This month the ‘Living Wage’ increased from £8.30 to £8.55 in London and from £7.20 to £7.45 for the rest of the country. That is deemed the hourly wage necessary for a person to live comfortably in the current economy.
It’s an easy win for politicians, they get to say people should be getting paid more without having any obligations to actually enforce the increase on businesses as support for the scheme is voluntary.
Does the Living Wage impact my business?
If small businesses want to they can ignore the Living Wage, the only compulsory figure to abide by is still the National Minimum Wage, although Ed Milliband is calling for new powers to name, and potentially shame, businesses that fail to abide by it.
However, as the Living Wage receives more publicity it presents an opportunity for businesses to improve their public image and a potentially damaging situation for those who continue to pay wages below the recommendations.
The advantages and disadvantages of the Living Wage
Beyond the moral obligation of paying your employees enough to live on there is also the positive public perception to be gained from marketing the fact that your business subscribes to the Living Wage. As a voluntary scheme it shows that you care enough about your employees wellbeing to ensure they are living comfortably.
It is also an advantage when recruiting new staff as businesses who subscribe to the scheme can present themselves as a caring organisation, regardless of the level of position you are advertising for. For lesser paid positions it may even prove the difference between a candidate choosing you or a rival business.