The real Living Wage reviewed
The real Living Wage is an hourly rate set independently and updated annually; and calculated according to the basic cost of living in the UK.
The research was released in the week that the government’s new minimum wage rates come into effect, to help businesses understand the differences between the various rates. Or, in short, the goverment’s National Living Wage is not the samw as the real Living Wage.
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.
Nearly one in four workers in the UK earns less than the real Living Wage.
Five broad job categories account for 50 per cent 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 per cent of this group reporting increased motivation of their employees and 62 per cent reporting improved retention of staff.
The survey of more than 800 accredited real Living Wage businesses, ranging from SME’s to FTSE 100 companies, found that 93 per cent reported they had gained as a business after becoming a real Living Wage employer.
The research found that 86 per cent 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; and 76 per cent of large organisations (those employing over 500 people) that responded, reported improved retention of employees receiving the Living Wage; 78 per cent of large employers also reported that following accreditation staff motivation was increased.
Living Wage accreditation has: enhanced the organisation’s reputation as an employer: 86 per cent; differentiated the organisation from others in the same industry: 64 per cent; improved relations between staff and managers: 58 per cent; increased commitment and motivation of Living Wage employees: 57 per cent; and improved recruitment of employees into jobs covered by the Living Wage: 53 per cent.
Living Wage accreditation has not: increased the organisation’s bill for subcontracted services: 68 per cent; made it more difficult to win contracts from clients as costs are higher: 87 per cent; or led to difficulty in recruiting to team leader or supervisory positions: 81 per cent.
Katherine Chapman, director of the 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 per cent 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 per cent said that implementation of the real Living Wage had improved relations between staff members and managers.
“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.”