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Scotland Ash News

  • 14th April 2016

    Counter View: National Living Wage

    The following article is running in a trade magazine:

    Peter Welch

    sags-300x155Although the National Living Wage has been introduced to positively support the general workforce, it may not have such a beneficial impact on small businesses. Finding experienced technicians can already prove difficult for independent garages and this new legislation may not help the issue.

    From April, garages will have to assess their pay structure to ensure any over 25s working for the company are being paid correctly according to law. In some cases, particularly areas of unskilled work, this may result in increasing an individual’s salary without increasing their productivity.

    Small businesses often do not have access to big budgets, and therefore need to carefully structure teams to work efficiently as it becomes increasingly difficult to stretch funding to employ new staff.

    As it stands, the new legislation does not affect us as we’re based in a high-wage area, but as I know from various companies within the trade, it is sure to affect others.

    On the other hand, the introduction of this new system may incentivise employees and give them the added motivation to work harder, helping small businesses thrive with a limited workforce. It will also give those not currently working a reason to find employment, therefore increasing those paying towards tax, benefitting the economy.

    I understand the reasons behind the change and it’s incredibly important to pay workers an appropriate wage to sustain the workforce, but I am slightly concerned about the negative effect it will have on small businesses within the industry; it may cause a chain effect throughout the supply chain as a direct result of rising pricing structures to cover the increased cost of labour, meaning the customer will inevitably have to fork out more.