Employers have a role to play in solving in-work poverty, as a vital part of wider systemic changes. This research from Strathclyde Business School explores the responses of employers to in-work poverty and recommends ways that businesses might, and might be influenced to, make work a better route out of poverty.
What you need to know
- While a combination of complex factors explains the continuing problem of in-work poverty in the UK labour market, employers’ decisions and practices around pay play a central role. Influencing employers to take action on low pay therefore represents an important part of any strategy to solve in-work poverty.
- Employers often have limited knowledge about their employees’ financial wellbeing and/or experiences of in-work poverty. There is a need to build on existing resources and tools that can help employers gain a better understanding of these issues.
- Employers can adopt a range of practices to support financial wellbeing among their employees. Paying wages above the real Living Wage rate and providing security in working hours are among the most important contributions they can make. Some employers pointed to training and in-work progression strategies as a means of providing a route to better jobs for employees.
- There are substantial challenges limiting progress on low pay and in-work poverty. Business support services and other influencers need to help employers weigh the costs and benefits of taking action on low pay, and especially help business leaders to ‘design in’ decent pay and fair work at the early stages of their business’s development.
- There is a strong business case for individual employers to act on low pay and in-work poverty, including improved recruitment and retention, increased employee performance and reputational gains with customers.