From 5th April 2025, the National Living Wage (NLW) will rise to £12.21 per hour for employees aged 21 and over. This equates to an annual salary of £23,810 for a full-time employee working 37.5 hours per week. Additionally, the Employer NIC rate will increase from 13.8% to 15%, and the threshold at which employers start paying NICs will drop from £9,100 to £5,000 per annum.
Cost Impact
These changes will result in an increasing wage costs for many businesses . While some businesses may be able to offset some of these additional costs through the increased employment allowances or through price adjustments, many will need to focus on operational efficiencies and improvements in productivity.
Simple Steps to Help Businesses Reduce the Impact
1. Plan Rotas by Department
Gig Grafter calculates gross wage costs in real time, including Employer NIC and pension contributions.
Department-specific planning makes it easier for managers identify specific areas where savings can be made and productivity improvement achieved before publishing rotas.
2. Group Employees by Skills & Experience
Organize employees into skill-based groupings to make shift allocations easier and avoid higher costs from assigning senior staff to tasks and roles that are more suitable for junior staff.
This process can also highlight gaps in skills and experience that can be addressed through flexible working and part-time roles.
3. Set Clear Rota Budgets
Different employees have different wage costs based on their age, roles, skills and experience.
Gig Grafter enables managers to set weekly wage cost budgets and ensure that each staff member is assigned to shifts and roles that are most appropriate to their skills and qualifications. This enables businesses to operate more efficiently and manage wage costs effectively.
4. Use Rota Templates Instead of Copying Previous Weeks
Copying last week’s rota without adjustments can lead to creeping wage increases over time.
By starting each week with a standard rota template ensures that any additional shifts assigned are based on current needs, preventing unnecessary costs from carrying forward from previous weeks.
Additional Cost-Saving Tips
If eligible, make sure you are receiving the increased Employment Allowance – now rising from £5,000 to £10,500 which will help offset some of the Employers NIC costs.
Invest in training and development to improve efficiency and productivity.
Explore tax-free employee benefits, such as health and wellbeing programs, as an additional option for rewarding employees.
By implementing these strategies, businesses can better manage the impact of rising employment costs while maintaining productivity.
About Gig Grafter
Gig Grafter is a Northern Ireland technology company founded by Newry brothers Barry and Ciaran Lynch. Barry and Ciaran have first hand experience in managing a flexible workforce as part of their previous business - Nifty Nosh (t/a niftynosh.com) which was acquired by Just Eat Plc in 2015
Our award winning Cloud Workforce Management Platform is used by clients in food and convenience retail, hospitality, leisure, residential care, retail pharmacy and manufacturing settings across Ireland and the UK.
To learn more visit our website - https://www.giggrafter.com/