· 2 min read · Features

Pay rises in an uncertain climate, part two

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Is it practical for HR to support a shift to a higher minimum wage for employees during a recession?

At a time when many budgets are under intense pressure, some companies have chosen to go above and beyond the National Minimum Wage to support their employees. Plant-based food company THIS also announced that it would be setting a £35,000 minimum salary for all levels of employees this year. But are such moves practical in the current climate?

 

John Hood, senior communications manager, The Living Wage Foundation

It’s great to hear that THIS are uplifting all their roles to £35,000 minimum. This boost will give their staff the additional support they need to better deal with the added difficulties of living in the pandemic.

We encourage all employers that can afford to do so to commit to the Living Wage as a minimum – for those that can afford to go further, like THIS, it’s only a positive move, showing the team that their employer is committed to their wellbeing in this difficult time.

When workers are paid what they need to live, and more, they are more motivated and productive, benefiting the business, too.

For employers that can afford to do so, paying the Living Wage has a positive effect on both the business and employers, and we would encourage these employers to join our network.

 

Gael Norris, head of people and culture at GetBusy

I think it's commendable and admirable for THIS to have taken this decision, but I also have to admit to being curious as to how many junior people they routinely need to hire a year and what is the base hiring criteria.

Putting my questions to one side I have to agree, the typical salary of £18,000 for London that THIS has said it usually pays its entry-level employees, is low. Even though we are not London based, at GetBusy we pay competitively, plus we also hold a keen focus on supporting and investing in our people’s personal and professional development, so we are looking out for our talent now and for the future.

However, I suppose the question is: is it practical to start paying above the job market average? Personally, I don’t think so. We need to consider the unrealistic expectations this will put on other businesses that are not in the same financial position to pay wages higher than the market rate. 

 

More on this topic:

National Living Wage increase not enough for frontline workers

Workers can warm to a pay freeze if handled sensitively

Could flexible pay become a new trend now we're working remotely?

 

Find part one of this hot topic here.

This piece appears in the March/April 2021 print issue. Subscribe today to have all our latest articles delivered right to your desk