Good to Great: The ‘Real’ Living Wage

The East Midlands HR Network recently held and event on the topic of ‘good work’ in Nottingham and the ‘real’ living wage. A panel of speakers shared some interesting stats and information on Nottingham’s economic landscape and the large impact employment and employers in particular, have on the city’s society, reputation and future.

To kick things off, Dr. Paula Black of Nottingham Civic Exchange shared some unsettling facts and figures on Nottingham’s current socioeconomic climate.

Nottingham’s socioeconomic climate – Key facts

• On average, Nottingham has more ‘ordinary working families’ than anywhere else in the UK.
• Since the recession, there has been an increase in self-employment and low paid jobs. The rate of unemployment in Nottingham isn’t particularly high, however the quality of jobs is low.
• 2/3 of children living in poverty live in homes where someone in the household works.
• Nottingham has the lowest amount of disposable household income in the country.

Paula also noted that the city’s reported levels of happiness and wellbeing are decreasing whereas anxiety is on the rise. These can’t be directly attributed to the highlighted economic issues however, is the link really a coincidence?

Now, you may be feeling uncomfortable after reading these facts just as many people in our audience were. As HR professionals in positions of creating or at least influencing organisational change in Nottingham, the Living Wage Foundation proposes a solution.

National living wage vs ‘Real’ living wage

Dan Howard of the Living Wage Foundation went on to explain how the issues being faced in Nottingham can be tackled by more of the city’s employers paying their employees the ‘real’ living wage rather than minimum wage or the national living wage.

The Living Wage Foundation criticises the government’s national living wage rate for not being based on the actual cost of living. They suggest that a person living off the national living wage would still be £1,540 short per annum of the  amount they would need to live off. This equates to 5 extra weeks of work.

The ‘Real’ living wage – Who benefits?

Employees 

The obvious answer to this would be the employee receiving greater pay. However, it’s important to consider who exactly these employees are.

The Foundation requires all accredited organisations to pay their direct employees the higher amount as well as any third-party contracted workers. These include cleaning and catering staff for example.

It’s usually these third-party staff members who face the issues mentioned at the beginning of this post – remember the point about a rise in low paid and lower quality jobs? Similarly, it’s these members who benefit the most too.

Despite being in employment, many of these individuals struggle to get by financially. For many, this is without the added pressure of supporting a family or any of life’s unpredictable burdens. For these individuals, the ‘real’ living wage is the difference between existing and being able to have a life – a real-life quote from a person being paid the real living wage.

Employers and their organisations 

There are currently a range of SMEs and national household names accredited by the Living Wage Foundation. This is particularly important when considering Nottingham’s commercial market of a mixture of the two – if there’s going to be a change, it needs to be a combined effort from both types of employers.

Amongst these accredited organisations, there’s consensus in the way in which the affiliation improves their business. Benefits include:

• Greater employee retention – Employees feel more valued and respected which in turn positively affects their satisfaction and desire to continue working in the organisation.
• Improved employer brand – The accreditation is a great way to boost your reputation as an employer to both potential employees and potential business partners.
• Ethicality – Similar to the employer brand, being accredited represents your stance on social impact, which could have positive impacts on recruitment and customer/client wins.
• Less absence – Organisations have found their employee absence has fallen due to greater levels of satisfaction and enjoyment, which the feelings of being valued and respected have created.
• Better quality of work – Employees are willing to give and do more for their employers when they feel respected and valued. As an employer, you may also expect more or give more responsibility to employees if they receive higher pay.

Easier said than done?

It may seem as though what’s been mentioned may only work in a perfect, ‘utopian-like’ world. Professionals in the room voiced concerns of the scheme from a commercial perspective. These included:

• Difficulty to assess employees’ current rate of pay as measures and practices vary between industries. If this is the case, switching to the ‘real’ living wage may prove to be a challenge and require more admin work/changing practices etc.
• Organisations are already tied into contracts with third-party contractors who don’t/won’t pay the ‘real’ living wage. Although, the accreditation does allow a 3 year grace period for businesses to switch to real living wage-paying contractors.
• Unrest in the work force as it may become more difficult to ‘reward’ long-serving, more experienced employees who currently receive higher pay than new starters.

A small part of a bigger picture?

The session also heard a lot of discussion on whether requesting employers to increase pay is the single most effective way to solve the unarguable issues the city is facing. Many questioned the role of leaders in higher political positions and the sustainability of the scheme. It’s undeniable that the cost of living will continue to rise so how will the ‘real’ living wage keep up?

It appears as though these should all be looked at as one, from a wider perspective to make an impact.

However, maybe one of the most significant things to come out of the session was the importance of having the conversation – especially amongst ourselves as individuals in positions of empowering people and change in business. So, let’s keep the conversation going; what are your thoughts?

Want to find out more?

If you’re interested in finding out more on Good Work Nottingham or the Real Living Wage, here’s who you need to contact:

Pete Rogers, Community Organiser – Nottingham Citizens | Citizens UK

Email: pete.rogers@nottinghamcitizens.org, or call 073760 09949

Daniel Howard, Programme Officer – Living Wage Foundation

Email: daniel.howard@livingwage.org.uk, or call 020 8017 8188