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Shades of pay - the benefits of the living wage for employers

Luke Whitmore - Law on the Web

  1. 03 March 2015
  2. Business
  3. 0 comments
Sepia-toned money

If you run your own business, you may well have heard of the Living Wage Foundation, and their campaign for businesses to increase the amount they pay their staff.

The Living Wage, currently set at £9.15 within London and £7.85 elsewhere, is a sum calculated on the basis of living costs in the UK. Campaigners claim that the positives of paying a Living Wage to staff are enormous, lifting low-paid workers out of poverty. Paying a Living Wage to employees is, however, an entirely voluntary move for employers.

When running your own business, you may feel that money is tight and you have no compelling reason to simply start paying out a higher wage to your staff. What reason do you have to adopt the Living Wage, and will it do your business any good?

Benefits for staff

It should go without saying that most workers would like to be paid more, but prudent employers may feel that any positive effect on their business would be hard to measure, and therefore be reluctant to make such a sweeping change to the amount their employees are paid. However, research has indicated that, for businesses which are willing to pay the Living Wage, there are indeed quantifiable benefits.

According to an independent study, the upside for businesses which adopt the Living Wage is indeed significant. Perhaps most measurably, staff absenteeism was found to fall by an average of 25% for those employers who introduced it, with the increased wage apparently providing an unsurprising boost in morale and loyalty.

Over 80% of employers surveyed also reported that the Living Wage had boosted the quality of their employees’ work, and most found that they had an easier time hiring and keeping employees.

Employees themselves were also clearly pleased, and not just at the opportunities the increased wage afforded them. 75% of those whose employers committed to the Living Wage said that their work had consequently increased in quality. 50% also reported that they were also more receptive to changes in their working practices as a result, bolstered by the increased flexibility of larger cash reserves to eagerly accept changes which would serve the needs of the business.

Reputational advantage

Perhaps less measurable, and yet still an important point for consideration, is the benefit conferred to your brand’s image by becoming a Living Wage employer. Affirming your dedication to treating your staff properly by signing up as a Living Wage business allows you to demonstrate your ethical stance and supplies a significant boost to your reputation, aiding in recruitment of employees and your business dealings with others.

A more tangible benefit in this area is the fact that becoming an accredited Living Wage Employer will see your business’s details placed on the Living Wage Foundation’s website, giving you a boost in visibility and credibility to potential employees and partners. The Living Wage Foundation also offers aid in promoting your new Living Wage status through press coverage.

Adopting the Living Wage

If you’re considering becoming a Living Wage Employer and want to know more about it, the Living Wage Foundation has a range of information for employers available on their website.

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