Remsol recently became an accredited Living Wage Employer. That means their lowest paid members of staff will now earn at least £8.45 an hour – the rate that the Living Wage Foundation says is the amount people really need in order to live. Managing director, Lee Petts, offers some advice on the benefits of becoming a living wage employer.
Becoming a living wage employer is admittedly going to have an impact on our cash flow and profitability, but we see it as an investment and have no doubt that it will pay for itself.
Before I explain how and why, let me just share some pretty shocking statistics with you:
- Lancashire has a large number of small areas in the 10% most deprived localities in England. The most deprived areas are in urban centres and towns in East Lancashire, like Burnley, Pendle and Hyndburn, along with Preston and Blackpool.
- 12.2% of Lancashire households live in fuel poverty, meaning that they will at times be forced to choose between heating and eating.
- Nine out of Lancashire’s 14 local authority areas had greater personal insolvency rates (per 10,000 adult population) than England and Wales (19.7) in 2016. The highest of these were in Blackpool (34.6), Preston (27.7), Rossendale (25.9) and Blackburn with Darwen (25.2).
- The median gross weekly earnings for residents (all employees) across the 14 local authority areas in Lancashire was 10.3% below the UK average. Blackpool residents fare the worst.
The picture this creates is one of a low-wage economy where a lot of people are struggling to make ends meet.
Which is odd, because when you look at Lancashire’s economic performance relative to its nearest regional neighbours, it’s doing OK: in 2015, Gross Value Added (GVA) totalled £29.01 billion, which was the third largest in the region, behind Greater Manchester (£59.60 billion) and Merseyside (£29.45 billion).
It suggests that maybe we’re not paying our people well enough.
In our view, if a job needs doing, then whoever is doing it deserves to be valued for it and fairly compensated, whether it’s the cleaner or the CEO. And that’s why we’ve upped our game.
Getting your ROI
Near the start, I said that this move will impact on our cash flow and profitability, and it undoubtedly will in the short-term.
But we firmly believe that we’ll get our investment back in spades, and here’s why:
- When people feel valued, they put more effort in – and when that happens, productivity goes up and so do profits.
- Not only that, but it’s a significant differentiator. We’re one of only 3,456 businesses out of around 5.5 million in the UK that have pledged to pay the Living Wage Foundation’s real living wage, and it sets us apart. I know that it has already influenced a major global company to work with us – proof that it can help drive sales.
- Then there’s the recruitment angle. People increasingly want to work for companies with high environmental, social and ethical standards – we believe that being an accredited Living Wage Employer will act as a beacon and help us attract the best talent in future.
Why not enjoy a slice of feel-good pie?
There’s absolutely no doubt about it, going above and beyond feels good.
As someone who runs an SME, I’m pretty proud to be associated with companies like Unilever, KPMG and other accredited Living Wage Employers.
But I’m happier knowing what this means for the people it affects – and will affect in the future as we grow.
Take someone that works a 20 hour week on the National Living Wage of £7.50 an hour. Their gross pay would be £7,800 a year. On the real living wage, the same person would earn £8,788 instead – a rise of £988 a year, equivalent to over 80% of the average annual UK domestic dual-fuel bill for electricity and gas, meaning that, straight away, the beneficiary can afford to have the heating on more in winter.
That’s comfortable for them, and comforting for us as employers.
Paying the real living wage, and becoming an accredited Living Wage Employer, is a great way to boost morale, attract customers and talent by boosting your CSR credentials, and make you feel good too.