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Low Pay Commission
8th Floor
Oxford House
76 Oxford Street
London
W1D 1BS
General enquiries:
020 7467 7207 Press enquiries:
020 7467 7279
E-mail: lpc@lowpay.gov.uk
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THE NATIONAL MINIMUM WAGE AND TRAINING
Research report commissioned by the Low Pay Commission
>>Back to main index
Appendix 2: Case Studies
(a) Resort Town
The Home for the Elderly Mentally Infirm
This has been a private care home for fourteen and a half years and caters for 25 residents. It was originally founded as a residential home in 1991 but has since shifted to the care of the elderly mentally infirm (EMI). Six beds are now dual registered, so they can be residential or nursing beds. The full quota of staff is 36 and many work part-time. A nurse is on duty twenty four hours a day. The nurses are registered mental health nurses or registered general nurses and deal with the range of residents. A nurse manager is responsible for managing nursing care.
The home itself is a graceful Victorian building, in need of some remodelling to bring it up to date. Originally a hotel, it was chosen as being very suitable for people with mental health problems because it has extensive grounds. Half the residents are local and the rest from other parts of the UK. The residents often have a high degree of physical frailty but most are referred with mental health problems and some have Alzheimer's disease.
Key Issues
In the last ten years the type of resident has changed and they are now more frail when they come into the home. New legislation relating to residential standards will have a major impact because a number of double rooms are in use. These will be converted to single rooms and the home will lose income, but it has to do this to comply with the legislation. From April 2002 an extra allowance of £27 a week will be paid for EMI residents for their nursing care. This relatively small increase is accompanied by extra paper work. The owner perceives this as a burden which does not contribute to investment in the building nor in staff training.
Staff retention in the summer months is a problem because of the availability of seasonal employment. The owner argued: 'It's because we are in a holiday area …..we are fully staffed in the winter but come the summer time they will drift away. … Our care staff have a multitude of skills other than working in residential nursing homes. They know how to pull a pint of beer, chamber-maiding, holiday camps and all sorts of things they do and then they come back again in the winter!’ The owner puts this ‘drift’ down to the long hours, the low pay and the hard work of caring in this home.
Staff
There are two shifts of four carers every day, a cook, a laundry person and three other domestics. One domestic worker makes beds. A nurse supervises and nurses but is not insured to carry out nursing procedures on residential patients. They come under the jurisdiction of community nurses. The client group requires specialised care and even experienced care assistants who have worked in other homes can not necessarily cope with EMI residents. Despite the difficulties and specialised nature of the work they receive the same pay per hour as in other residential homes.
Training
The owner said that she strongly believed in training her staff. A number of staff are currently working towards NVQ 2. The owner suggested that NVQ in care was not totally relevant to EMI because of the nature of the client group. The owner makes decisions about training. Younger staff study on free courses leading to NVQs at college but training older staff is expensive and the owner feels she can only afford to train two a year and that she needs to select staff she wants to retain. New training standards demand that staff have an induction course, which is provided via a video. The owner prefers to focus on one aspect of training at a time. 'Fire at the moment is my priority because you can't focus in on everything. We are generally upgrading and improving and being more professional about it. It is a rolling programme'.
The impact of the NMW
In this home the staff wages account for up to 69 per cent of the expenditure of the home. The owner appreciated how hard her staff worked and how much she had to rely on their good will to keep the home running. 'It is, it's an embarrassment to me as an employer to pay some of our staff what I pay them because they work very hard and they should have more but I have to balance the books at the end of the day'. Most carers earn near the minimum wage. Four senior carers earn £4.50 an hour. The younger staff are paid 20 pence over the Development Rate.
The introduction of the NMW made the owner reassess her staffing. 'I couldn't cut down on the care staff, they need to be looked after. I did try cutting hours with the domestic staff but it's gradually built up again. Because we are EMI there's much more incontinence, we only have one person out of 25 who's not incontinent. And it's an ongoing battle to keep people clean, to keep the house clean'. One solution to spiralling costs was for the owner to take a cut in pay.
This owner likes to employ young people because she says they have plenty of energy. The work is hard and young people seem to cope with it well. This has benefits as they are paid on the lower rate. However they can only be a small proportion of the staff given the client group and most staff are over 30. The young person interviewed was eighteen and was working towards her NVQ. She was happier working than going back to college. She did not want to sit behind a desk any more and had longer-term ambitions to move into social work. She enjoys the work despite its hard physical nature and she especially enjoys working with the residents. She is paid £3.50 an hour and she works five or six days a week in order to earn enough money to make a living. The new Tesco supermarket, which has just opened, pays more per hour but this worker finds care work more interesting than stacking shelves, especially the rewards from the personal relationships established with clients. She also finds that the nature of the work means that she is constantly learning on the job.
The Grange
The home is four miles outside Resort Town in rolling countryside. The present owners took it over a year ago as an existing care home. It now has twenty residents, all of whom are elderly mentally infirm (EMI), which means they suffer from dementia and Alzheimer’s disease. The clients are mainly local people. The age of residents ranges from 68 to 98 years. The home is a rather faded Victorian building and has mainly single rooms which is in line with the demands of the new legislation.
Staff
Four of the staff were inherited from the previous owners and the present owner employed another eighteen staff within three weeks. There is very little other employment in the countryside around Resort Town and the owner was prepared to take on people without experience and train them how she wanted. Most of these staff are still in post and are a mixture of full- and part-timers. The all female staff are of all ages. The owner likes an age mix: ‘The older staff can bring maturity and have got caring skills from just having kids and looking after relatives. And the youngsters have got the enthusiasm and the different ideas so, yes, it does work.’ The staff to client ratio is high. There are two staff members who work as key workers for every three residents.
Key Issues
The owner says that one key issue is the rise in the numbers of elderly people with dementia. She doubts that the number of places nationally can keep up with demand. The changes in legislation have put existing homes under pressure and large numbers of care homes are going out of business. She believes that other homes experience similar pressures to her own. She has taken a pay cut to keep the business viable. Looking back on the accounts, the owner reports that the amount of money that has come in is exactly the same as it was six years ago but out-goings are now much higher. This rise is due to training costs and essential upgrading required by the Care Standards legislation. The home should get extra money for elderly mentally infirm (EMI) residents but this has not yet come through. However extra costs are already being incurred. For example there must now be two night nurses on duty instead of one. The owner expressed anxiety that there will be disputes about which residents are EMI and which are not as the guidelines are unclear. She is doubtful that all the new standards are in the best interests of residents. She argued: ‘I think they're going down the wrong road. I don't know whether elderly people want to be put into some purpose built institution type things where every room is the same size’.
Other issues concern staff and low wages combined with a demand for training. In the past it was an appropriate job for a mother with young children. She points to the new emphasis on training and standards. This means telling them at the interview 'I'm sorry but we're only paying minimum wage but I need you also to commit to either an NVQ or the on-going training programme that we run at the home. This means coming in on days off, doing homework, going on courses that may mean not being in the house’. This combination of raised standards and low pay has recently lost her a good staff member. The owner knows that ‘our strength is our staff’ and feels that she lets them down with low pay and no overtime pay. She herself is on call all the time. Although she employs a manager for parts of the week, she knows that the burden of responsibility cannot shift from her. She is available at the end of the telephone even when off duty. She points out that there are concerns about insurance claims by the families of residents and this has made everyone more anxious and vigilant.
Training.
This is a specialised group of residents and demands on carers are high. The owner pointed out: ’You can't expect people to come in off the street … who are competent in caring for the dementia clients, because they're not out there. And also these clients are so specialised that we need to give that grounding of knowledge specific for those clients’. The owner is fully supportive of training and says she always has ongoing training running on the premises. There is a two hour training session every fortnight which is on-going in basic caring skills. It covers everything and all the staff have to attend it. The owner wants to investigate accreditation for in-house courses. Providing induction training for new staff in their first six weeks of employment is presenting a challenge which she feels is unrealistic. Free training for under 25 year olds is an incentive to employ younger workers but the home cannot be staffed by them as they cannot hold senior positions. Staff on tax credits also qualify for free training. She commented: ‘It does make you aware of ways round things, so the more girls I've got on tax credit that are going through courses, they compensate the ones that aren't’. The owner pays £330 per person for NVQ assessment. The home is working towards achieving the Investors in People award and this is having an impact on the planning and evaluation of training.
The young staff member interviewed was very happy to be taking an NVQ level 3 because she wanted to build up her qualifications and aimed to become a paramedic in the future. She is very committed to her work and comes in on her days off to check on the residents for whom she is key worker. She works up to nine hours a day, depending on the shifts, and works the night shift on Monday. She had completed induction training, general training, fire safety, first aid as well as NVQ level 2. The assessor comes into the home and there is a quiet space set aside for study. This worker really enjoys the NVQ studies. She reports that the owner is ‘always pushing us to do training and courses and stuff. She really likes us to get our qualifications’. However she says that all the staff have to take work home in relation to their training because they cannot complete everything during working hours.
The impact of the NMW
The carers were already paid at the level of the NMW so its introduction did not have a major impact on the home. Some of the younger people on placements in the home are on the Youth Development Rate and are studying for NVQs as well as other college courses. However all permanent staff earn the NMW or above regardless of age. The main concern, according to the owner is that this is a low pay sector but the work is demanding, and involves a high level of responsibility. Many full time carers work forty hours a week just to earn enough money to support their family. The owner reports that it would be difficult to cope with another increase in the NMW.
The Seafront Hotel
This is relatively small but well maintained hotel on the sea front. It was built at the turn of the century as a holiday hotel and used to open in the summer from April through to October. It remains a family-run hotel. The owner's father made a commitment to open fifty-two weeks of the year in the late 1960s, as the oil and gas industries came to prominence. A decision was made to cater for personnel from the oil rigs as well as holiday makers and the business has been developed as a three star commercial/tourist hotel catering for a number of needs. The hotel offers a high standard of accommodation and cuisine and has recently invested in a major refurbishment.
According to the owner it is a complex organisation to run needing a staff with a broad skill base. They cater for weddings and conferences as well as a range of holiday and business clients. The quality of the hotel kitchen is seen as significant to business strategy. Everything is cooked on the premises and caters to the broad client base.
Key issues
According to the owner staff planning is difficult because of short notice on hotel bookings. Finding good staff who are prepared to work flexibly is a major issue. In an area of high unemployment, the benefit system can create disincentives for staff to work flexibly. In this segment of the market the building needs to be maintained to a high standard.
Staff
Staff range from cooks, domestics, reception staff, waiting staff to the management. There are fifteen full-time staff and a similar but fluctuating number of part-timers. Like all hotels it is labour intensive and the owner considers that forty per cent of turnover goes on wages. In this area there is a relatively high turnover of staff, although this has been lower amongst staff in key positions. Turnover is particularly high amongst part-time waiting staff where people want to work for the summer or in the Christmas period. The other area of high turnover of staff is trainee cooks. Two or three are taken on every year in conjunction with the college. The owner commented: 'Even if we sit them down in a chair and say "well you are going to be working until 10 o'clock at night, you are going to be working on a Sunday" and they say "yes, yes, yes, yes, that's fine". It's not until they actually do it that they wake up in the morning and say, "well really this isn't for me"'. Three can be taken on in July two can be gone by September. For this reason more are taken on than are actually needed.
Training
Many of the waiting staff are older people with experience. Younger staff are taken on at seventeen or eighteen and have studied for one or two years at college. 'Then we train them to work in the style that we want them to work in'. The hotel makes a commitment to train young chefs because they are in short supply in the local labour market. Training chefs is key to delivering the company's market strategy. The owner pointed out: 'We make everything ourselves and we think that is one of our competitive advantages and we pay heavily for it'. This was confirmed by the trainee chef, who explained: 'Everything's cooked, all buffet things are cooked, sausage rolls are made here, quiches are made here, we buy hardly anything in and we're very lucky to have a kitchen that's very well equipped and are able to buy the ingredients that we want'.
The young chefs are paid the Development Rate. The owner believes they are a net cost for most of the training period. The trainee chef interviewed is eighteen years old and explained that he enjoyed the work. He came to the hotel on work experience and decided then to work there, initially as a trainee rather than an employee. He has finished NVQ level 2 and is starting NVQ level 3. He has one day a week off to go to college and also gets training at work. He copes with earning the Development Rate and considers his training to be a tremendous bonus. He has to work split shifts and often starts at 6am then has a break mid-afternoon and comes back to work until 10.30 pm. He is not tempted by higher paid shop work and is dedicated to a career as a chef.
The policy is also to employ qualified staff on reception and other areas. The receptionist was taken on part-time while she was training and full-time once she had completed college. The training of the maintenance person was paid by the hotel. He had taken an NVQ at a local college and undertakes odd jobs. The owner explained 'Our training plan is a "well if we need it we'll go and get it"'. At the moment they are investigating training for updating web-sites.
The effect of the NMW
The hotel was paying above the NMW before it was introduced, so the main impact has been on the need to maintain wage differentials above it. The owner pointed out that for the industry as a whole there had been some hefty rises in the wages bill. There is a shortage of good staff, so this hotel has to offer more than the NMW to prospective employees.
The Southern Hotel
This hotel opened in 1945 and has been owned continuously by the same family. They own three hotels in Resort Town and this remains very much a family business. The owner, her husband and her brother run the hotels. This particular hotel is on the seafront with an imposing façade. The owners used to be able to rely on the holiday trade. Even without too much publicity the hotel was full in the holiday season and attracted people from the North of England in particular. This produced a predictable staffing pattern as more staff were needed on a Saturday to book people in. However the holiday trade has changed and hotel owners have been forced to diversify. Now it is run through all seasons with a range of markets. Although private bookings continue to form a substantial part of the market, this has been supplemented by coach tours, which usually involve week-long stays. There are also speciality holidays for whist and bridge enthusiasts. Clubs block book for weekends (for example, vintage car owners). Certain large organisations also block book rooms for conference weekends. The hotel is adapted for wheel chair users. In some rooms the wheel chair can be manoeuvred into the bathroom and this has extended the potential holiday clientele. A budget Sunday luncheon is also advertised which draws in locals and holidaymakers in the season. This diversification involved considerable work and new markets are continually being explored.
Key Issues
The owner reported that 'every year it gets harder' and the businesses are kept afloat by the family working longer hours themselves. One member of the family is on the national tourist board and they are also involved with their local tourist board. The owner stated that the key issues for hotels in this sector are remaining viable throughout the year, including the low season. This has been the focus of the networking activities and diversification. Despite these efforts, hotels remain vulnerable to cancellations, which cannot be predicted. Basic staff costs must be met regardless of the number of guests and fluctuating demand can make the planning of additional staffing complex.
Retaining qualified staff is a major concern. Despite relatively high unemployment in the local labour market the owner finds it is hard to find motivated and qualified staff. Because most staff interact with guests their interpersonal skills must be well developed. The staff at the moment number over forty, including approximately 20 full-timers. This changes throughout the year and additional staff are taken on for the summer holiday season. The owner pointed out that members of her family worked as necessary in various capacities and provided supervision. She employs a number of younger people and some students as domestic staff and waiters. They return to their colleges in October. Some older staff are employed in the hotel, but rarely on short-term seasonal work. She believes that fears of losing unemployment benefit may deter potential older workers. Older workers may want a job for cash but this hotel does not employ people for cash. All employees are on the payroll.
Staff
The chefs are full-time employees and there are two trainee chefs. The owner's husband works in the kitchen as chef director. Very little ready-made food is bought. They produce traditional English food on the premises and this is labour-intensive. The owner employs some sixteen to eighteen year olds as waiters but she finds them unreliable and they do not meet the standards of dress and appearance that she requires. Local young people may be employed under sixteen with a local authority permit, but they cannot work after seven at night and this cuts down the range of work they can undertake. College students are often employed as waiters. The restaurant manager is a long-standing member of staff and is salaried and full-time. Domestic staff are all part-time and mainly seasonal workers. The office staff and receptionists have relevant qualifications, gained mainly at Resort Town College. The day receptionist is in her twenties and earns above the NMW.
Training
A wide range of staff are employed by hotels and, because of the seasonal nature of the business, many staff are temporary. A considerable amount of training is on the job. The owner expressed her commitment to training longer-term staff and discusses their training needs with them as appropriate. She encourages them to gain qualifications if they are good workers who are likely to remain with the company.
Amongst the older staff one waiter/ barman has just completed an NVQ. The owner encouraged this young man to gain a qualification. Although he was too old for a free place on the NVQ course she found some local funding for older students to return to study. Because there is a network of three hotels, qualified staff can be moved between workplaces for promotion. Another young woman in her twenties is taking an NVQ at the moment.
Some young people are taken on as trainees. They are paid on the Development Rate and this helps to offset the cost of the investment in time and effort and the days out of work at college. Two trainee chefs are completing NVQs or apprenticeships at the moment. The owner considers that they are lucky to go through the training despite the long hours and hard work. Their training at the local college is free and the young chefs get considerable help and support in the hotel kitchen to develop their skills.
The owner was not aware of the Adult Development Rate and would not have used it in any case. In this hotel trained staff are paid over the NMW. This gives them an incentive to stay. The local labour market has some unemployment but this does not mean there is a good supply of trained motivated and personable staff.
The impact of the NMW
'Well to start with, to be truthful the family took a cut in wages. I took quite a big cut so we could keep everything going. That is how much it affected us'. As this quote illustrates the NMW had a big effect on this hotel. It came at a period when business was fluctuating so higher staff bills coincided with lower income. The owners were uncertain where to turn for advice on the NMW and no local advice was given so they reacted with pragmatism. They cut down where they could. Fortunately in 2001 the season improved. Foot and mouth disease did not affect this county so Resort Town was a more accessible destination than some other areas. Hotels need investment or they become shabby and this was a concern for the owners. They have been able to maintain investment more recently.
The Department Store
The store was established in 1850 and was originally a small shop. It was developed into a department store and is family-owned although the owners have expanded to four other stores within this region. This is the largest department store in Resort Town and about seventy-five people are employed including office staff, but not all are employed directly. The operation of concessions means that labels such as Windsmoor employ their own staff. This accounts for 25 percent of employees. About 75 percent of directly employed store staff are part-time. These are mainly middle-aged women with one or two younger people and men. There are also about forty people who only come in when they are needed. Vacancies are usually filled from this pool. The store is a member of the Association of Independent Stores (AIS) and this has a number of benefits including the ability to compare information between members relating to customers and sales growth. This has shown that despite being situated in a town in decline, the store has continued to grow.
The ethos of the store is to provide ‘the best customer service on the high street`. Staff must be smartly dressed in suits and to help with this, they can buy their own suits half price from the store. Interpersonal skills are the main requirement for work on the shop floor but good levels of numeracy and literacy are also required.
Key Issues
Over the last ten years Resort Town has been in decline. In the retail sector this has corresponded to the growth of the local county town as a shopping centre. One consequence of this has been that Debenhams, the store's main competitor, left Resort Town. The store has been able to maintain growth as it is now the sole supplier for many branded goods in the locality. However the county town is expanding further and a new 600,000 acre shopping area is about to be built. This may have a further effect on shops in Resort Town. Since the introduction of the NMW maintaining profit margins has also been an issue.
According to the owner there has not been a major problem with quality or quantity of staff. More senior positions can be difficult to fill and recruiting them to this area of the country can be difficult. There is a particular problem with buyers. Chain stores buy from their head offices and all the stores contain the same goods. It is difficult for individuals to acquire skills as a buyer. If staff are trained by the store they can be poached by others. Good buying skills are essential to the profitability of the store.
Training
The owner described the company's approach to training as 'not old fashioned but perhaps just a little paternal'. Training staff is seen as important and contributes to staff retention. Training up to the post of store manager is carried out locally, often in-house. The store has an ethos of providing excellent customer service. This needs continuous training to maintain the standards. An independent assessor comes in to evaluate the quality of customer service against criteria each month and produces a ‘mystery shopper report’. This report shows up gaps in customer service. There is a customer service formula, which must be followed by staff. For example, they must greet the customer, answer the phone correctly and use the customer’s name when giving back their banker's card. Staff are trained in health and safety, lifting and handling: these courses are on-going and are run by an in-house trainer. External trainers are brought in for specialist courses. The AIS provides advice on training and runs specialist courses, such as visual merchandising. Normally, a couple of staff will attend and, if they recommend the course, the store will employ a trainer to run the course for their employees. Training needs are assessed through annual appraisal and from the results of the ‘mystery shopper reports’. The appraisals are collated to indicate the needs for specific courses. Individual requests are also considered as long as they are relevant to the work.
Young people used to be taken on every year and trained to work on the shop floor, but they have now been largely replaced by part-time staff. A few young people are still recruited. One young member of staff interviewed went to the store from leaving school at sixteen. She is now eighteen and now earns over the adult NMW. She has completed the British Shops and Stores Association (BSSA) course. She is one of two young people currently close to completing an NVQ 2 in retail. The staff manager had proposed that they enrol for the NVQ and an external assessor comes to the store to work with them. College courses for key skills are an extra on a Tuesday afternoon. These include maths and English which the interviewee found very useful. She intends to embark on another NVQ after this and sees it as an opportunity to make up for what she missed at school due to lack of interest. This employee was very committed to her work and would not consider retail work in another store. She prefers working for a family business because 'I know who the boss is and I like to look smart for work'.
The Impact of the NMW
Retail is a relatively low paid area everywhere and the owner pays the same rate in all his stores. The most recent rise in the NMW brought it close to what was being paid by the store, so the decision was made to keep a differential above it. The owner explained that it would be difficult to maintain the view that the store was 'the best in the high street' if staff were only paid the NMW. All staff had received a 6 per cent wage increase although sales had not yet increased. Since wages make up sixty per cent of costs, this had made it a difficult year. The owner believed that a further increase in the NMW would have a substantial effect. Here staff are paid full adult wages at nineteen as long as they are working well. The store likes to maintain differentials so that longer serving, older staff feel valued and that they have a career ladder. Therefore the NMW has a knock on effect all the way up the pay scale. The owner was not familiar with the Adult Development Rate and he did not think it would be relevant to this kind of employment.
The Newsagents
This shop is out of the city centre near a residential area. Nowhere is far from the sea in Resort Town and this is on a minor tourist route. Although it is not in the most depressed part of town, the surrounding area shows signs of deprivation and some of the guesthouses are boarded up. Some other properties are in a dilapidated state but they are not the majority. Local residents are varied with a large proportion of younger people and the elderly.
The owner was born in Resort Town and is committed to earning a living there. He has been running this store for two years and lives nearby. It is a newsagents and a convenience store with a range of items on sale and a national lottery concession. It is open from eight in the morning until eight at night. Between twelve and fifteen people work in the shop at various times during the week, but only the owner and the shop deputy manager are full-time. The remainder, work a variety of part-time hours. This includes the young people delivering newspapers.
Key Issues
The owner pointed out that profit margins are small in a shop like this one where the customer is buying a range of small items. They are dependent on large numbers of people coming through the door in order to make a living. They are susceptible to all the influences affecting Resort Town at the moment. If the tourist trade is slack, people in general have less money to spend. When Tesco had a relatively small in- town store, local people would shop at a local shop for many items. Now a larger Tesco is opening the owner fears that he will see a drop in trade. Those people who have cars will increasingly do their shopping in the supermarket but the impact will be limited by the fact that many local residents do not have them.
The NMW has had a big effect. The owner does not pay cash in hand and all his staff are on the wage bill. Therefore wages have increased while income has remained the same. He complained that the unions draw attention to local authority workers, but retail workers are 'at the bottom of the heap in terms of wages'. He said he would like to pay his staff more and appreciates the work they do but he simply can not make enough money to put more into wages. He is concerned that staff may leave to work for higher wages at national chain stores.
Local authority policies have had a major impact on trade. Policies on parking around the city have driven away custom and motorists are directed towards expensive council car parks. The owner believes this is misguided in a town which relies on tourists who mainly arrive in cars and are not among the most affluent section of the population. Similarly, CCTV cameras in the town centre have also affected trade. This may have cut down on shoplifting, violence and attacks in the city centre but these problems have been exported to areas like this and the incidence of shoplifting has risen. Shoplifters are caught on the in-shop camera and by the staff patrol. Offenders are never prosecuted because the owner says it is not worth the trouble. The community charge for small businesses has gone up but the owner feels that resources have been concentrated on the centre and other areas have been allowed to decline.
Staff
The shop has to be staffed for fourteen hours a day including the early morning period when newspapers are sorted. Staff work in shifts. The owner works the early shift and the deputy manager works in the afternoon. Two trusted older members of staff can also remain in charge. There are often two staff working at busier times of the day. Younger people are employed but the youngest staff cannot deal with the cash register.
Training
Most of the training for this work is learned on-the-job. Many employees have other jobs or are working part-time and according to the owner they are not interested in training. However, the owner is keen on training and willing to invest in training where this seems appropriate. His deputy manager is doing an NVQ level 3 in retail management, which he is funding. She has completed NVQ2. There are procedures like lifting which the owner takes seriously.
The impact of the NMW
The NMW has had a major impact on this business. The staff earn the NMW except for the manager, who is salaried. As wages form an increasing part of the expenditure of the business, the manager has tried to cut corners. Where older staff have left he has tried to employ under 21s. This has not been entirely successful as he has found the younger age group to be less reliable and more likely to be tempted by work in the more trendy shops in the town centre. Some younger staff remain but older part-timers are also important.
A young 19 year old part-time staff member is also a student in the county town. She comes home at the weekend and finds it useful to work in the newsagents. She worked there as a younger teenager and feels part of a team. She earns £3.70 per hour, just above the Development Rate and she does not find the work taxing. She has a chance to chat to other friends working there and earns extra money for a living. She would not look for work elsewhere because she likes working in the shop and for the owner, and it is close to home.
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