Industry insight from our Accountancy and Finance Recruiter, Demi Walker:
Last year, the 2025 Budget was announced, and along with it, some changes to employee wages from April 2025.
Having worked in finance before I joined Glu, getting on top of these changes is crucial and understanding how they will impact you, your staff, and any future hiring strategies is key.
What employers need to know
Here’s the breakdown of the upcoming wage increases and who they affect:
1. National Living Wage for 21+: This will rise by 6.7%, moving from £11.44 to £12.21 per hour.
2. Minimum Wage for 18-20 Year Olds: Rising from £8.60 to £10 per hour.
3. Apprentices: The biggest pay boost, going from £6.40 to £7.55 per hour.
With these updates, it’s important for every business hiring employees in these age brackets to make the necessary preparations, from budgeting to payroll, to ensure you’re compliant by April 2025.
Four simple steps to staying ahead
1) Adjust your budget and salary banding
Why? With the new rates, it’s crucial to factor these changes into your wage budget. This is especially important if you have a particularly large team with lots of hourly workers, apprentices or younger employees.
How? Adjust your budgets for both new recruits and existing employees. Standing out in the competitive market is now more crucial than ever.
2) Update your payroll system
Why? Underpaying employees due to outdated payroll settings could be a real pain for you, your payroll department and more importantly your staff. Be proactive from the get-go and ensure everyone that needs to be prepared, is prepared.
How? Ensure your payroll system and processes are ready to implement these changes come April 2025. Why not have practice runs with your finance team? Practice makes perfect!
3) Foster open communication with your team
Why? When wage changes come from a government announcement, it would be naïve to say that everyone knows about it. Take the lead in communicating these changes – keep building the trust!
How? Meet with your management team or departments and share the new wage details. Set aside times for questions or queries and remain open and honest.
4. Review your recruitment strategy
Why? With these wage increases, you may find yourself attracting a broader pool of candidates, including apprentices and younger workers. With hourly rates increasing, its now more important than ever to stand out in a competitive market.
How? Adjust your recruitment budget and revise job postings to highlight the new, competitive pay rates. This is a great chance to attract fresh talent and retain a stronger, more engaged team.
Time to plan ahead!
The new 2025 wage rates can have a positive impact on the retention of your existing staff members and recruitment too. Preparing now, from payroll adjustments to effective communication, means you’ll be ready to navigate the new landscape with confidence.
Remember, if you have any questions about the upcoming changes, or want to chat about what this means for your business, get in touch today!
