Employers have a huge role to play in delivering better jobs in traditionally low-paid sectors, says Louise Woodruff.
Last week’s Budget highlighted the challenging task of supporting UK’s poorer working households. The rise in the minimum wage via the introduction of the new national living wage is very welcome – new JRF research shows that low-income employees really value the Living Wage.
However, the accompanying changes made in the tax credits system will mean that many low-income households will find themselves worse off. What are the options for employees to make up for a shortfall in their household budgets – work more hours, change jobs, get promoted?
We wanted to know what employees are really thinking. This research comes from polling 5,000 lower paid workers living in low-income households, and in-depth discussion with 100 similar employees working in retail, hospitality or care. We found out about the real challenges faced by low-income workers and what employers can do to make a difference. Some 22% of those polled were already doing two jobs and only 32% said they always met their household bills.
Work more hours?
Working more hours can improve household income levels and can make a bigger difference to addressing in-work poverty than pay rates. Most people were happy with their hours but 18% wanted more, rising to 28% for part-time workers. The reasons for not working more hours included the hours not being available from their employer, no flexibility to choose which extra hours to work, caring responsibilities at home, losing benefits and not feeling comfortable in asking for more hours from their employer. 47% of retail workers said that a lack of available hours prevents them from working more.
Nearly 45% of those polled said there were no promotions available with their current employer and only 25% of respondents would definitely apply for a promotion if one was available. Even when a promotion was a possibility there are real barriers in place preventing employees from applying including: feeling that the extra pay would not make up for the extra responsibility, not wanting to work extra hours or different shifts or simply being happy in their current role. That small increase in pay simply isn’t worth it for many people. Changing shift patterns may disrupt finely-balanced care arrangements at home and the focus group evidence overall showed that greater security outside work was more important to people.
Get a new job?
So why not jump ship and look for another employer? In fact, many workers, particularly younger employees, were thinking of doing just that. However, 52% of those polled had been with their current employer for four years or more, showing that many people don’t make the move, and supporting other evidence of people getting ‘stuck’ in low paid work. Employees often saw their job as transitory rather than a permanent career, even when they had been in the role for a while.
What can employers do?
As over 50% of people in poverty now live in working households, employers have a huge role to play in delivering better designed, better paid, more productive jobs even in sectors that have traditionally been considered ‘low cost’. This includes:
- More flexible work that enables employees to work around caring responsibilities.
- Overcoming barriers to progression by devising promotional opportunities that work for employees.
- Providing good-quality work-related training for the lowest paid.
- Designing benefits packages that are helpful for low-paid employees, including discount schemes, free independent financial and other advice, and loans for travel costs.
- Designing jobs in a way that helps people develop their skills.