The National Living Wage is coming, and operators across the UK will be trying to work how they can afford it. It will certainly be a challenge in a sector that has long relied on fairly low-paid staff, but we believe it presents an interesting opportunity to upgrade the industry.
Although it’s long been campaigned for by organisations such as the Living Wage Foundation – which has its own recommendations on rates of pay – until now nothing has been legally enforceable. But all that’s changing in April, when a new Living Wage structure comes into play that’s compulsory for over-25s: hourly rates will start at £7.20 (the current minimum wage is £6.50) and gradually rise to £9 an hour by 2020.
So how will UK operators respond? Will some try to avoid all this by quietly favouring under-25s, hoping to avoid age discrimination claims by hiding behind the fact that many gym instructors are already young? It’s hardly an ethical approach, but it’s easy to see how it might come about.
If so, and the Living Wage is embraced only by a minority of operators, it could lead to a two-tier structure within the sector, with businesses that are willing to pay the higher wage gaining a competitive advantage: securing the best staff, offering a different class of product based on high calibre support – and justifiably charging a premium for these services.
Alternatively, if all operators embrace the Living Wage, the entire industry could see a shift in standards. This in turn would create a real opportunity to meet the ambitious goals the sector has already set itself: co-operation with the medical profession, partnership with public health, staying relevant to an increasingly self-sufficient consumer. These ambitions require staff to be more highly qualified – not to mention richer in both people and life skills – than is typically the case today.
So let’s use the Living Wage to our advantage, asking not if we embrace it, but rather how it can best work for us. Yes it’s disruptive, but it presents a perfect moment to upskill the workforce and improve the sector’s credibility.
For example, we could introduce a raft of compulsory CPD alongside the Living Wage, helping employees attain skills and standards that reflect their higher pay.
But however positive the opportunity, the question of how to afford the Living Wage remains – at least until a critical mass of members agree gyms’ services are now worth paying more for.
Operators will be looking at their overheads and wondering how much further these can be pared down – but Jessica Higgins, head of employment for Christopher Davidson Solicitors, says it isn’t all bad news: “Some businesses already paying the Living Wage report reduced costs through lower levels of staff absenteeism and turnover. It’s likely to improve productivity and morale too, and with it drive better customer service.
“Also, pay for many fitness employees includes bonuses, sales commission and/or performance-related pay, which already counts towards the Living Wage.”
Meanwhile CIMSPA CEO Tara Dillon points to apprenticeships as another way to balance the books: operators who invest in these could, she says, see the new apprenticeship levy working in their favour, offsetting the cost of implementing the Living Wage (see p32).
It won’t be easy, but the Living Wage represents a great opportunity to upskill our sector. Let’s not be afraid of it.
Kate Cracknell, Editor
@HealthClubKate
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