The Real Living Wage - Good for Business - Good for Society

The Living Wage Foundation,  working with Cardiff Business School, has today released new data demonstrating the business benefits of implementing the real Living Wage. 

The survey of more than 800 accredited real Living Wage businesses, ranging from SME's to FTSE 100 companies, found that 93% reported they had gained as a business after becoming a real Living Wage employer.

The research found that 86% of respondents reported that Living Wage accreditation had enhanced their organisation's general reputation as an employer. Over half of employers reported that the Living Wage had improved both recruitment and retention; whilst 76% of large organisations (those employing over 500 people) that responded, reported improved retention of employees receiving the Living Wage. 78% of large employers also reported that following accreditation staff motivation was increased.

Living Wage accreditation has:

  • enhanced the organisation's reputation as an employer 86%
  • differentiated the organisation from others in the same industry 64%
  • improved relations between staff and managers 58%
  • increased commitment and motivation of Living Wage employees 57%
  • improved recruitment of employees into jobs covered by the Living Wage 53%

Living Wage accreditation has not:

  • increased the organisation's bill for subcontracted services 68%
  • made it more difficult to win contracts from clients as costs are higher 87%
  • led to difficulty in recruiting to team leader or supervisory positions 81%

Download the full report

Katherine Chapman, Director, Living Wage Foundation said: 

"Our 3,000-strong network of accredited Living Wage employers are going above and beyond the statutory minimum wage rates; ensuring the lowest paid members of staff earn a wage that's enough to live on. This research demonstrates that paying the real Living Wage is not only the right thing to do, but it also makes good business sense.

"Tellingly 81% of businesses reported that there was no negative impact in recruiting supervisory positions, which helps bust the myth that raising the wages of the lowest paid could have a detrimental impact on other staff; moreover 58% said that implementation of the real Living Wage had improved relations between staff members and managers."

The real Living Wage is an hourly rate set independently and updated annually; calculated according to the basic cost of living in the UK. The UK Living Wage for outside of London is currently £8.45 per hour and the London Living Wage is currently £9.75 per hour; significantly higher than the statutory minimum wages.

This research demonstrates to businesses who are able, that going above and beyond statutory minimums brings tangible benefits to an organisation. Just a year ago there was concern that the higher minimum wage rates for over 25s would see a slowdown in businesses accrediting as Living Wage employers. The reality has been sustained growth; doubling the number of accredited businesses from July 2015, with more responsible organisations sharing our vision that a hard day's work deserves a fair day's pay. The research has been released in the week that the new minimum wage rates come into effect, to help businesses understand the differences between the various rates.

Dr Adam Marshall, Director General, British Chambers of Commerce said: 

"We are proud to be an accredited Living Wage employer. Our research has shown that more than 61% of Chamber of Commerce members also pay the Living Wage, and we applaud all those businesses that pay, or aspire to pay, their staff above the Living Wage.

"Where businesses can pay above and beyond, this survey shows that it is good not just for the business, but for the staff and their families as well."