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Paying a fair salary is good news for workers and employers

 16 Nov 2021

Millions of UK workers are set to get an inflation-busting pay boost from next April after the chancellor announced a rise in the National Living Wage to £9.50 from the current rate of £8.91. The 6.6% increase will amount to an extra estimated £1,000 or more a year before tax for the average worker aged 23 or over. 

While the move is an important step to help low-paid workers, there are widespread concerns it's not enough to offset the rising cost of living and cuts to benefits. The Living Wage Foundation says there will still be a "substantial gap" between the government-mandated minimum wage and its own calculations of a real living wage based on the cost of living costs. The campaigning group is calling on employers to pay more than the government minimum.

Paying a fair salary for a hard day's work is not only the right thing to do it makes smart business sense that has just as many benefits for the employer as the employee.

Benefits Of A Real Living Wage

Better employee retention and reduced turnover: 

Retention is one of the biggest challenges many companies face. Someone who isn't paid well will always have their eye on the next job. Every time you lose a staff member, it costs you money to recruit, train and prepare a new employee for their role. When staff receive a fair salary, they are more motivated to work and stay with the same employer.

According to a Living Wage Foundation study, 75% of businesses report paying the living wage has increased motivation and retention rates for employees, and 58% say it has improved relations between managers and their staff.

Reduces employee stress: 

If you can pay an individual enough, so their essentials are covered, they worry less about their finances and which expenses to pay each month to make ends meet. They can live comfortably knowing their basic needs are being met.

Improves morale and motivation:  

Happy employees are better-motivated employees who turn up to work on time. Their work-life balance improves as they won't have to hold down multiple jobs to support themselves.

Improves productivity: 

Employees take greater pride in their work and are more focused on the job at hand. There are plenty of studies showing that when workers are happier, productivity increases. Paying fair salaries may well increase the overall wage bill, but this is more than offset by increased productivity.

Increases customer loyalty: 

As consumers, we are becoming more aware of how our purchases affect society in general. Therefore, customers are more likely to return to a business that pays its employees a decent wage than one that doesn't. Many companies are deeply rooted in their local communities and want people to say good things about them. How you treat employees will impact how people think about you.

Decreases absenteeism: 

When workers earn more, they feel more positive about their workplace and take less time off due to sickness.

 Final Thoughts

Paying anything less than a fair salary is in nobody's interest. With more money in their pockets, people can enjoy a good standard of living, and local economies will thrive. And when wages more accurately reflect the cost of living, we create a more compassionate and just society.

 

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