Positive news for young people in employment   

Positive news for young people in employment - Centric HR

With the government announcing that the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase from April 2021, and exciting new schemes being launched such as Kickstart, there is positive news for young people in employment, giving them a much needed boost in these difficult times.

The National Living Wage will increase by 2.2 per cent from £8.72 to £8.91, and will be extended to 23 and 24 year olds for the first time. For workers aged under 23, Commissioners recommended smaller increases in recognition of the risks to youth employment which the current economic situation poses.

Bryan Sanderson, Chair of the Low Pay Commission, said: “The increase in the NLW will mean that low-paid workers’ incomes rise broadly in line with predicted wage growth; and modestly ahead of projected increases in prices, meaning low-paid workers’ living standards should be protected. Commissioners do not believe the increase presents a significant additional risk to employment prospects, beyond the already challenging outlook”.

Although some SME’s may be nervous of the increase, after facing a tough year, there are many potential benefits of paying staff more. One recent study, by London Economics, found that four in five companies that introduced the Living Wage Foundation’s minimum pay levels believed doing so had seen the quality of their work rise, while also reducing absenteeism. That represents a substantial boost to productivity and positive news for young people in employment-a win win situation for all involved. A commitment to pay the living wage can dramatically reduced staff turnover, in turn meaning recruitment costs are significantly down, and businesses are likely to be able to attract higher quality candidates by paying more.

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The new government scheme Kickstart will also ensure a positive solution to both employees and employers. In short, it’s a £2 billion investment by the government to try and prevent young people in a difficult jobs market from becoming reliant on Universal Credit over the long term. Essentially, the Government wants employers to create 6 months work placements for those aged between 16 and 24 and at risk of long term unemployment.

The Government is going to pay employers directly to the tune of the minimum wage, National Insurance contributions and pension contributions (based on a 25/week placement). So, the idea is that a young person at risk of long term unemployment gets a placement and some valuable experience/training while the employer gets additional resource that the Government foots the bill for.

The Kickstart Scheme will give young people the chance to build their confidence and skills in the workplace, and to gain experience that will improve their chances of going on to find long-term, sustainable work. In turn SME’s will gain valuable staff and support to expand and grow their business, a positive outcome for all involved.

For further information on the Kickstart scheme please contact us here.

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Sandra Berns

Sandra Berns

Centric HR was founded by Sandra Berns, a confident and versatile Human Resources and Organisational Development Practitioner with 25 years demonstrable experience and a Fellow of the CIPD. Sandra has both Operational and Strategic HR expertise across Public and Private sectors and has assisted senior teams in meeting challenging workforce objectives in many corporate environments.