National Living Wage will have a big impact, says industry


How is the industry reacting to the upcoming National Living Wage? Will it prove difficult to implement?

Jonathan R. Stapleton, general manager, The Royal Crescent Hotel
People are our greatest asset and as such we should always be prepared as a business to ensure that our people are properly compensated and recognised for the significant contribution they make both individually and as a team, to both the top and bottom line. Especially those people on the front line who matter most to the customer journey and experience. At The RCH we welcome this improvement in the living standards that an increase in the national wage living allowance will hopefully bring to those people on which the hospitality business is ultimately built. Increased labour cost at the ground floor may indeed mean that people at the top will need to consider how much they are being paid and whether or not this is cost effective, sustainable even.
We are a people business, which has never been solely about profit.

Rafi Bejerano, director, AB Hotels
The National Living Wage is hitting us hard and the rise is not gradual nor is the notice given to us to implement the changes. I believe many hotels will struggle and will have no choice but to offload staff. We are looking at it like yet another cost we must endure and turn our focus to delivering more revenue to counter the wage increases which will cost us hundreds of thousands.

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Kathryn Hancock, human resources manager, Rockliffe Hall
The National Living Wage will certainly have an impact on the payroll budget for most hotels. It’s not just about increasing the hourly rate of pay to £7.20, but also maintaining the differential between team members and supervisors. However, on a positive note, it will hopefully increase the number of job seekers and enhance the potential talent pool for the industry. It could also lead to some hotels trying to recruit more young people on apprenticeship schemes to help lower their payroll costs.

Sean Evans, owner Sweeney Hall Hotel
With the staff to customer ratio you need in this industry, to offer the level of service that is expected, it can have a serious impact on the amount of staff you will be able to afford to do the job.
As a small business we work within a tight budget already and staffing costs are our biggest overhead. The industry as a whole may have to start looking for staff purely under the age of 25, where does that leave the older more experienced staff? If people lose their jobs due to this, surely the term Living Wage is a misnomer. Costs have to be saved and they cannot be passed on to the customer.

Anthony Cox, general manager, Danesfield House
Preparing for April is just the start with the goal to reach £9.20 per hour by 2020. For businesses outside of London in particular, where the last couple of years has seen some light at the end of the tunnel in terms of profitability, contingencies will have to be made to protect the bottom line. But let’s not forget that during the recession and the period after, there has been very little wage growth in real terms, with annual pay awards for those earning more than the minimum wage fairly static. So it is probably time to address this. That said, with recent UK growth revised down and the recent uncertainty in the markets, let’s hope a re-think by the Chancellor isn’t required down the line should the economic outlook deteriorate.