible cost base. One that is not fixed, rigid or beyond the control of the business.'

The increase is expected to boost the wages of six million people, however leading businesses such as JD Wetherspoons and public bodies have warned of adverse effects. The Office for Budget Responsibility – an independent body that analyses UK finances – has predicted that 60,000 people will lose their jobs as a result of the changes.

Ferrol added: 'The sectors which will be most affected by this legislative change are food and drink, hospitality and cleaning. In order to limit the impact of the National Living Wage, they need to consider moving to a "flexible labour" model. [This will] make an organisation more resilient and progressive in challenging times.'

Related articles

News

Hospitality industry warned to plan for National Living Wage

Businesses are being warned to be proactive in preparing for the introduction of the National Living Wage, after new research has found that businesse

Mixers & More

Paul implements National Living Wage early

French bakery and café brand Paul has introduced the mandatory National Living Wage early, ahead of the April deadline.Paul – which operates 34 sites

News

British Hospitality Association slams living wage plan

Yesterday Chancellor George Osborne announced his summer budget, including plans to introduce a new minimum 'living wage' from next year for over-25s.

News

Opinion: Living wage or slow death?

According to most commentators, George Osborne’s budget yesterday was political genius.