Guy Stallard: What are the challenges and rewards of offering a living wage?

Let’s start with the rewards. At KPMG, we believe paying a living wage makes sense on many levels, both for employer and employee. 

We employ more than 600 staff in our offices across the UK who provide vital support services, such as cleaning, catering, reception and security. As a business, we could simply not function effectively without them. These are absolutely essential employees, who do a good job, work hard for us and deserve to be better rewarded than the minimum wage we are legally required to provide.

There is a compelling business case, as well as a moral one, for paying the living wage. It is not only about doing the ‘right thing’. We have found that paying the higher rate leads to greater motivation, better performance, lower absenteeism and lower staff churn. For example, turnover among our cleaning staff has fallen by around 40% since we began paying the living wage in 2006. This can lead to cost savings.

The rewards are clear for both parties. But what of the challenges? Of course, such change requires some administrative and HR time. There is also the issue of pay differentials between those moving onto the living wage and their supervisors, who already earn more than them. Should those differentials be maintained? If it is not their own staff, employers need to work with their contractors to implement motivational changes that will deliver the productivity gains that will finance the additional wages.

On the whole, however, I think the challenges are minor. Once the decision has been taken, and the organisation is behind it, it is a transition that can be made with relatively little fuss.

Guy Stallard is head of facilities at KPMG