The Voluntary Living Wage and How It Affects Your Business
BlogHR Advice Posted: Monday 6th November 2017 by
This week sees the rise of the voluntary living wage that will positively affect more than 150,000 UK employees. Employers who are signed up to the voluntary ‘real living wage’ scheme will now pay minimum hourly rates of £8.75 across the majority of the UK – a wage rise of up to 45p per hour – with employer’s in London paying £10.20 per hour.
It is reported that higher inflation costs, rising housing rents and transport costs are included in the calculation.
More than 3,500 employers are signed up to The Living Wage Foundation, including some the UK’s largest employers, such as The Co-op, National Grid, Oxfam, Burberry, Aviva, British Gas, Ikea, Nestle, Google, and KPMG (to name just a few). The Foundation is a not-for-profit organisation that celebrates and recognises responsible leadership from employers who choose to pay the ‘real’ living wage based on the cost of living, not just the government minimum.
It is estimated that 1 in 5 workers in the UK is paid below the voluntary living wage, a figure that rises to 2 in 5 for part-time workers. These figures have sparked a call from KPMG boss, Andy Bagnall, who states that more needs to be done to eradicate in-work poverty.
Many firms, especially start-ups and SMEs may be concerned that paying the higher rate will affect their bottom line, however, there is now plenty of evidence to suggest the contrary. Firms who do pay higher rates have seen substantial increases in staff retention, employee morale and increased productivity, with less staff looking for an alternative job.
The Voluntary Living Wage should not be confused with the National Minimum Wage or the National Living Wage, which are set by the government.
You can become a Living Wage accredited employer by signing up to join the Living Wage Foundation.