By Sam Hepher, Living Wage Foundation
There are now over 4,400 accredited Living Wage Employers in the UK, including over 150 in financial services. These organisations are leading the way in responsible pay by ensuring all staff and onsite contractors receive the real Living Wage of £8.75 per hour in the UK and £10.20 per hour in London.
The Living Wage campaign is an independent movement of businesses, organisations and people who believe a hard day's work deserves a fair day's pay. Employers choose to pay the real Living Wage on a voluntary basis as it provides an ethical benchmark for responsible pay.
The campaign for a Living Wage was launched by members of London Citizens in 2001. Parents in East London found that despite working two or more minimum wage jobs they were struggling to make ends meet and were left with no time for community and family life. The campaign has become an excellent example of how civil society, businesses and organisations can work together to tackle in-work poverty. It also enjoys cross-party support, with public backing from successive London Mayors, the current Mayors of Greater Manchester and the Liverpool City Region, and MPs from across the four nations of the UK.
Over 5.5 million employees in the UK earn below the real Living Wage. That’s nearly a quarter of the country’s workforce and includes nearly a third of women working in the UK. As a result, two thirds of children in poverty have a parent in work.
Only the real Living Wage is independently calculated every year based on what employees and their families need to get by. It’s based on a social consensus of what people need for a decent standard of living and to participate fully in society. This includes everything from housing, transport, and heating, to a small birthday celebration or a trip to the cinema.
The independent Living Wage rates are calculated annually by the Resolution Foundation, and overseen by the Living Wage Commission to ensure they are fully representative of life in the UK today and based on the best available evidence about living standards. The Commission is comprised of experts from business, academia, civil society and trade unions.
Living Wage Employers include household names like Aviva, IKEA and Nestlé, more than a third of FTSE 100 companies, and a range of financial services firms, including banks like Barclays, Lloyds and Monzo, and building societies like Nationwide, Newcastle, Buckinghamshire and Ecology. These companies are joined by thousands of small employers, meaning that, in total, over 150,000 employees have had a pay rise as a direct result of Living Wage accreditation. This has seen over half a billion pounds of additional pay put back into the pockets of low paid families.
There are also proven significant business benefits for accredited Living Wage Employers. A report published in April 2017 by Cardiff Business School found that:
- 93% of employers had benefited from accreditation
- 86% had an enhanced reputation as an employer
- 75% had seen increased employee motivation and retention rates
From a client and recruitment perspective, 87% of consumers believe companies should pay the real Living Wage, while 93% of university students want to work for Living Wage Employers. With thousands of graduating students looking to start a career in financial services this year, companies will want to consider how being an accredited employer may help them attract the best new recruits.
“While all the Society’s direct salaries exceed the Living Wage, accreditation demonstrates our commitment to maintain this, as well as ensuring that all contractors working on our premises are also paid the Living Wage.
“Fair pay helps us reap business benefits such as lower staff turnover and improved customer satisfaction.”
Paul Ellis, Chief Executive, Ecology Building Society
The real Living Wage differs from the government’s ‘National Living Wage’, introduced in 2016 as a higher minimum wage rate for over-25s. That rate is based on a target to reach 60% of median earnings by 2020, whereas the real Living Wage is based on the current cost of living.
The real Living Wage includes a separate rate for London to reflect the higher costs of living in the capital. It also applies to all workers over the age of 18, in recognition that young people face the same living costs as everyone else.
To find out more about the real Living Wage, and how to become an accredited Living Wage Employer, visit www.livingwage.org.uk, or contact Sam Hepher, Programme Manager at the Living Wage Foundation, at email@example.com.
Tickets are also still available for a free information event hosted by the Living Wage Foundation and Barclays in London on Wednesday 12th September - Business Breakfast: The Living Wage in Finance, Law & Professional Services.