We make no secret of the fact that our advertising services are particularly effective with junior roles; roles which are currently paying thousands above the current minimum wage, but within three years, will be under the minimum wage!
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When discussing figures, I will use a working week of both 7.5 hour and 8 hour day, with 260 working days a year, meaning a total of 1950 and 2080 hours a year respectively. I will also be using the minimum wage for adults over 25.
The current minimum wage is £8.72 an hour, meaning an annual salary of between £17,004 and £18,137.6.
From April 2021, the minimum wage is set to increase to £8.91 an hour (+2.2%), giving an annual salary of between £17,374.50 and £18,532.80 a year.
The greatest difference however is that this wage will – for the first time – be available to 23 & 24 year olds!
In 2019, the government aimed to have the national minimum wage at £9 per hour by 2020, which has evidently not been met. There have been no further declarations as to the future movements of the national minimum wage.
The effects on recruitment
Will this significant increase in pay have an impact on your recruitment strategy? According to the Resolution Foundation, based on a survey of 800 employers, only 27% have made staffing changes because of the change to the minimum wage. Incidentally, smaller employers (companies with less than 50 employees) were leased affected by the changes.
What will this mean for salaries of other jobs?
With some junior graduate jobs currently being advertised at around £23,000 a year (which, provided the employee is under 25, is likely to be completely legal in the future). But will that level of salary be motiving enough for a graduate? Especially knowing that if they were only a few years older, they could be paid the same without their degree? With the low unemployment rate, it is very much an employee job market at the moment. You need to make your roles attractive to employees, which doesn’t necessarily mean through higher salaries; company life style is crucial for a lot millennials when choosing a job.
According to savethestudent.org, the average graduate salary is £23,000 per annum with a lower end of £19,000. Gradudate-jobs.com support this, as they estimate the average graduate salary to be around £21,000 to £25,000.
Either way, the point which I am trying to make is that employers are going to have to consider considerably increasing their base salary levels to distinguish their graduate roles from other jobs which, historically might have been paid £5,000-£7,000 less a year; is it reasonable for graduates to still expect that salary differential?
Going back to the original question of “How will the increased minimum wage affect your recruitment strategy”, for a lot of companies, I can imagine that remuneration packages will need to be re-evaluated at all levels of the business. We all know that 7.7% salary increases for all staff a year for three year is a particularly unlikely outcome!
For more specific average salary information, visit check a salary.com