Cumbria’s low-wage service sector – the hospitality industry in particular – will be hit hard by the introduction of the National Living Wage, new research shows.
Job losses in retailing are predicted but the findings suggest most hotels, restaurants and pubs will take the higher wage bill in their stride.
Specialist property adviser Christie + Co commissioned research to assess the impact of the National Living Wage, which comes-in in April. Over-25s will be paid at least £7.20 an hour, rising to £9 by 2020.
This replaces the National Minimum Wage, currently £6.70 an hour for over-21s.
Christie + Co found that, across all sectors of the UK economy, 23 per cent of employees will receive a pay rise by 2020 as a result of the changes.
But overall, employers’ wage bills will rise by only 0.6 per cent.
However, the hospitality, care and retail sectors will suffer much greater impacts. Between 46 and 51 per cent of staff will get pay rises by 2020, with total wage bills rising by between 2.0 and 3.4 per cent.
The report predicts 80,000 jobs loss in retailing as supermarkets and convenience stores reduce opening hours to offset higher wage costs.
Chris Day, managing director at Christie + Co, said: “In our view, competent quality operators will weather the storm as far as the National Living Wage is concerned, and will find ways to mitigate the impact either through economies of scale or innovative solutions.
“Whilst implementation will undoubtedly create challenges, it would appear that most operators are proactively tackling it and drawing up inventive plans to limit the impact.
“Within the care sector, those operators with leased models at full market rent will need to renegotiate their rental obligations to avoid the risk of forgoing their leases.
“Operators in other sectors with long-term fixed-price contracts will almost certainly experience difficulties going forward but, in most instances, operating margins should have enough of a cushion to absorb the impact, and quality operators will find ways to offset this.”
Premier Inn and Costa Coffee owner Whitbread predicts the National Living Wage will initially add £20m a year to staff costs although it hopes to absorb the increase without raising prices.
But Marston’s, which owns the Cockermouth brewer and pub operator Jennings, has said it expects only a “moderate” impact.
Sixty per cent of Marston’s employees are under 25, so are not covered by the National Living Wage.
PLEASE!!!!!!! USE THE SCENARIO PROVIDED!!!!!!!!
1a) Analyse the role and purpose of human resource
Management in the hospitality industry.
1b) Justify a human resources plan based on an analysis of supply and demand which discusses factors such as government legislation, economic trends, demographic changes and technological developments for a selected business in the hospitality industry
2a) Assess the current state of employment relations in the hospitality industry. Consider the role of unionisation, for example, collective bargaining, negotiation, consultation, employee participation, involvement and conflict management, grievance procedures and disciplinary procedures.
2b) Discuss how employment law affects the management of human resources for a selected business in the hospitality industry. Consider relating to latest employment Acts and think about elements such as Pay, retirement, maternity and paternity rights, redundancies, terminations .
3a) Discuss a job description and person specification for your chosen job in the hospitality industry .
3b) Compare the selection process from the job you have selected above to a different job of your choice in a different service industry .
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