Nottingham specialist security firm Octavian Security is calling on the Government to rethink its plan to increase the National Minimum Wage (NMW) from £6.31 to £7.00 an hour, a rise of 11%, with the company’s group CEO Sukhi Ghuman warning that it could put hundreds of jobs at risk.
“Hard working individuals deserve a decent wage and standard of living and inflation appears to have hit lower paid groups in society particularly hard, however I am concerned that the proposed increase is going to put additional financial pressures on lots of businesses who are already struggling,” said Sukhi. “Many may find the additional burden simply too much which in turn could have serious consequences for the job market.”
“The manned security industry is one of the sectors that will be particularly hard hit by such a large increase in the NMW because of the nature of its workforce,” says Sukhi. “It already operates on very tight margins and this makes it impossible for companies in the sector to absorb all of the extra costs of such an increase.”
“We know from past experience that some clients will allow the increases in statutory costs like this to be passed on, but the majority will not which means that businesses will be forced to pick up the extra cost themselves. In some cases this will be more than the total profit margin. Many companies will be able to withstand this but lots of others won’t and we foresee that some will simply not survive. It will be a same story in other sectors whose workforce profile is similar.”
Octavian, since it formation in 2003, has always strived to pay higher rates to its staff in order to attract and retain high calibre people. Its view is that such people are more interested in performing their duties to a high standard and are dedicated to providing a better overall service to the company’s clients – blue chip companies and public sector organisations in the UK and internationally. Such a strategy has paid off over the years with the company building an enviable reputation in the market and retaining a happy and loyal workforce. It currently employs over 700 security officers.
“I am concerned though that this announcement coinciding with the new Workplace Pension Contributions which are currently being phased in, the full effects of which have not been yet been felt, may prove too much for many companies,” concluded Sukhi.
