Categories
Happy Team

Employers boost wages as the cost of living increases

When looking to get the very best from your people, ensuring you’re paying them enough, for money to be a ‘non-issue’ is one of the key things an employer can do to ensure high levels of staff performance and to retain good people within the organisation.

The Living Wage

Almost 9,000 employers in the UK have committed to giving a pay boost to over 300,000 employees after higher rates were announced for the Real Living Wage.

The 20-year long movement started by the Living Wage Foundation independently calculates and recommends rates of pay needed to ensure all staff earn a wage that meets the real cost of living and everyday needs. These include food, fuel, energy and rent, all of which have seen a sharp increase in the past year. The Consumer Prices Index (SPI rose by 4.2 % in the year to October, up from 3.1 %in September, its highest since November 2011, Office for National Statistics data showed.

Employers choose to pay the Living Wage voluntarily. The new rates will, on Monday, rise by 40p to £9.90 across the UK, and £11.05 in London, or the equivalent of a 20p increase. The Living Wage Foundation’s director, Katherine Chapman, said the new pay rates, which apply from Monday 22nd November 2021, would “provide hundreds of thousands of workers and their families with greater security and stability”.

In the Budget last month, Chancellor Rishi Sunak announced that the Government National Living Wage will rise by 6.6% from £8.91 to £9.50 an hour in April next year, for those over the age of 23.

Frances O’Grady, general secretary of the TUC, said the Living Wage Foundation figures showed an urgent need for the government to raise the legal minimum wage to £10 an hour immediately, ban zero-hours contracts and give trade unions more access to workplaces to negotiate improved pay deals.

For more information, click for a quick guide to the National Minimum Wage and the National Living Wage.

To become an accredited Living Wage Employer, an employer must pay all of its directly employed staff a Living Wage, and have a plan in place to extend that to regular sub-contracted staff.

Half the FTSE 100 are signed up to the Living Wage Foundation’s policy and a record 3,000 employers have joined the scheme since the pandemic began. The latest employers to adopt the Living Wage include Taylor Wimpey and Persimmon Homes, Getir, Fujitsu and Capita.

Dean Finch, Group Chief Executive of Persimmon Homessaid: “I want all our employees to feel valued and fairly paid for the good work that they do. Paying the real Living Wage is an excellent way of demonstrating this. I am therefore delighted we have become a Living Wage Foundation accredited employer and joined what is an important campaign.”  

Turancan Salur, General Manager at Getir, said: “At Getir we pride ourselves on being a great employer. As well as paying all our colleagues at least the real Living Wage, with the opportunity to earn more through bonuses, we provide pensions, sick pay, paid leave, insurance and all PPE and electric delivery vehicles. It is only right and fair that we do this as our workforce is the most important part of our business and we fully support the Living Wage Foundation for promoting such an important issue.”

Some practical things employers can do

Benchmark salaries in the market to ensure you’re informed on competitor salary rates; that will mean you’re able to make decisions about rewards for your people with all the relevant market information.

Review salaries on an annual basis – many smaller employers don’t look at salaries for years after someone has joined until the employee brings it up; that means your people will be taking home less each time living costs increase. These things have a practical impact on employees’ home lives and will undoubtedly affect their levels of happiness at work if left unresolved, which all impacts performance and retention.

Offer non-financial benefits such as flexible working and development opportunities to keep your people engaged in other ways; this won’t replace a decent salary but are elements of the employment package that are often very much in demand by candidates.

If you’d like to discuss the reward and retention of your people, our expert people consultants can help.

If you liked this, you’ll like:

Why your small business needs HR policies