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Mike Kelly
Chair of Living Wage Foundation and Head of Living Wage at KPMG LLP
Mike Kelly

The Living Wage is here to stay

Authors: Mike Kelly Chair of the Living Wage Foundation and Head of Living Wage, KPMG LLP

01 August 2014

The Living Wage has been described by many commentators as an idea whose time has come. Yet many of the employers who look at becoming Living Wage Accredited organisations risk missing out on many of the advantages, simply because they think of it as a series of adjustments to pay scales for the lowest paid. The problem with this approach is that if they don’t have a clear idea of what they’re trying to achieve – or an understanding of the tool they are using – the likelihood is that the Living Wage will never realise its full potential.

This is all the more obvious amongst third party contractor staff operating on an employer’s site, especially as they are generally seen by customers as part of the core work force, even if they are wearing a different uniform.

When KPMG first introduced the Living Wage in 2006 we had started conversations with our cleaning staff about their role some 6 months previously. We asked about what they liked and didn’t like about their job. We also looked at how we could change the contract to achieve what we wanted and address their concerns about shift patterns and the like. The final contract terms did that, changing shifts to more social hours, removing under desk bins and introducing centralised recycling systems. All of these changes improved efficiency, staff retention and employee motivation and flexibility.

Learning from those early days when we moved on to the mailroom staff we were able to increase their responsibilities. So, where previously the mailroom staff might only have sorted and delivered the mail before 9am, lunchtime and at the end of the day – which was neither an enjoyable job nor a sensible use of labour – instead we got them to take on a wider role.

This meant that in the middle of the day they could start doing other things like filling up stationery cupboards and setting up materials for conference rooms – so they got a more varied job and were paid better.

This attitude is now reflected in all our third party contracts and where we were a lone voice a few years ago now there are many other businesses adopting the same approach.

It is not just office based services either. A pub chain introduced a Living Wage by changing the business model and putting the majority of bar staff out with the customers waiting on tables and ‘up selling’ their products. This increased sales and mark up and meant the business could afford to pay their people more.

Many of these inspiring examples are found on the Living Wage Foundation’s website and show how different employers in a range of different sectors are realising more of the benefits of adopting the Living Wage.

There is also the question of whether it makes a difference to consumers and research we launched in June showed that they do. It certainly shows that customers will vote with their feet.

With more than 800 accredited Living Wage employers already signed up the message is clear; the Living Wage is here to stay and you can either address it holistically or wait for your stakeholders, whether it is employees, investors unions or others to challenge you on what you are doing.