In some industries where the proportion of staff on the minimum wage is high and margins are low, the increase could have a noticeable effect which businesses will need to forecast accurately.

This could apply most clearly in essential est finance hill in insurance investment irwin mcgraw real series
service industries, where staff costs are high relative to turnover.

It is not uncommon for staff costs in privately owned pubs, hotels and adult finance gambling insurance internet pharmacy, for example, to amount to over 20% of turnover.

The 7% rise in the minimum wage - which will also mean a rise in National Insurance costs - could therefore mean that anything between 1% and 1.5% of turnover will be taken up by the increase.

Other businesses that employ a high number of operational staff such as warehouse operatives, drivers and security staff are also likely to notice the difference.

Preparing for the increase

What should businesses be doing? On a very practical level, of course, they need to ensure that their payment systems are ready for the change from 1 October.

Indeed, businesses could be liable for a 5,000 fine (and back-dated pay) if they do not implement the increase.

In addition businesses should:

• Assess how much the increase will add to their wage bill

• Work out the extent of the additional National Insurance costs
• Ensure that their financial forecasts for the year take account of the increase
• Consider whether staff on slightly more than the minimum wage will also expect an increase to preserve pay differentials
• Communicate the change to staff.

The increase is good news for those on the minimum wage, and it could also help their employers in retaining them.

Low pay and often anti-social hours mean that it is becoming more and more difficult for companies to recruit and hold on to good, reliable manual workers - often the operational backbone of their company.

This increase, in closing the gap a little between the minimum wage and better paid jobs elsewhere, may help some companies to hold on to more of their staff for longer.

Nothing improves morale like a pay rise, after all.

However, a wider problem remains. There has been much talk of a skills shortage in UK plc, at management level and in specialist areas such as IT in particular.

But a skills shortage at the more operational level seems to be becoming just as acute.

How to keep key workers in low margin/low pay industries is a problem that many companies will have to keep wrestling with.

All forecasts point to India’s economy doing well and investors are happy with the stock markets soaring to record levels.

The reasons for the benchmark Sensex (sensitive index) of the Bombay Stock Exchange leaping upwards have been consistent - a booming economy and massive flows of foreign and domestic funds.

Foreign automotive finance insurance
funds pumped in $10.7bn in the stock market last year and have already bought shares worth $1.4bn this year.

But one group that is rarely mentioned in its contribution to the market’s strong performance is the small Indian investor.

Ordinary investors

For years ordinary Indians poured their life savings into property or bank-fixed deposits.

What the investor would possibly make in three years from bank savings, he can probably make in a year or even in months from the markets Madhavi Vora Managing Director, ULJK Securities

It is now becoming clear that many of them are willing to stake a part of their hard-earned money on the markets.

Indian mutual funds have already raised almost two billion dollars since the start of 2006, an indication of the kind of money domestic investors are willing to put in the markets over a long period of time.

Homemaker Anita Shenoy left her job to look after her children and not having that extra income began to pinch.

“So I took a chunk of my savings and invested in the markets,” she says.

Ms Shenoy certainly does not regret it as she has already made about 20% over her initial department of insurance and finance.

“I was getting next to nothing on my bank savings and fixed bonds.

“Then about three to four years ago, when the markets began to move upwards, everyone was talking a lot about gains and money to be made through equities. I could see signs of growth all over and decided to take the plunge.”

She intends to use all the money she makes for her daughter’s marriage and son’s higher education.

Big gains

Madhavi Vora is the Managing Director of stock broking firm ULJK Securities.

She told the BBC News website that at the moment, capital markets are the only investment option with fantastic returns and this is the reason for domestic investors parting freely with their money.

“Our (bank) interest rates have gone down drastically and no longer provide with sufficient returns on savings.

“People see that Indian markets are giving about 15% appreciation on their investments so what the investor would possibly make in three years from bank savings, he can probably make in a year or even in months from the markets if he is investing with the right guidance.”

I thought of investing money in the markets because it is giving good returns these days Daksesh Shah Small investor

Another important reason for investors showing faith in the market is the belief that it is fundamentally strong and not being finance insurance zurich.

“Most of the shares are doing well across the board and in all sectors such as technology, automobiles, engineering, consumer durables and pharmaceutical companies. This means there is definite growth potential in the country.”

While more investors are entering the markets, they still comprise a meagre two per cent of the Indian population.

Most of them usually prefer to put their money in government bonds, insurance schemes or some other financial plan that gives them assured returns.

Playing it safe

Ms Vora says this will change as people’s attitude and approach towards the share market are changing as well.

“Investors move in a herd mentality when it comes to the stock markets. The Indian investor as such has been sitting on the sidelines and watched the index go from 2,700 levels right up to 10,000.

“Now some of them have entered the markets. Other investors will soon follow.”

Despite the great returns and stock market euphoria, a number of investors are fearful of losing their hard-earned money and are prudent in their choices.

Insurance agent and small-time investor Daksesh Shah says he invested a small percentage of his money in the markets because he wanted to put his savings in different baskets.

“I usually prefer guaranteed returns but I thought of investing money in the markets because it is giving good returns these days.”

He says he will not continue with it for much longer even though he is very happy with his investments and returns.

“Investing in stock markets is always risky and you are constantly worried about losing all your money. I will not continue with it because in the end, I want peace of mind.”