Should All Businesses Become Living Wage Employers?

A report carried out for the NI Assembly last year (2023) found that over 15% of jobs in Northern Ireland paid below the Living wage. But these employers may be missing a trick as there seem to be many reasons why paying your employees at least the Living Wage can be very good for business.

Besides keeping your employees happy by paying them a competitive wage, it can ensure they stay loyal to you and it can increase their productivity levels. It can also help you attract excellent new workers to your business when you need more staff.

There is a really good article on this subject by Paddy Robb, the Environmental, Social and Governance Lead for Invest NI, on the Invest NI website. Here are some paragraphs from the article as to why he believes businesses should pay at least the Living Wage to their employees:

Enhancing employee well-being and productivity

‘Paying a Living Wage (a rate calculated independently by the Living Wage Foundation to meet the cost of living) directly impacts an employee’s financial security and overall wellbeing. According to research from the Living Wage Foundation, businesses that pay the Living Wage see a marked improvement in employee morale, motivation, and overall job satisfaction.

‘86% of Living Wage employers report that paying the Living Wage has improved the quality of work from their staff, and 75% noted an increase in employee motivation and retention. Living Wage Foundation.

‘This leads to higher productivity levels, which directly contribute to improved business performance. As the Foundation’s research shows, the result is not just a happier workforce, but also a more efficient and profitable business.’

Attracting and retaining talent

‘In a tight labour market, offering a Living Wage can be a key differentiator. Talented individuals are drawn to companies that value their employees and demonstrate this through fair pay. Employees who feel valued are more likely to stay with the company, reducing turnover rates. 

‘By paying a Living Wage, businesses can foster greater loyalty, reducing the churn and associated costs of constantly replacing staff. 86% of Living Wage employers in the UK say that accreditation has boosted their reputation as an employer.’

Boosting brand reputation and customer loyalty

‘Today’s consumers are more socially conscious than ever before. They increasingly prefer to support businesses that align with their values. Becoming a Living Wage employer sends a powerful message to customers that your company is committed to ethical practices.

‘This commitment can enhance your brand’s reputation, leading to increased customer loyalty. In Northern Ireland, where word-of-mouth and community ties are strong, this can have a significant positive impact on your business.’

Strengthening community relations

‘Northern Ireland has a deep sense of community, and businesses are often seen as pillars within their localities. By paying a Living Wage, businesses contribute to the economic health of their communities. Employees with higher incomes are more likely to spend money locally, supporting other businesses and services. This creates a virtuous cycle of economic benefit that strengthens the entire community.’

Long-term financial gain

‘While some businesses may be concerned about the immediate cost implications of paying a Living Wage, the long-term financial benefits often outweigh these concerns. Companies that pay fair wages experience lower absenteeism, reduced turnover, and higher productivity—all of which contribute to improved financial performance. 

‘For Northern Ireland’s businesses, where economic growth and sustainability are key concerns, becoming a Living Wage employer can also attract investment. Investors increasingly seek companies with strong ethical credentials and being accredited by the Living Wage Foundation can enhance your appeal to socially responsible investors.’

Conclusion

‘Paying a Living Wage is a powerful way to align your business with the interests of your employees, customers, and the broader society. 

‘For local businesses looking to thrive in a competitive environment, accreditation as a Living Wage employer offers a clear path to success. It’s an investment in people that pays dividends in productivity, loyalty, and brand strength – key ingredients for sustained business growth. Accreditation as a Living Wage employer also aligns with the Economy Minister’s economic priorities to support good jobs and raise productivity within the Northern Ireland economy.’

All interesting points I am sure you will agree.