The real Living Wage is a voluntary UK wage rate whereby employees aged 18 or older are paid a minimum of £12 per hour across the UK and £13.15 per hour in London. Its purpose is to ensure employees are paid a salary that genuinely takes care of the cost of living for them and their families.
It shouldn’t be confused with the Minimum Wage or National Living Wage, lower statutory rates (£10.18 /£10.42 per hour) that cover school leavers up to 23 and then 23 and older.
In this article, the UK’s premier company formation service, Rapid Formations (and proponents of the wage), look at the reasons why your business should pay the real Living Wage. Let’s get started.
- The right thing for a business to do
As the world at large has become more mindful, the responsibilities business owners have towards their employees have expanded. Previously, duties were restricted to basic things such as ensuring health and safety protocols were in place, but thankfully, now owners are essentially more considerate.
Some people will no doubt disagree but paying at least the real Living Wage is, simply put, the right thing to do. The cost of living crisis has put a remarkable strain on the mental and physical wellbeing of the UK’s workforce. As a good employer, you should do what you can to alleviate any stresses that your employees are experiencing, and financial stress is undoubtedly in your control.
Caring isn’t a tap that can be switched on and off. You either do or you don’t. Hopefully, when it comes to your actions as a business owner, you fall in the ‘do care’ camp.
- Provides you with a competitive edge
In the highly competitive world of business, you need to do everything that you can to stand out from your rivals. Consumers will always be on the lookout for what sets you apart from the competition.
It would be naive to suggest that your exact product or service doesn’t make up the foundation of any decision-making. Specifications, price, quality, and reviews will typically help customers choose what they buy. However, when services are very similar and it comes down to fine margins, the small things matter.
This is where people start considering the tone of voice that your brand has adopted, the content that you’ve produced, your social media activity, and the added credentials that you boast, which brings us to the real Living Wage.
If you pay the wage, your business can get officially accredited by the real Living Wage Foundation. Once you’ve successfully applied, your business can pin the ‘We are a Living Wage Employer’ trust badge to your website and other marketing materials, clearly demonstrating to customers that you care about your staff – something that might just give you the edge over a competitor.
- Happier, healthier workforce
By meeting the real Living Wage, you are not only directly alleviating your team of some of the financial pressure that they may be enduring, but you are also providing them with the means to live a healthier, happier lifestyle.
More money means that team members can buy good food, reside in better accommodation, wear higher quality clothes, be able to afford a gym membership, take regular holidays, and more generally, pay for things that help make their lives that much simpler.
This may come across as immaterial, however, it will benefit your business in the long term. A financially stable employee is going to be reliable, friendly, motivated, productive, and more likely to contribute to company culture.
- Increase employee retention
The real Living Wage highlights an amount that is thought to be a fair minimum wage. It sets a benchmark for employers and employees. If you fail to meet this, employees will become aggrieved, questioning why they’re not deemed worthy of this minimum amount.
Paying a fair salary is fundamental to holding on to your top people. Anything less, and the people who you value will become frustrated and seek employment with a business that does choose to pay them what they believe they’re worth.
Furthermore, the real Living Wage is a well-known initiative. If you decide to not pay it, you risk angering team members who do not receive it and their colleagues who may be disappointed on their behalf. This could be disastrous not only for retaining your people but for the company culture.
- Attract new employees
Related to our point above, employees want to feel valued. By choosing to pay the real Living Wage, you are not only more likely to hold on to your current crop of people, but you are also increasing the chances of attracting new employees to your business.
Even if you’re trying to lure an employee to your business whose salary will far exceed the recommended amount, you are still demonstrating to them that you look after your people. You recognize that a figure has been put in place – albeit a voluntary one – and you’ve taken the necessary steps to ensure everyone on your team is paid this amount.
Prospective employees will do all the research that they can into your business before accepting a role with you. If they see that ‘We are a Living Wage Employer’ trust badge, they will get a feel for how seriously you take your role as an employer.
- Attract new partners
It’s not just about attracting new employees to your business. By being an advocate of the real Living Wage, you can also impress other businesses that you’re looking to partner up with.
Businesses need to be extremely careful about who they choose to associate with. A poor choice in partnership can do serious reputational damage to a previously unblemished record, just by association.
As we have stressed in this article, paying the real Living Wage is not compulsory, and there are certainly worse things a company can do than not pay it, however, it’s not a good look if you choose to disregard it. Also, other businesses are likely to think the same thing and rebuff any partnership advances that you make.
So, there you have it
That was 6 reasons why your business should pay the real Living Wage. We hope you have found this post useful. See here for more information about the real Living Wage and the Living Wage Foundation.
