A real Living Wage to attract and retain a motivated workforce

Living Wage Foundation

This blog post has been produced for the Greater Birmingham Chambers of Commerce as part of the 2019 Growth Through People campaign.

Growth Through People is the Chamber’s annual campaign aiming to help local firms boost productivity and grow through improved leadership and people management skills. In 2019 this involves 15 free events, workshops and training sessions taking place between 25th February and 26th March, along with thought leadership videos and blog content such as this.

Thanks to our Sponsors – the University of Birmingham, Aston University, Curium Solutions and CIPD - all events are free to attend. Interested readers can find out more here.

With Brexit fast approaching, and the nature of the workforce ever-changing, I speak to many business leaders who are worried about attracting and retaining staff, especially those in the service industries and manufacturing where there are fears of staff shortages.

We know that recruitment and retraining can be expensive, with estimates on cost ranging from a few hundred to thousands of pounds per person. How then, can you ensure that you recruit and retain a motivated and reliable workforce?

The real Living Wage is an independently calculated, voluntary rate of pay, based on the actual cost of living. This is different from the government’s ‘National Living Wage’ which is the legal minimum wage for over 25s. Here in Birmingham, the real Living Wage is £9 an hour.

Sadly, in the West Midlands nearly 1 in 4 jobs pay less than the real Living Wage.  When I speak to workers here they talk about having to skip meals to pay for school shoes or having to work 2 or 3 minimum wage jobs just to make ends meet. With over half a million workers in this position in the West Midlands, they are on the lookout for something different: an employer who values their contribution to the business, and who they can rely on for their financial security.  

The Living Wage Foundation accredits companies who choose to pay the real Living Wage to all their staff by awarding them with the Living Wage Employer mark – the sign of responsible employment. There are now nearly 5000 businesses who are voluntarily going further than the government’s minimum and are proud to promote their commitment through accreditation, these include IKEA, Nationwide, LUSH, Brewdog, Burberry and Unilever.

Here in Birmingham organisations like National Express, Paragon Banking Group, the Greater Birmingham Chamber of Commerce, Birmingham City Council, West Midlands Police and M Lambe Construction all pay a real Living Wage. However, there are only 58 organisations accredited, meaning that businesses who believe a hard day’s work deserves a fair day’s pay stand out. 

A worker from National Express told us that “It’s refreshing to have an employer who gives me the feeling they want to invest in me, my health, my wellbeing and my future – and not just get labour for the cheapest outlay in the short term. This makes me feel valued and in turn I take more pride in being a part of the team at National Express”

93% of businesses who are accredited Living Wage Employers say they have experienced direct business benefits as a result, including increased staff motivation and easier recruitment. For example, when Brewdog started paying the Living Wage in their bars across the country they saw a 40% reduction in their turnover, leading to a recruitment saving that is estimated at 75%. You can see many more benefits of paying the Living Wage and case studies from those in the network here.

Jonathon Gordan from Clan Gordan letting agents shared his experience of accreditation: “Potential applicants can see straight away that we are a company who values employee welfare. Even new employees who do not benefit directly, because their salary already exceeds the living wage, are reassured by our Living Wage Employer badge that they will be paid fairly, no matter what end of the pay scale they join us at.”

Further, whilst many graduates will not remain in low paid roles for long, polling conducted by the Living Wage Foundation with the NUS showed that this generation of graduates are not just interested in their own salaries but want to work for an organisation who pays everyone fairly. We found that over 90% of graduates would be encouraged to work for a Living Wage Employer.

If you would like to showcase your responsible employment practice and attract the right talent in 2019 by paying a real Living Wage or would just like to find out more, please get in contact.

Lucy Bannister
Programme manager for the West Midlands
Living Wage Foundation