Here’s a novel idea: Paying people enough to live off comfortably motivates them to not only work harder, but stick around longer.
In a recent letter published by the Financial Times, investors from local authorities, unions and charities, such as the CCLA, the Joseph Rowntree Charitable Trust and the Pensions Trust, said they wish to invest in companies that focus on the longevity and productivity of their business operations. The investors claimed there is “considerable evidence that paying the living wage helps to achieve these objectives.”
More than 80 percent of businesses believe that their decision to pay the living wage had increased the quality of their workforce, while others say that it has reduced the quantity of sickness and absence, the letter cites.
“Despite posting huge profits and paying executives sky-high bonuses, many big businesses in the FTSE 100 still don’t pay their staff enough to live on,” said Catherine Howarth, Chief executive of ShareAction, a charity that campaigns for responsible investment. “A living wage means people can afford food, heating and a safe place to live. With the cost of living rising and many more working families struggling, this is no longer an issue that businesses can ignore.”
Moving beyond behavior change — to culture change
Join us as Michele Baeten, P&G's VP of Global Sustainability, leads a masterclass on leveraging consumer insights to not only inspire behavior change, but to shift culture — at Brands for Good: Change at the Speed of Culture on June 15, 2021.
The letter follows a new project launched by ShareAction to give savers a voice in calling on UK firms to pay the living wage to their employees.
The initiative was launched this week, which is National Living Wage Week, and will give thousands of savers and investors the opportunity to send emails to their pension fund or ISA provider, urging them to support the payment of living wages by FTSE 100 companies in their portfolio holdings.
The living wage is an informal benchmark deemed as the wage by which workers can meet the cost of living, ShareAction says. The organization claims if companies agreed to the proposals by savers, thousands of families in the UK could be lifted out of poverty.
Unity Trust, which this year became the first living wage accredited bank in the UK, announced this week that it would reduce lending fees by 50 percent to businesses that agreed to pay the living wage.
Earlier this year, tax and auditing firm KPMG released a report that claimed one in five workers in the UK were being paid less than the living wage. The firm also released research that said investing in working conditions can improve their profit margins and increase their competitive advantage.