Minimum wage increases are a certainty as the government looks to keep up with the rising cost of living and ensure that employees are paid fairly and have enough to survive and thrive on. However, these increases can- and will- affect your business, especially if you are finding that you are already scraping your income threshold. Then, here is how the minimum wage increases will affect your business.
How can minimum wage increases affect businesses?
You might think that the new minimum wage will provide large benefits to your employees, and you might be incredibly happy for them.
However, there are a number of downsides for business owners.
If business owners are already struggling to make a profit, they may panic about where they are going to get the money they need to pay their team members. This could leave them without a proper income- and struggling to keep their businesses going.
Many businesses, including yours, may need to increase the costs of their products. This is especially the case since their rent may increase, along with supplier costs, as other companies and individuals feel the strain of these wage rises. In some cases, you might end up pricing your customers out if you are not too careful.
The minimum wage rises can also affect your business as you might not be paying your team as advantageous a wage as you were previously. This might mean that you need to increase your team’s wages, even if they were already earning above the minimum wage. This can be incredibly frustrating, but if you do not, you may find that your employees are dissatisfied and will look for better-paying jobs.
Whatever you do, it is essential that you are always aware of minimum wage laws and that you implement them as soon as possible. This will stop you from falling on the wrong side of the law.
How can you manage these impacts?
There are several ways to mitigate these impacts and get back on your feet. If you are struggling to get back on your feet even after trying these steps, you might consider speaking to the professionals at The HR Dept. Here, they will be able to guide you on your best course of action, ensure that you are paying your employees correctly and remain on the right side of the law, and inform you of any changes. Additionally, they will be able to help you manage your employee costs and boost your team morale. This will enable your company to continue growing from strength to strength, even in the face of rising challenges.
One of the main and most distressing ways to cope with the extra strain on your finances is by letting staff members go. You might streamline this process by ensuring that roles are still covered by merging certain responsibilities into a single position. This can mean that the same tasks are still carried out at a reduced cost.
However, this can be incredibly difficult for your team members, leading to resentment and a decline in morale. If you are going to implement this, it is essential that you comply with the proper redundancy laws and that you are transparent with your staff about the lack of funding that is necessitating this action.
In some cases, you may also need to stop recruitment drives. This will mean that you are not taking on more staff who will need to be paid, and it will also mean that you are not devoting as much time and energy to sourcing staff that you can no longer afford. Instead, you might consider training up the staff that you already have.
You might also spend some time looking at your staff rotas. You might consider reducing the number of hours people work, especially if they are on zero-hour contracts, and try to create schedules that ensure staff are only in the office when necessary.
You could also try and cut costs in some areas of your business. This is relatively easy to do for most businesses. You can look for new suppliers, find new utility providers, and consider limiting the amount of electricity and gas that you are using. It is possible to do this by allowing your team to work remotely. You may also consider automating some of your processes to eliminate the need for human oversight. This will enable you to allocate your funds to the most critical aspects of your company.