Posted on 18th March, 2024

The Largest Increase in the UK Minimum Living Wage: A Game-Changer in Labour Supply Costs

The UK has made a significant stride in improving the living standards of its workforce with the largest increase in the minimum living wage in over a decade. From 1st April 2024 the National Living Wage (NLW) will rise by 9.8% from £10.42 to £11.44, an increase of £1.02. This is the largest ever increase in the minimum wage in cash terms and the first time it has increased by more than £1 and will now apply to all employees over the age of 21.

The increase in NLW will also increase the statutory costs by £0.32. This incorporates annual holiday pay (5.6 weeks entitlement), employers’ NI contributions, pension auto-enrolment cost (3% of qualifying earnings) & apprenticeship levy (for businesses with over £3m paybill). Current GLAA guidance for the minimum labour overhead and service costs for agencies will rise to a recommended £1.29.

To help support these unavoidable increases, Central Employment have reduced our service costs below the recommended cost, to help mitigate the impact to our client’s.

This substantial increase in the UK minimum living wage signifies a paradigm shift in the economic landscape, urging businesses to re-evaluate their labour practices and financial models. While the rise in wages may lead to a temporary spike in operational costs, it also presents an opportunity for companies to enhance employee productivity, satisfaction, and retention. By ensuring that our workforce earns a fair and sustainable wage, we can foster a more motivated and engaged team that is dedicated to driving the success of both our company, and that of our trusted client’s. This move not only aims to uplift the financial well-being of low-income workers but also has far-reaching implications for businesses operating in the UK, including our own.

Considering the minimum wage hike and the goal to beat competitor rates, Central is proactively seeking ways to streamline labour supply costs without compromising on the quality of services. As Central embark on a strategic initiative to reduce labour supply costs and outperform competitor rates, the recent minimum wage hike presents both challenges and opportunities that we must navigate effectively.

Central aims to outperform competitor rates. By leveraging this opportunity to invest in training and upskilling our workforce, we can cultivate a team of skilled professionals who can deliver superior value to our client’s and candidates. Additionally, by offering competitive wages and benefits, we can attract top talent in the industry and position ourselves as an employer of choice, thereby gaining a competitive edge over rivals.

When proposing rates to our client’s, we take guidance from the Government GLAA (Gangmasters and Labour Abuse Authority) charge rates, published between March and April. This is currently set at £1.29 per hour.

This indicative guidance sets out the minimum charge rates to apply between a labour provider and labour user. The rates cover statutory requirements as well as basic overheads. This latest guidance takes account of new national minimum/living wages, national insurance thresholds, increased labour sourcing and retention costs, increased transport costs and PPE. The rates do not include any margin for a labour provider’s profit. The figures have been compiled for the GLAA by the Association of Labour Providers (ALP).

As well as reducing our labour supply costs, Central consistently maintains high standards of compliance, ensuring all candidates have the right to work in the UK, hold a level 2 in both Math and English, 2 recent work reference, relevant experience and supply relevant background checks.  We also ensure pre-employment inductions and appropriate pre-employment training for candidates prior to any job placement.

Our service costs and proposed rates are inclusive of the below costs.


We are heavily invested in all the major Job Boards. This ensures our averts are shown on the first page of job listings and gives us an application rate of approx. 2,000 candidates per week and the top 5% (100) are booked into our office for RTW compliance verification and a face-to-face interview.

Inductions / Sickness and absence

Pre-employment inductions are carried out to ensure our clients always have an available pool of candidates who are job ready. This also allows Central to cover any short-term gaps in labour supply due to sickness and absence, either Central candidates on assignment or short-term cover for your own permanent employees.

Drug & alcohol testing (when applicable)

When applicable drug and alcohol testing is also carried out by Central Employment by our certified trusted partners.

Replacing unsuitable candidates

Central also replace unsuitable candidates free of charge. This may be due to performance, conduct, time and attendance issues and in the event the candidate does not find the assignment suitable and does not wish to return.

The largest increase in the UK minimum living wage represents a pivotal moment in advancing social and economic equality while posing challenges for businesses to adapt and thrive in a changing landscape. By strategically addressing labour supply costs, leveraging the wage hike to enhance employee engagement, and positioning our company as a market leader through competitive rates, we can navigate the complexities of the evolving labour market and emerge stronger and more resilient than ever before. As we embark on this journey, we want to take the opportunity to create a positive impact on our workforce, our company, and the society at large.

Please check all parity pay rates – Any changes will require immediate action.


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