Shift to real living wage would improve employee loyalty

Workers’ personal lives have suffered due to pandemic-related pay cuts and a commitment to a real living wage could help retain staff and productivity levels in the still-turbulent months ahead.

A poll by the Living Wage Foundation found that 44% of employees working full time but earning less than the real living wage felt the pay they received for their work has negatively affected their overall quality of life.

Twenty-seven per cent of respondents had to skip meals in the past year due to a lack of money, and 20% had to cut heating because of it.

The real living wage is currently £9.50 across the UK and £10.85 in London, yet 5.5 million employee jobs in the UK, one-fifth of all jobs, are still paid below this amount as of April 2020.

Speaking to HR magazine, Laura Gardiner, director Living Wage Foundation, said if low-paid workers were to be paid the real living wage, they would feel their hard work was being recognised.

She said: “This is backed up by the fact that 75% of accredited Living Wage Employers have found that their staff retention rate has improved since their accreditation.

“Given many low-paid workers have proven to also be essential workers in this pandemic, not only is it the morally right thing to do, but giving that extra bit to ensure that workers earn what they need to live will help businesses grow and thrive, even in the face of these difficult times.”

In addition to an increased likelihood of staying with their employer for longer (70%), 68% of those surveyed said being paid living wage would make them speak more positively about their workplace.

The same percentage said it would improve their overall happiness, and 31% said a living wage would mean that they worked harder, more efficiently and productively.

Further reading

In-work poverty: All work and no pay

Low pay rises forecast for 2021

Pay freezes could put HR in a difficult position

Being put on furlough without a top up in pay (24%) and a reduction in hours or shifts by their employer (22%), were tipped as the leading reasons for low pay during the pandemic.

Partly due to these reasons, the majority of respondents (66%) said they thought there will be a stronger case for employers to pay at least the real living wage post pandemic.

Already some employers have begun to lead this change. From April this year, Morrisons will become the first UK supermarket chain to pay its staff a minimum wage of £10 per hour, up from £9.20.

Consumer goods company Unilever has also made a pledge refusing to do business with any firm that does not pay at least a living wage or income to its employees by 2030.

Many expect other companies to follow suit.

The Living Wage Foundation Life on Low Pay in the Pandemic report surveyed 2,128 employees in the UK who were working full time but earning less than the real living wage in December 2020.

The survey was conducted between 3 and 14 December 2020.