Employers ‘cutting hours and hiring less to offset minimum wage rise’

Employers are cutting back hours and hiring less to cope with the rise in the National Living Wage, the boss of one of Britain’s biggest recruiters has said. James Reed, chief executive of Reed, said April’s 9.8pc increase in minimum wage was already being reflected in hiring patterns. Mr Reed said: “We have seen some employers changing their behaviour. “They might be taking on people for shorter periods or fewer hours or fewer of them because of the increasing cost.” The National Living wage rose from £10.42 to £11.44 last month, while workers under the age of 21 and apprentices were given even larger boosts in relative terms. The recruitment boss said that for employers with large numbers of low-paid staff, the rise was “very significant”. He warned the mandatory pay increase was coming at a time when companies were also dealing with broader inflationary pressures. A closely watched survey of purchasing managers in the services sector last week showed the wage increase had fuelled the sharpest uptick in cost pressures in eight months. It noted that some businesses have reported hiring less to cope with wage pressures. Mr Reed said: “My worry is that if those minimum wage level...

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