Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills & Training, explains why she thinks entrepreneurs should support Scotland’s living wage.
This year has seen interest in and coverage of the living wage reach impressive new highs. From barely a handful of accredited employers a little over a year ago, Scotland now has more than 470 organisations that guarantee a living wage for their staff aged over 18.
The new rate of £8.25, announced in November, moves the living wage on considerably from last year’s rate of £7.85. The heightened level of interest is testament to all the organisations across the public, private and third sectors that have recognised the benefits of paying a fair wage to their staff.
This marks excellent progress in our aim to have 500 employers signed up by the end of March and I’d like to thank the Poverty Alliance for leading the campaign to get more employers involved. A mix of small businesses and large corporations across a wide variety of sectors has shown that the benefits of paying the living wage far exceed the challenges in overcoming any barriers to paying it.
But what are the benefits? And how could they possibly mitigate an increase in your payroll costs? Well, you might be surprised. Research published earlier this year showed that living wage employers believed they were able to retain high-calibre staff and attract more qualified applicants to a range of posts. Just as importantly, paying the living wage can see your staff morale improve, absentee rates drop and levels of productivity increase. And that’s before you even get to the reputational benefits of being seen to be a living wage employer. There is satisfaction in knowing that your employees and their families will have a higher standard of living thanks to you taking such an important step.
But don’t just take the idea of a more positive working environment from me. Anna West, human resources and training manager at CMS Window Systems, said: “Since implementing the living wage, we have seen a 40% reduction in days lost due to sickness. In real terms this means we gained 68 more days of production compared to the same period last year.”
Utopia Computers also reported 100% staff retention, and has experienced a 32% increase in sales, which it has attributed to higher levels of staff productivity. More than 81% of Scottish employees now receive the living wage or higher, part of our commitment to tackling low pay. Each new accreditation can bring a salary uplift for lower-paid members of staff, adding to the number of Scottish employees receiving at least £8.25 an hour.
The Scottish Government has set an example in becoming the first UK government to be accredited in June last year and we are also encouraging all organisations bidding for public sector contracts to pay it. And of course, I cannot stress enough that the national living wage the UK Government is introducing in April is in absolutely no way a real living wage. It is simply a higher national minimum wage, dressed up in a different name and, while any increase in the minimum wage is welcome, it blatantly discriminates against the under 25s.
It also attempts to hijack the successful living wage brand. At the very least this will create confusion among employers and the wider public but could ultimately undermine the hard work that has gone into understanding the living wage and the importance of paying it.
But, as we continue to promote the real living wage, we need even more organisations to recognise the benefits to their staff, their reputation and their efficiency and sign up for accreditation and support those on the lowest pay. We need your help, as employers, to tackle low pay in a non-discriminatory fashion and recognise the real difference that paying the living wage can make to working people.
As we approach the end of March – and the target for having 500 accreditations – we want as many employers as possible to become accredited as we seek to raise the bar for as many people in Scotland as possible. Paying the living wage makes good business sense so why not take the step towards being an accredited employer?