London Living Wage Update
Since 2016 the UK government has recommended a ‘national living wage’ for all staff over the age of 25, with this age dropping to 23 in 2021. This higher minimum wage rate was inspired by the tireless campaigning of the Living Wage Foundation. However, it is not calculated according to what employees and their families really need to live in today’s economic climate. Because of this, the Living Wage Foundation recommends employers use the Real Living Wage rate – the only UK wage rate that is based on the real cost of living and covers all employees over the age of 18. The Real Living Wage has two bands, one for the wider UK and one weighted for Greater London.
As of 2023, 13,000 employers around the country voluntarily pay their staff based on this recommendation, and on 24th October 2023 the updated London Living Wage of £13.15 was announced.
To continue being a Living Wage employer, businesses will have six months to roll out the new rate.
How does the London Living Wage increase benefit employees?
As an employee, the benefits of the London Living Wage increase are clear. Because it’s calculated according to the cost of living and based on a basket of household goods and services, its designed to make sure you earn enough to meet your everyday needs, from your weekly shop to a surprise expense.
If you want to see if you currently earn a real Living Wage, you can use the calculator here.
How does the London Living Wage increase benefit businesses?
Paying a living wage isn’t just a publicity exercise or lip-service to wellbeing. Besides making life easier for your employees, it has plenty of benefits for businesses and organisations as well. A happy, supported workforce can lead to:
- Increased Productivity
When employees earn enough to cover their basic needs, they can focus more on their work without the distraction of financial worries. This financial security brings a sense of stability and confidence, leading to increased engagement and commitment to their tasks. A living wage also indicates that an employer values their staff. Employees who feel valued and respected are more motivated to excel and more productive.
- Reduced Turnover
Employees earning a living wage are less likely to leave their jobs in search of better-paying opportunities. A stable and satisfied workforce contributes to improved company performance and this reduced turnover can save employers significant costs associated with recruiting, hiring, and training new staff.
- Improved Employee Morale
Fair compensation fosters a positive work environment and higher morale among your employees. When employees feel valued and respected, they are more likely to engage positively with their work, colleagues, and customers. Employees who don’t have to worry about making ends meet are more engaged, enthusiastic, and motivated in their roles.
- Better Quality of Applicants
Offering a living wage can make it easier for you to recruit new staff. By providing a fair and liveable income, job postings generate greater interest, drawing a larger number of applicants. They also attract a higher calibre of job applicants. As you become an attractive choice for skilled and experienced candidates seeking not just a job, but a stable and respectful work environment.
- Enhanced Company Reputation
Companies that pay fair wages are often viewed more favourably by the public. This positive reputation can attract customers who want to support ethical businesses and can also enhance relationships with suppliers and partners. Implementing a living wage strategy also significantly strengthens your brand and reputation as an employer. A company known for fair compensation and ethical practices becomes an employer of choice, enhancing its brand equity.
- Increased Consumer Spending
When more people earn a living wage, they have more disposable income. This can boost consumer spending, which in turn can benefit businesses, especially those in local communities where employees live and work.
- Enhanced Innovation and Creativity
Employees who are not constantly stressed about their financial situations are more likely to be innovative and creative. A stable financial foundation can free up mental and emotional resources that employees can then invest in problem-solving and generating new ideas.
- Long-Term Sustainability
Businesses that prioritise fair wages are often better positioned for long-term success. A stable, satisfied workforce contributes to the overall stability of the company and its ability to adapt to changing market conditions.
A fair, decent living wage benefits both employees and the businesses that support them. As of 2023 over 400,000 people have experienced the safety of a wage rate that covers their basic needs. Because Australasian Recruitment Company is a London based recruiter, we see first-hand the impact the London Living Wage has for our candidates and our clients.
Need help understanding how the London Living Wage affects you?
Whether you are new to the London job scene or are an employer who wants to connect with the best talent in the capital, Australasian Recruitment Company can help. We have over 20 years’ experience connecting employers with the seasonal and temporary business support staff they need to meet their goals.
Access everything from career support and advice on working in the UK, to exceptional staff sourcing by contacting one of our consultants today.