Wage rise: What this means for business owners
- Business News
- Managing a Business
Australia’s minimum wage will rise by 5.2% to $21.38 an hour come July 1st, giving a pay rise to 2.7 million workers under minimum employment standards.
The Fair Work Commission disclosed a new minimum wage of $812.60 per week, up $40 a week from existing levels.
The minimum wage currently sits at $20.33 per hour, or $772.60 based on a 38-hour work week.
For those on modern awards, the minimum wage will rise 4.6%, with a minimum weekly increase of $40 a week.
The decision will affect approximately 2.7 million Australians who currently receive minimum wage or industry awards.
Absorbing the increase: How businesses can plan for the wage rise
To absorb additional labour costs, business owners should aim to develop strategies to minimise short-term impacts and plan for long-term growth.
Manage work hours
Keep wages under control through efficient planning and careful management.
Businesses can reduce costs by carefully rostering and scheduling to avoid overtime payments or by employing staff on a casual or part-time basis.
Limit penalty rates
Most award agreements provide staff with added penalties should they work over the weekend, work extended hours, work overnight, or do not receive the appropriate rest breaks between shifts.
To reduce penalty rates, careful management of work schedules is needed across the times that attract all extra loadings.
Plan for the long-term
A key focus of any business plan is providing opportunities for growth outcomes for the future – and this should reflect through the current operations of the business.
If the bottom line does not allow for wage, staff or operational increases, owners should go beyond the daily figures and solve the underlying issues that are potentially holding their business back.
Find out more about business planning HERE.
Create a “Culture of innovation”
Through the tough times and the lucrative times, businesses should constantly review their operational processes and evolve.
Create a new product, offer a new service, change the marketing direction, target a new audience, or expand the sales pipeline (E Commerce) – businesses who best seize the opportunities created in the tough times often come out strongest in the end.
Remember, businesses that find ways to increase productivity and profitability will be able to offer wage increases to staff naturally.
Efficiency in processes
Save time and money by moving your business away from manual accounts and processes to an automated system.
For successful business management, the ability to access financial data and a real-time view of key numbers is essential from an operations standpoint. It can revolutionise the financial efficiency of your company.
Automated accounting solutions allow for accurate bottom line figures, live operational costs and cashflow management – giving owners a “big picture” overview of real time figures, profitability and areas where the business could save.
Find out more about Cloud Solutions for your business HERE.
Interested in chatting about planning and finance options for your business? Talk with the team at Elevate Accounting on 08 9460 1040 or book your obligation free discussion HERE.