Why All Manufacturing Companies Should Pay the Living Wage
As you probably know, the real Living Wage is a minimum rate that's independently calculated, based on the realistic costs of living. It allows companies to give back to their staff, improving both morale and employee retention. This is particularly important in the manufacturing sector, where the rate of job losses is growing in response to the struggles the industry is facing.
Benefits of Paying the Living Wage
In November 2020, it was announced that the new real Living Wage rate for 2020/21 was rising to £9.50 in the UK and £10.85 in London. This will help to offset the increase in living costs by putting over 250,000 workers in receipt of a pay rise. Not only this, the Living Wage will also provide financial relief amid the COVD-19 pandemic.
Over 7,000 UK businesses now pay the Living Wage to staff, but what are the exact benefits?
- COVID-19 Relief: Paying the Living Wage will help employees survive the economic insecurity of the current pandemic. In fact, since the start of the UK lockdown, low-paid workers in key industries have received nearly £200 million in extra wages.
- Boosting Morale and Productivity: When employees are able to live comfortably, they're more motivated to work. This has a positive knock-on effect on productivity, supported by a survey that found happy employees to be 13% more productive.
- Increased Employee Retention: Happier employees are also more likely to stay with a company - around 75% of businesses paying the Living Wage see an increase in employee retention rates.
- Competitive Edge: Being a Real Living Wage employer sets businesses apart from competitors because it shows a commitment to being an ethical company. This not only improves a business' reputation, it also attracts more workers to the company.
Why the Living Wage is So Important to Manufacturing Companies
For manufacturing companies, paying the real Living Wage is a way of combating the decline in exports and unprecedented job losses that the manufacturing industry is facing.
Statistics from November 2019 showed that the manufacturing sector is contracting, with a score of 48.9. Now more than ever, manufacturing companies need to invest in their staff and improve employee retention rates so that they can continue attracting workers to the UK's biggest exporting industry.
And, of course, there are real people behind these statistics. Manufacturing workers who can see the outlook in their industry and have cause for real concern.
Frontline Manufacturing Employees & the Living Wage
Earning the Living Wage positively impacts frontline manufacturing employees because it provides stability in an unstable sector. With 45% of UK manufacturers considering redundancies in response to the pandemic, manufacturing employees need to feel secure in their positions so that they can do their best work and live their best lives.
Providing staff with a wage they can do more than survive on will facilitate employee loyalty, allowing manufacturing companies to weather the storm more effectively. This is one of the most important reasons why all manufacturing companies should pay the Living Wage.
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