Managers across the UK\u2019s small and medium-sized enterprises (SMEs) are finding themselves earning only marginally more than junior staff. Some experts claim the government is \u201cmaking leadership pointless\u201d by shrinking wage gaps that once justified added responsibility.<\/p>\n\n\n\n
The upcoming rise in the minimum wage, confirmed by Chancellor Rachel Reeves<\/strong>, is widening tensions within the wage <\/a>structure of small businesses. The rate for workers aged 21 and over will move from \u00a310.42 in April 2023<\/strong> to \u00a312.71<\/strong> by April 2026<\/strong>. According to Kate Underwood<\/strong>, founder of Kate Underwood HR and Training<\/em>, this is contributing to what she describes as \u201cwage compression,\u201d where the gap between team members and their supervisors has narrowed to just a few pence per hour.<\/p>\n\n\n\n \u201cGreat for low-paid workers. But for SMEs it\u2019s causing a proper headache<\/em>,\u201d Underwood said. \u201cSupervisors are ending up on basically the same money as the team, just with extra stress and zero thanks<\/em>.\u201d She warned that the change is making promotions less attractive and harming morale. \u201cIf your supervisor is on \u00a313\/hour, the \u2018reward\u2019 for managing people, fixing problems, handling customers and taking the heat is just an extra few 10ps an hour<\/em>.\u201d<\/p>\n\n\n\n Supervisors expected to handle operational pressures are increasingly disillusioned with their roles, according to Underwood. The narrow financial incentive is leading to difficulties in retaining mid-level staff. \u201cThat\u2019s not a promotion,\u201d she added. \u201cThat\u2019s a punishment with a lanyard.\u201d<\/p>\n\n\n\nShrinking Pay Gaps Put Business Operations Under Strain<\/strong><\/h2>\n\n\n\n