Most of us should all now have heard of the Government’s new National Living Wage. This is not to be confused with the voluntary Living Wage which is promoted by the Living Wage Foundation. It is the latter which increased by 40p on Monday. The National Living Wage is going to be introduced by Government in April 2016 and is something all employers have to pay to staff over the age of 25. But is it universally supported?

Costs to rise?

From April 2016, companies will have to pay their staff a minimum of £7.20 per hour for those over 25 years of age, rising to above £9 by 2020. I know that many companies in our industry, including our own family run business, already pay more than £7.20 per hour.

However some do not. It’s not known how many window and door companies, be it installer, fabricator or sysco, this new law affect, but it’s probably safe to say a good proportion will have to raise the wages they pay. Not a bad thing, especially if you’re the employee benefiting from the raise in pay. Can businesses say the same though?

I was listening to BBC Radio 5Live on a foggy Monday morning to work and they had a Director of a fairly big company (didn’t catch who) being interviewed. It was his opinion that if businesses can afford it, they should look to raise their wages, if they haven’t already done so. Whilst I think we can all agree that morally this is right, there will be some businesses that are already hovering on that line between breaking even and making a loss that will not be looking forward to next April.

So could costs rise?

Cuts in R&D

Companies that can’t afford to just give their staff the extra cash, the only option left open will be to raise costs to help pay for the rise in wages. I received an email on Monday which backed this point up. In it, the sender told me that KPMG and Manchester council will be reviewing the effects of the National Living Wage in April.

It went on to say that a large number of companies were expected to raise costs to pay for the rise in wages, and to compensate that, capital expenditure and R&D departments may be hit.

That report will be worth a read I’m sure. And it is a fair point that is raised. Business would naturally rather not eat into their margins if they don’t have to. So will window and door companies prefer to raise their prices to cover for the rise in wage costs? Will they sneak those prices in? Will they be open and tell their customers that the costs are coming? Time will tell.

The one thing I would be concerned with though is if research and development departments were hit as a result of these wage rises. They have been in overdrive for the past few years and the industry has benefited massively from an array of extremely efficient, sleek and innovative range of window, door and roof products that have propelled our industry way ahead of where it was just a few years ago.

There are more questions than answers at this point. But I would like to hear from both employers and employees about this issue. The comment section below is your place to leave your views.

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