Due to the uncertainty of Brexit, some companies may be tempted to turn to lower wages to reduce costs. In industries where offshoring isn’t an option, such as retail, manufacturing, warehouse and distribution, are feeling the pressure to reduce wages to bring costs down.
The Living Wage (LW) is currently £9.75 an hour for London and £8.45 an hour for the rest of the UK. The LW is reviewed annually, taking in to account such things as accommodation, travel, food and holidays. The LW should not be confused with the National Living Wage, introduced last year by the government to ensure organisations pay workers aged 25 and over at least £7.20 an hour. For many employers, paying the living wage simply seems like the right thing to offer their employees. For others, paying the appropriate living wage to employees gives them a competitive advantage. For employers not already paying the recommended living wage, here’s some of the things they should consider:
- Living wage employers will find it easier to attract talent and compete with other employers that aren’t paying sufficient wages in today’s candidate-led job market.
- Although initially paying the living wage will increase costs, living wage employers will save money in the long run because of reduced recruitment, induction and training costs as they should be able to retain employees for longer and staff turnover will decrease.
- Research has found strong correlation between companies that pay the living wage and employee productivity. If employees are receiving pay suited to their lifestyles it is likely that stress and anxiety levels will be reduced and performance at work will be improved.
- Employees should also be more able to afford things like a gym membership, leisure activities and healthy food, improving their wellbeing and therefore reducing absenteeism. Living wage employers have found absenteeism has fallen by 25% on average.
- If you operate in a customer-facing industry, paying the living wage could lead to improvements in service quality and customer satisfaction as a result of boosted morale and generally happier employees.
