The November 2023 announcement of a nearly 10% rise in the National Living Wage has sent ripples through Britain’s economy and workforce. As a recruitment agency working with both employers and job seekers across industries, Cogent Staffing wants to ensure our clients and candidates understand these imminent changes to minimum wage standards. We will outline exactly what the new minimum wage means in monetary terms, which age groups are impacted, plus considerations for payroll budgeting and career planning.
With such a substantial increase driven by widespread pay growth, all organisations and individuals will need to adapt accordingly. By leveraging our labour market expertise and connections, Cogent Staffing is committed to helping clients and candidates navigate through this transitional period smoothly. Whether you are an employer determining new staffing costs or a job seeker qualifying for higher earnings, this overview explains the extent of the changes and offers tailored guidance on preparing for the rise.
Let’s explore the specifics of the 2024 UK minimum wage update, who needs to comply and how businesses and employees can best position themselves before implementation this April.
What are the changes?
Over 21
The National Minimum Wage will be £11.44 from 1st April 2024, an increase from £10.42. This now applies to anyone over 21, whereas previously it only applied to anyone over 23.
In salary terms, this means that someone in a full-time permanent role working a 40-hour week will earn a gross annual salary of £23,795.20, up from £21,673.60.
18-20 year olds
From 1st April 2024, the National Minimum Wage for 18-20 year olds will be £8.60, up from £7.49.
In salary terms, someone in full-time permanent employment working a 40-hour week will earn a gross annual salary of £17,888.00 up from £15,579.20.
16-17 year olds
From 1 April 2024, the National Minimum Wage for 16-17 year olds and apprentices will be £6.40, up from £5.28.
In salary terms, someone in full-time employment working a 40-hour week will earn a gross annual salary of £13,312.00 up from £10,982.40.
National Insurance thresholds also went down in January 2024, from 12% to 10%.
What this means for clients
As employers ourselves, we understand the potential impact these mandatory wage increases can have on payroll and profits. To ensure a smooth transition for your organisation, we suggest taking the following steps:
Review budgets and make adjustments – Look for areas where you can optimise costs to accommodate higher wage expenses. Assessing expenditures now allows time to plan.
Update contracts and payroll systems – Don’t wait, make sure employment policies and payment procedures align with new legal wage regulations. This avoids confusion down the line.
Communicate proactively with staff – Transparency regarding how this financially impacts the company and why the change is occurring builds trust and morale.
Re-evaluate hiring needs – Do you expect lower applicant interest for certain roles due to broader industry impacts? Our recruiting teams can source candidates even in tight labour markets.
Lean on recruitment experts – This is a time of flux; leverage Cogent Staffing’s market insights on salary benchmarks and talent availability so you can set appropriate budgets.
What this means for candidates
As advocates for employees and job seekers, we want to ensure our candidates understand how this significant wage increase can benefit them:
Know your rights – Employees over 21 working full-time are entitled to earn at least £11.44 per hour under new rules. Verify with HR if unsure.
Reassess personal finances – With more earnings, now is an ideal time to build savings, pay down debt or work with a financial advisor to plan usage of extra funds.
Develop professionally – Higher wages often mean greater expectations. Look for training and upskilling opportunities to stay competitive in your role or take on more responsibility.
Ask about benefits packages – Some employers may offset higher wages by reducing benefits offerings. Make sure you understand the full compensation and advantages of any new role under consideration.
Contact us – Our teams provide support, advice and access to openings with employers implementing these higher salary standards.
This National Living Wage increase aims to improve living standards for UK workers in response to inflation. As specialists serving both employers and job seekers, Cogent Staffing is well equipped to guide clients and candidates through these changes. Reach out to us today on 01422 413 813 to discuss how we can help you best prepare.
