43% of employers say the living wage improves morale and productivity

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Just under half (43%) of employer respondents have found that paying the voluntary living wage improves employee morale and productivity, according to research by Middlesex University London and the University of Liverpool.

The Putting the living wage to work study, which surveyed 250 small to medium-sized enterprises (SMEs), also found that 72% of respondents saw a positive effect on the organisation’s brand reputation after introducing the living wage, which currently stands at £9.40 an hour in London and £8.25 an hour for the rest of the UK.

The research also found:

  • 60% of respondents saw a positive effect on manager and employee relations.
  • 77% of respondents pay the voluntary living wage because it aligns with their organisation’s values.
  • 40% of respondents have found that paying the living wage to staff does not add more than 10% to their wage bill, although 15% of respondents disagree.

Dr Andrea Werner, co-author of the research at Middlesex University, said: “Our research shows that small businesses can afford to pay the living wage. It can be done and the benefits make economic sense.

“Respondents who took part in our study told us how much they benefitted from paying the living wage in terms of brand reputation, employee retention and increased staff productivity and motivation. It’s a definite win for these businesses.”