Employers urged to ‘go beyond’ national living wage

The government’s national living wage (NLW) came into effect on 1 April but employers are already being urged not to see the £7.20 an hour rate for those over 25 as a one-stop solution to their reward issues, or to neglect the role of productivity, reports the CIPD.
The wage will affect around 1.8 million people but does not cover younger workers, who will continue to receive the national minimum wage. And it is not to be confused with the Living Wage Foundation’s voluntary wage, which stands at £8.25 an hour and £9.40 in London.
The foundation today called for employers to reward their staff beyond the NLW because, it argued, it is not calculated according to the current cost of living. It urged businesses to “aim higher” and claimed many had the budget and resources to go beyond the £7.20 rate.
Charles Cotton, CIPD performance and reward adviser, said employers should take a rounded view of reward, within the boundaries of affordability. But he added that it was important not to decouple the NLW from the crucial and ongoing debate about productivity: “Will employers see the wage as a cost issue, resulting in cuts to reward and job losses, or as a challenge to improve both performance and pay?
 “Today’s pay rise can become more affordable if it is matched by improved employee productivity. Not the kind that comes from getting rid of people and making the rest work harder, but by reviewing working practices, work and job design, and ensuring employees have the best possible chance to be as productive as they can be in their roles.”

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