Employers' response to the introduction of the National Living Wage
Ipsos was commissioned by the Resolution Foundation to survey employers on how they have responded to the introduction of the National Living Wage (NLW) for their report "The first 100 days".
Ipsos was commissioned by the Resolution Foundation to survey employers on how they have responded to the introduction of the National Living Wage (NLW) for their report “The first 100 days”.
The survey of 500 businesses, carried out in the weeks running up to the referendum, is the first major survey of business responses to the NLW since the policy’s introduction on 1 April. It finds around a third (35%) of businesses say the NLW has increased their wage bill this year, though only 6% said it had to a large extent. A further 16% of firms expect the NLW to increase their wage bill at some point in the future.
The report finds the initial response of employers has been to raise prices or reduce profits rather than cut jobs:
- Of those who say their company has been affected by the NLW, the most common short-term action taken has been to increase prices (36%), followed by taking lower profits (29%).
- One in seven firms say they have already invested more in training (15%), and that one in eight (12%) firms report having invested more in technology.
- Roughly one in seven firms (14%) whose wage bill has increased say they have used fewer workers, offered fewer hours to staff or slowed recruitment. Just one in twelve (8%) say they have reduced aspects of the reward package, such as paid breaks, overtime or Bank Holiday pay.
Technical note
500 telephone interviews with businesses were conducted between the 6th and 16th June 2016. Interviews were conducted with the main financial decision-maker in the organisation. Quotas were set to be representative of the UK business population (minimum turnover £50k) by number of employees, turnover, region and sector. Data was weighted to be representative of the population.
