18 March 2015
One of my hopes for this year’s Budget was a rise in the national minimum wage, so I was pleasantly surprised when this actually materialised a day ahead of the Chancellor’s announcement. However, whilst it’s certainly a step in the right direction, I think we probably could have raised the bar a bit higher than 20p.
If you’re trying to create an environment where unemployment shrinks you need to create a gap between what an unemployed person gets and what the minimum wage is. By pushing up the minimum wage you give an incentive and a path for people to aim at and say, ‘I’ve got to work because I get this extra money and its worth working for.’
Surely, part of the problem is that there are ways for people to get benefits that mean they may as well not work. So I think we, as business owners, have got to create an environment where we pay people well. I’ve never understood why some people are paying employees the absolute bare minimum because it doesn’t reward loyalty. Yet the loyalty and the energy that businesses get from people actually converts to profit.
When you lose a member of staff you have to find somebody new, you’ve got to retrain them and that training process has intrinsic value. But there seems to be less of a focus on retaining people and more an attitude of, ‘Oh, we’ll just get another one.’ Personally, I think that’s to an employer’s detriment.
I’ll be watching the Budget with interest today, and hoping for further changes to support the SMBs driving this country’s economy.
What do you make of the pay increase? Is it enough?