The fast-approaching National Living Wage is either a great opportunity for the fitness industry to up-skill or a massive threat to the quality of staff, depending on who you talk to. One thing’s for sure though, it will come into effect this April and the sector will need to find ways to deal with it.

Chancellor George Osborne’s initiative will see the starting hourly rate for over-25s jump to £7.20 (up from the current minimum wage of £6.50), gradually rising to £9 an hour by 2020. It means a pay rise for many of the 6 million (or 23 per cent) of UK workers currently earning below a living wage and forms a central pillar of Osborne’s efforts to reduce Britain’s welfare bill by cutting tax credits.

The impact on the health and fitness industry is expected to be significant, given that a large number of workers enter – and often stay – at the lower end of the pay scale. One school of thought suggests that investing in staff wages will pay significantly higher dividends in the longer term.

According to Emma Kosmin, programme manager for The Living Wage Foundation – which advocates pay rates of £9.40 an hour in London and a rate of £8.25 elsewhere – the benefits for a business to become a Living Wage Employer are “immense”.

She said: “Absenteeism can drop by 25 per cent as staff become less stressed; staff retention also improves, so companies spend less on recruitment and new training.”

But with wage bills set to soar regardless of which rate they pay, operators face tough decisions to ensure they can balance the books? Will membership fees have to rise, or will this simply chase away customers who were hard to win in the first place? Will the fact that many workers are in line for a pay rise mean they’ll be willing to spend more on leisure? This month’s Health Club Management asked a panel of experts for their views on what the National Living Wage means for fitness.

For Tim Baker, chair of leisure consultancy Touchstone Partners, there are a number of ways the operators can offset the cost. Some, he says, may scale back on staff using a model similar to budget gyms, while others may raise prices and urge staff to offer a more personalised service in order to justify the hike.

Baker notes that gyms have an advantage over other sectors likely to be hit by the Living Wage – such as retail and hospitality – as the industry can position itself as a ‘force for good’ by facilitating healthy living. He suggests leveraging this position to create new revenue streams through tie-ups with schools/colleges, care homes and other service providers.

Meanwhile, Tara Dillon, CEO of CIMSPA, believes another of Osborne’s initiatives – the Apprenticeship Levy – could help offset the costs of the National Living Wage. By embracing apprenticeships and the funding available from the Levy to train them, Dillon says operators can improve the quality of their workforce and generate returns.

“Some forward-thinking operators are already reviewing their staff structures, working with CIMSPA to better qualify their workforces to prepare for the introduction of the National Living Wage and apprenticeship levy,” said Dillon. “I would strongly urge other operators to do the same.”

But while the National Living Wage may make hiring young people a more attractive prospect, some feel the move leaves those aged over-25 – often with valuable life experience – less employable. There are also concerns that centres will find staff less willing to work flexible shifts.

Martin Guyton, CEO of leisure trust tmactive believes the wage hike will tempt permanent employees to move to the more flexible hourly wage, making it difficult to staff centres during unsociable times, namely evenings and weekends.

He also echoes the fears privately expressed by several industry observers that operators will simply adopt unofficial ‘hire under-25s’ policies to circumvent the wage hike.

“Sadly, I do think the new wage will mean that older people in our sector will find themselves less employable, simply because it will be cheaper to employ under-25s,” he said.

“While that’s not something we at tmactive will be doing, I can’t speak for others in the sector.”

For Health Club Management editor Kate Cracknell, the inevitably of the National Living Wage means operators have to start looking for the positives of the situation, of which she feels there are many.

“Let’s use the Living Wage to our advantage, asking not if we embrace it, but rather how it can best work for us,” wrote Cracknell in her editor’s letter.

“Yes it’s disruptive, but it presents a perfect moment to up-skill the workforce and improve the sector’s credibility.”

To read the full debate on what the Living Wage means for the fitness industry – from the January 2016 edition of Health Club Management – click here.