Rob Shaw, managing director at Glu Recruit, looks at how increased costs will affect businesses as the soaring cost of living is set to bite.
Whilst we associate April with Easter, springtime, and new beginnings, it also signifies the start of the new tax year (starting 6th April). This comes with new financial measures that employers and employees need to be aware of.
National Minimum Wage (NMW)
The NMW will rise by 82p per hour in April, amounting to an overall increase of over £1,000 for the average worker. There are, however, differing rates depending on age, so businesses will need to ensure they are paying the going rate.
The new rates are as follows:
l Apprentices: £4.81 an hour
l 16-17 year-olds: £4.81 an hour
l 18-20 year-olds: £6.83 an hour
l 21-22 year-olds: £9.18 an hour
l 23 and over: £9.50 an hour (National Living Wage)
Wages in general
We’ve seen an overall increase in wages over the past 12 months, largely due to the power shift from employer to employee because of the pandemic.
Some businesses have resorted to paying over market value to keep their valued employees happy, which in turn means candidates who are actively seeking a new role are able to demand more.
Remember, an increase in salary also means an increase in other associated costs of employment, such as pension contributions, insurance, expenses, employee benefits and tax.
Increase in National Insurance
Coupled with the rise in wages, employers and employees are facing a tax hike as National Insurance contributions rise.
Employees will have less take-home pay, and businesses’ employer contributions will increase too – both incurring a 1.25 per cent increase. A double whammy for businesses already affected by the NMW increase.
Cost of living
Households will be feeling the pinch of increased food, fuel, and energy costs, but so will businesses.
The energy price cap is increasing by over 50 per cent which will affect anyone with an office or production facility, and there has been a significant rise in fuel costs which will affect businesses who run fleet transport or company cars.
The gradual increase in interest rates stands at 0.75 per cent but is also expected to rise further affecting mortgages, loans, and financing.
Value your vacancy
The need to recruit is stronger than ever as job vacancies hit a record high. With businesses facing increased costs, pitching vacancy salaries correctly is important. You need to be competitive to attract the best possible candidates while being realistic.
Glu Recruit can add value to your recruitment and retention process through their new ‘Value Your Vacancy’ tool. Scan the QR code to see where to pitch your vacancies and start budgeting now.
About Glu Recruit
Glu Recruit are a full-service recruitment agency established in 2016.
We specialise in temporary, permanent, contract and graduate recruitment – offering a tailored solution from entry level to senior management and board level spanning your entire organisation.
As an independent recruitment agency, we focus on the long-term stick of the placement. Whether you’re a candidate looking to make a career move, or an employer looking to add to your team, our thorough and proactive recruitment and retention service ensures you are well looked after!
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