The Real Living Wage: Good for business and good for society

The Real Living Wage: Good for business and good for society

93% of employer’s report benefits from being an accredited Living Wage business

The Living Wage Foundation, working with Cardiff Business School, has released new data demonstrating the business benefits of implementing the real Living Wage.

The survey of more than 800 accredited real Living Wage businesses, ranging from SME’s to FTSE 100 companies, found that 93% reported they had gained as a business after becoming a real Living Wage employer.

The research found that 86% of respondents reported that Living Wage accreditation had enhanced their organisation’s general reputation as an employer. Over half of employers reported that the Living Wage had improved both recruitment and retention; whilst 76% of large organisations (those employing over 500 people) that responded, reported improved retention of employees receiving the Living Wage. 78%, of large employers also reported that following accreditation staff motivation was increased.

 

Katherine Chapman, Director, Living Wage Foundation said:

“Our 3,000-strong network of accredited Living Wage employers are going above and beyond the statutory minimum wage rates; ensuring the lowest paid members of staff earn a wage that’s enough to live on. This research demonstrates that paying the real Living Wage is not only the right thing to do, but it also makes good business sense.Tellingly 81% of businesses reported that there was no negative impact in recruiting supervisory positions, which helps bust the myth that raising the wages of the lowest paid could have a detrimental impact on other staff; moreover 58% said that implementation of the real Living Wage had improved relations between staff members and managers.”
The real Living Wage is an hourly rate set independently and updated annually; calculated according to the basic cost of living in the UK. The UK Living Wage for outside of London is currently £8.45 per hour and the London Living Wage is currently £9.75 per hour; significantly higher than the statutory minimum wages.
Katherine Chapman, continues: “This research demonstrates to businesses who are able, that going above and beyond statutory minimums brings tangible benefits to an organisation. Just a year ago there was concern that the higher minimum wage rates for over 25s would see a slowdown in businesses accrediting as Living Wage employers. The reality has been sustained growth; doubling the number of accredited businesses from July 2015, with more responsible organisations sharing our vision that a hard day’s work deserves a fair day’s pay.”
The research has been released in the week that the new minimum wage rates come into effect, to help businesses understand the differences between the various rates.
Oliver Tress, Founder and Managing Director of Oliver Bonas, accredited Living Wage employer, said:
“Accrediting as a Living Wage employer made perfect sense to us. Our team are at the heart of what makes Oliver Bonas the company it is today. We believe it is right to pay a higher wage; to reflect the true cost of living and to reward all our team properly for their invaluable contribution to the business. Since becoming a Living Wage employer, we have also attracted some great high quality new team members and we expect this to continue as Oliver Bonas grows.”
Nearly one in four workers in the UK earns less than the real Living Wage. Five broad job categories account for 50% of roles earning less than the Living Wage, led by sales assistants and retail cashiers (880,000 employees). The benefits reported by accredited retailers demonstrate the positive impact paying at least the real Living Wage is having on their business, with 75% of this group reporting increased motivation of their employees and 62% reporting improved retention of staff.
Dr Adam Marshall, Director General, British Chambers of Commerce said: “We are proud to be an accredited Living Wage employer. Our research has shown that more than 61% of Chamber of Commerce members also pay the Living Wage, and we applaud all those businesses that pay, or aspire to pay, their staff above the Living Wage. Where businesses can pay above and beyond, this survey shows that it is good not just for the business, but for the staff and their families as well.”