Improve productivity to meet National Living Wage, urges Wrights Plastics

A leading West Midlands manufacturer this week suggested that the introduction of the Living Wage in the UK will mean manufacturing must improve productivity in order to remain competitive. Wrights Plastics have invested close to €500,000 in the latest machinery and plant in order to compete with rivals across the globe. The plastic fabrication business employs around 100 at their West Bromwich base, many of whom will be affected by the changes announced by Chancellor George Osborne last July. The National Living Wage of £7.20 an hour for employees aged 25 and over comes into effect in April 2016, rising to £9 by 2020. Andy Watkins, Commercial Director at Wrights Plastics said this week “We fully welcome the introduction of National Living Wage but there is no escaping the fact that it will have a significant impact on costs, especially for many small and medium sized manufacturers like ourselves. We also compete with companies in the Pacific Rim where labour costs are already significantly lower.” Some businesses may consider reducing their staff levels but Andy says that his organisation has made the decision to invest in the very latest technology as a way to increase productivity and reduce waste. “Again for a business like ours this level of investment has seen us increase costs at the very time that we are having to fund higher wages but without this investment we simply cannot remain competitive in a global market.” There is plenty of room for increased productivity in the UK economy as a whole as we produce on average 30% less per hour than workers in Germany, the US and France. Economists have identified a lack of investment as one of the factors in this ‘productivity gap.’ Investment at the company has focused on the very latest in cutting and printing technology. The company is the first in the UK to operate much of the equipment they have introduced. “This type of cutting-edge technology enables us to produce at a faster rate with less waste and an improved finish quality. These improvements help us increase output, reduce costs and win new quality-driven business. That will allow us to meet the requirements of the new pay legislation – and hopefully continue to take on more staff too!”

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