The financial impact of the Living Wage on the Food Sector

The companies involved in the supply of our food, here in the United Kingdom, are amongst the hardest effected by the introduction of the New Living Wage, with many struggling to counter the financial costs incurred. Our work shows that there is only one real approach to sustainably meet that impact.

The United Kingdom’s Food sector is feeling the financial impact of the New Living Wage especially as the sector employs large numbers of staff, according to the Food and Drink Federation 400,000 staff are employed across 6,620 companies. Many of those fall into the bracket that are effected by the salary increase announced at last year’s budget.

Many companies have voiced their support for NLW but are struggling to pay for it. Flexible working hours have been introduced with little financial benefit. Equally, investment in automation is not yielding answers because companies are finding this an increasingly difficult avenue to gain returns on as their portfolio of products becomes ever more complicated. Companies who have followed a path of continuous improvement or traditional lean manufacturing have also reported disappointing results compared to the effort invested. The only true, sustainable answer is to gain quantum improvements in productivity, the good news is that new approaches and techniques are available to gain those improvements where traditional methods have proven inadequate. If you would like to share in our experience please contact us below.

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