The national living wage has already started to influence the way businesses are behaving.
Chief Executive of Whitbread, Andy Harrison, has announced plans to lessen the impact of the National Living Wage by improving productivity and increasing prices. The increased rate of pay, which will come into force in 2016, is expected to increase costs for Whitbread by around £20m annually.
The new higher rate of pay is expected to increase costs for Whitbread, which owns companies including Costa and Premier Inn, by around £20m annually.
Harrison said: ‘We shall mitigate this substantial cost increase over time with a combination of productivity improvements, boosted by investment in systems and training, efficiency savings and some selective price increases.’
Other reports have indicated that the National Living Wage will lead to employers focusing their recruitment campaigns on younger people, who will not be entitled to the higher rate of pay until they reach the age of 25. However, employers must be aware of the risk of discrimination, if focusing recruitment on younger people solely for cost purposes.