Minimal Wage Order of 4.8% for the lower paid.
Like all changes it will benefit some and not others. In the first instance increases given to the lower paid normally find its way back into the economy via increased retail sales which at the moment could be very important for that market segment.
On the other hand many businesses which are of the opinion that to increase prices would result in a considerable reduction in volume have to make some hard decisions.
If your business has staff costs as a high percentage of expenses there is no option but to increase the productivity of each person employed and this starts with
Reduction in staff numbers through
Multi skilling.
Work practices – can that task be completed cheaper or quicker?
Out sourcing where cost effective
Early retirement?
Redundancy
Joint venture with another business so certain costs can be spread
Eradication of non income generating services
Evaluation of service/product costs so that you concentrate your business on the items which provide the higher gross margins where possible.
This is a wonderful opportunity to truly questions every expense area not just staff costs.
How about accountancy, IT, delivery, warehousing, rents, communications etc.
On numerous occasions a business comes out of this situation more efficient and more profitable than before. Sometimes change has to be forced onto us or at least give us a reason to take what some may consider drastic action.
Just think if through some effort, planning and making hard decisions you produce a business more profitable, better organised and with higher paid staff. Would this business not have a better future for all involved staff plus management than it did prior?
It is interesting to watch the stock market and how it reacts when the going gets tuff. In the case of two insurance companies ( QBE & IAG) both facing the same challenging environment and yet the market believes one company has better management skills and systems than the other and therefore its price does not get as heavily discounted as the others.
How would the market judge your management skills and systems?
FOOD FOR THOUGHT
