Publicans are mulling over whether a rise in beer prices, a focus on young staff or a cutting down on overheads could be the way to deal with a minimum of £7.20 an hour for employees older than 25, which comes into force in April.
Employing older staff discouraged
The new living wage only applies to employees aged 25 and above, so licensees could be swayed to opt for younger workers.
Glen Duckett, licensee of the Eagle & Child, Ramsbottom, Lancashire, said the rise ‘discourages’ publicans from employing older staff.
He explained: “People will employ depending on how old you are. You could employ almost two 18-year-olds on minimum wage at the same cost as one person over 25.”
Duckett is planning to focus on employing young apprentices.
“It’s about gathering the right staff now for the preferable rate. Youth unemployment is still a big problem,” he added.
The licensee is concerned about numerous additional burdens this year because the Government has not extended a retail relief scheme worth £1,500 to small businesses.
“It’s come so quickly and there’s not enough support for small employers. Look at the VAT in hospitality — it’s not in line with the rest of Europe,” he said.
“The economy has not moved forward as much as we would like. It’s worrying — some businesses will go under because of it.”
Duckett argued that the massive contribution of small businesses to reducing unemployment will be compromised.
“We’ll just have to try to drive sales where we can. Some cost will have to go on to the customer but you can only do so much of that, and the increase is quite substantial,” he added.
Reducing opening days
One option is to cut down on overheads. Helen Greer, licensee of the Feathers Inn, Stocksfield, Northumberland, has been forced to rethink the pub’s day-to-
day offer.
The pub will now only open five days a week, down from seven.
“And we used to be open for lunchtime every day, now we won’t be able to on weekdays,” she said.
“We’re concerned about it. This year is going to be really challenging. We don’t think the economy is sufficiently buoyant; trade is not as good as pre-recession. It’s going to be hard.”
But Greer is optimistic that the changes will be good for staff, despite having to cut down hours.
“We are planning on a better work-life balance. People work really long anti-social hours.
“They now have time off to see their families, two days off in a row on Monday and Tuesday, and a chance to go away. It’s more rewarding,” Greer added.
Reaping the benefits of paying more
But for some pubs, the legislation changes nothing. Tim Hore, licensee at the Victoria Inn, Salcombe, Devon, already pays at least £7.20 and has done so for three years. He said the pub has been reaping the benefits.
“We retain staff, there’s a low turnover here,” he explained. “It means we have great staff for longer, and the pub runs much smoother.”
It’s a similar story at the Anchor, in Wingham, Kent. Licensee Kevin Abbott said: “To attract the best staff you have to pay a good wage. And it’s bloody hard work to be honest.
“If you get good staff they bring people through the door. Talented staff with excellent customer service skill make a difference — it’s a false economy to pay the minimum wage.”
Few would disagree that the living wage is just rewards in a demanding industry.
Tom Gee, licensee at the Red Lion Inn, Cricklade, Wiltshire, already pays close to the living wage.
He said: “If you pay the right level, you get good service. Most of my staff have been here for eight years, and pay is a part of that.”
Geography plays its part
But the Victoria Inn, the Anchor and the Red Lion Inn are all based in southern England, and some licensees argue that geography plays a vital role in how manageable the wage hikes are.
John Ellis, licensee of the Crown Inn, Oakengates, Shropshire, said: “London is a little bit different.
“It won’t affect them too much, but for those of us who don’t live down there we can’t charge £5 or £6 a pint. Our price starts at £2.70, we might as well be on a different planet!
“Outside of London there’s a delay. When they say we’ve moved out of the recession, we don’t think it’s quite there yet.”
Ellis is yet to decide how to compensate for the extra costs that will be accrued at the Crown Inn.
He continued: “We’re still working on it. We’re looking at the whole business prop-osition. We’re going to have to decide what gives and what doesn’t, because something has to.
“I don’t think other tax burdens, business rates, beer duty and all the rest of it have been taken into consideration,” he added.