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The Living Wage: Engagement, Efficiency and Empowerment

I just don’t understand why organisations do not see the Living Wage, and I mean the Living Wage NOT the government’s rebranded minimum wage (National Living Wage), as an opportunity.

This is an opportunity to increase “engagement”, “efficiency” and to “empower” employees. Yet far too many organisations just see it as yet another cost they have to accommodate.

Engagement; there is no doubt that paying the Living Wage will increase employee engagement, it is also undeniable that engaged employees generate better customer service leading to higher sales. Many studies have been performed that demonstrate this, dating back to the 90’s when Sears reviewed the “Service Profit Chain”. The positive impact of the benefits of fair treatment and pride in an ethical place to work means high morale, enhanced quality of work and falling rates of absenteeism. It also means a positive impact on staff retention and an organisation’s reputation as a good place to work, with obvious recruitment benefits. This is backed up by a recent independent study by the Living Wage Foundation. For many organisations these benefits alone have the potential to fund paying the Living Wage.

Efficiency; ok, if one does not buy engagement driving the service profit chain then seeing the Living Wage as a catalyst to improve efficiency can also bring much needed business improvement. AMR studies show it only take 2.3 bad customer experiences for a customer to abandon a brand all together. Yet, as we all often experience, there are not enough staff on return counters to meet customer demand or lengthy queues in the coffee shop with too few baristas. In 2011 The Grocer published a study suggesting the average Briton spends more than month of their life queuing in supermarkets, yet there are often far too few tills staffed. Why not use the Living wage as the business case to introduce technology to align staffing to customer demand, improve customer service and drive greater sales.

Empowerment; in today’s world, our Millennial workforce expect to be what used to be referred to as “empowered”. They expect to be able to influence their work/ life balance with direct access to Cloud based networks, to have a say in where and when they want to work, to swap shifts with like qualified colleagues, to work flexible hours and to have immediate access to manage their work/life on their chosen “Smart Phone”.

Over 2,000 organisations are already paying the Living Wage and enjoying the reputational and business benefits it undoubtedly brings. How many organisations will be paying the Living Wage this time next year? Can you afford not to be one of them?

Read my first blog on Paying the living wage in Retail & Hospitality

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  • 1st February 2016
  • By Simon Macpherson
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Simon Macpherson,
Workforce Management Thought Leader

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