Companies should invest in training for low-wage workers, says IPPR
Companies that employ low-wage workers should invest in productivity-enhancing technologies and corporate training, according to the Institute for Public Policy Research (IPPR).
With the national living wage rising, the IPPR said that businesses are now cutting overtime, bonuses, and staff perks.
The think tank carried out a study that showed the impact of the national living wage on low-wage sectors in the UK.
According to the IPPR, the national living wage has resulted in increased salaries for low-wage sectors, leading to companies being unable to fund investments in technology and productivity.
It found that workers employed in sectors such as retail, administration, accommodation and food are 29 per cent less productive than the economy as a whole on average.
The study also found that those who work in a low-wage sector are less likely to receive training.
The IPPR has offered a number of recommendations to help boost productivity, including urging businesses that employ low-wage workers to invest in technology and to offer training to their staff.
The institute has also called on Innovate UK to help fund innovations in the workplace and launch growth hubs, providing advice to businesses in low-wage sectors.
The company also called for businesses to introduce degree apprenticeships in the biggest low-wage sectors to help employees boost their skills.