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Hospitality workers are unaware of the “dire economic implications” that the new National Living Wage (NLW) may have, claims a new study.
The study – from job site CVLibrary – claims that hospitality workers are “eagerly anticipating” the boost in wages from the NLW which comes into effect on 1 April, yet remain unaware of the negative implications on jobs that it may have.
The survey of over 1,000 UK workers, found that hospitality workers are among the most supportive of the NLW, with 80.6% believing it will have a positive impact overall.
When asked why the living wage will be beneficial, sector workers said; “I will personally earn more money” (37.9%); “It will be better for the economy as a whole” (31%); and “the current minimum wage is not fair” (27.6%).
The study said it is “unsurprising” that making more money is a key concern for industry professionals, as 59.5% of hospitality workers are earning the current minimum wage, and of those 80.9% are either unable to save money or are in debt.
In addition, the research revealed that hospitality workers are largely unaware of the negative implications that critics say the NLW will have for small to medium-sized enterprises (SMEs). Some 47.2% in the industry admit to being unaware, compared with just 35% nationwide.
Meanwhile, 91.7% believe SME job creation is important to the UK economy, and despite supporting the rise in wages, 75% believe it will be a threat to SME staff and a further 47.2% think it could result in a hiring freeze.
Lee Biggins, founder and managing director of CV-Library, said: “With the new National Living Wage being implemented next week, it’s clear that there is a divide in those that understand how it will affect current and future job prospects, and those that don’t.
“What we do know is that hospitality employers need to ensure they understand how the regulation affects them personally, including the implications of failing to pay a worker what they are legally entitled to and the potential need to reduce headcount to fund the extra expense.”
He said that many sector professionals are employed by smaller companies, but these individuals could be “left in the dark” if SMEs don’t prepare for the impact of pay increases on jobs.
He added: “If these organisations want to retain top talent and find the right candidates to help their businesses grow, they will need to communicate effectively with current employees about the changes and invest in an effective recruitment strategy to ensure they remain competitive in an ever-crowded labour market.”
