Paying the living wage makes staff work harder

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Benefits of paying living wage highlighted in new report

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29th May 2015 by Paul Cardwell 0 Comments

Businesses who pay the living wage see staff take less sick days and be more loyal, a new Scottish Government report has claimed.

The Wider Payment of the Living Wage in Scotland report, carried out by Ipsos Mori and Loughborough University, says paying the living wage also creates a ‘feel good factor’ in the workplace leading to an increase in productivity and reduced staff turnover.

Researchers claim that increased productivity is likely to outweigh paying the higher wage, currently set at £7.85 per hour, for many firms.

Peter Kelly director of the Poverty Alliance, which administers the living wage in Scotland said the report comes as no surprise to him

“We have long argued that the living wage is not just good for individuals who receive an increase, but is also good for the companies,” he said.

Organisations we have worked with have told us about the beneficial impact that the living wage can have on levels of staff turnover and recruitment

“Organisations we have worked with through the Scottish Living Wage Accreditation Initiative have told us about the beneficial impact that the living wage can have on levels of staff turnover and recruitment.

“This evidence shows that to be the case. As more evidence of this type is produced we hope that more Scottish employers begin to pay the living wage, and we take real steps towards creating a fairer Scotland.”

The Scottish Government study consisted of 11 in-depth interviews with Scottish Living Wage employers, 29 Scottish Government contractors and eight stakeholder organisations representing key sectors and industries.

Roseanna Cunningham, cabinet secretary for fair work, skills and training welcomed the report and said: “As well as the more obvious benefits to individuals receiving higher pay, I hope the findings on improved rates of absenteeism and better productivity help convince employers, not already on board with the living wage, that it could be a very positive step for their business.

“A number of respondents also mentioned the reputational benefits of being a living wage employer, including reinforcing their positioning as ethical and socially responsible businesses.”

There are 200 living wage accredited organisations in Scotland, many of whom are charities.

Last week a report by KPMG said nine out of 10 Scots have heard of the living wage making it the most living wage-aware region in UK. It also said a higher proportion of Scottish employees are paid the living wage than the UK as a whole.