What does the living Wage do for my business?

As the Chief Executive of a charity which supports some of the poorest communities of Norfolk, taking the plunge to become an accredited Living Wage employer was a no-brainer. Future Projects provides education services, advice and guidance, employment support, volunteering, and training and skills to those most in need. The very reason our charity exists is to look after those less well-off than us, so of course we should pay a Living Wage, right? 

But, aside from it being expected of us, why should we - the Voluntary and Community sector - be the ones leading the way when it comes to fair pay?  Our work is heavily affected by austerity and cuts to public funding. Generally, our terms and conditions are considerably worse than our private and public sector counterparts – even though recent studies have shown on average we are better qualified. Many charities struggle to pay the bills, and it is not unheard of for leaders to sacrifice their pay to keep the charity afloat.  Some charities are on a very real knife-edge. 

Everything points towards us using low wages to keep the sharks at bay, yet it might surprise you to know that 11 of the 34 local accredited Living Wage Employers are charities or social enterprises. Yes, one in three!  But you would be wrong if you thought this was simply because it’s in our ethos. For many of us, the decision to pay our staff more is all about business.  

Yes, it means also increasing the pay of non-Living Wage staff to keep differentials intact. Yes, it means committing to long term, ongoing increases in staff costs. Yes, it’s a risk in some cases. But… in return we see a range of benefits: staff are less likely to leave so we benefit from reduced recruitment and training costs, not to mention avoiding harmful disruption to the business.  Our productivity has risen as absenteeism and sickness absence has declined. We have become a more desirable employer, better able to attract talented and qualified personnel who want to work for a company that has a culture of fairness and equality. We’ve experienced a boost in morale, commitment and enthusiasm from staff, not just amongst those on the Living Wage, but at all levels as our teams take pride in our commitment to fair pay.

Adopting the living wage has also given us a competitive advantage when it comes to securing contracts and new work. For example; Norwich City Council requires that any organisation tendering to provide services on its behalf is an accredited Living Wage employer. This effectively reduces the competitive pool; if you don’t accredit, you simply cannot bid. 

Since Future Projects adopted the Living Wage we have grown our annual turnover from £800k to almost £1.9m - at a time when austerity has seen many of our counterparts shrink or disappear entirely. We have grown our workforce from around 25 employees to 55. But the impact of our decision doesn’t stop there; the extra pay we offer our employees is being spent directly in the local economy, and higher wages are boosting inclusive growth and social mobility as we hire and train local people to fuel our growth. 

So, when I see large or established employers taking a risk-averse approach to the Living Wage, as a businessman and a leader in my sector I can see the missed opportunities. I want us all to recognise the benefits of fair pay, and for more employers to get on board and join us in the Voluntary and Community sector in paying a fair day’s pay for a hard day’s work.  

As businesses move towards measuring success not just by profit, but also by their social and environmental impact, the Living Wage provides an opportunity to increase business performance across a number of these indicators and should not be overlooked. 

Living Wage Norwich will be hosting an event during Living Wage Week in November. In partnership with AVIVA plc and Norwich City Council, we will be celebrating the Living Wage, networking, and hearing from employers and employees about the benefits accreditation has provided them. 

Please do join us at the Forum on Wednesday 13th November, 6pm-7.30pm to find out how paying a Living Wage to your lowest paid employees could also benefit you and your business!

 

 

 

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