Beyond pay: building on the success of the Living Wage

Let’s build on the success of the Living Wage by looking beyond pay at what else employers can contribute to addressing in-work poverty, says Louise Woodruff.

This Living Wage week, there is a lot for campaigners to celebrate. Over 2,000 employers have now signed up to pay the Living Wage. It is also particularly encouraging that a number of big retailers, such as Lidl and IKEA, have now committed to paying a Living Wage. The Government’s new statutory National Living Wage for employees over 25 is, of course, a very welcome move, which will impact directly on the wages of an estimated 1.9 million workers. This attention on pay rates and low-paid work provides a great opportunity for employers to develop their role in addressing in-work poverty. The question now is what else matters beyond pay?

JRF research published this summer asks what people who are low paid and living in low-income households feel about their work and how it could be made better. The research tested out employees’ responses to a whole package of measures, including the Living Wage, which employers can provide to support their workforce. Whilst pay rates were high up on the list of things that employees valued, we found that other things really matter to people too. Things like work-related training, contributions to pensions, flexible working, sick pay and paid breaks are all important and valued by employees. In particular, the research highlights the problem of a lack of in-work progression, both in terms of opportunities to progress and barriers to progression when promotions were available. Twenty-eight per cent of part-time workers wanted more hours and over a fifth of those polled were working more than one job.

To coincide with Living Wage Week, Business in the Community (BITC) has published the report of its inquiry into improving low-income employment. Crucially, it makes the business case for action – increasing employee retention, progression, discretionary effort and strengthening employer brand. This innovative research has been developed with businesses in traditionally low-paid sectors: support services, care, retail and hospitality. BITC encourages employers to look beyond pay to set a broad strategy for improving low-paid work. It draws on case studies of employers developing good practice in six key areas: pay and security, skills and progression, cost of living support, job design, line management and communication.

We know that employees really value a whole benefit package that goes beyond their basic salary. There has been no better time for businesses to develop strategies to address poverty amongst their employees – the argument is building that it simply makes good commercial sense. We’d love to hear what initiatives you are trialling to support low-paid employees.