What does the Living Wage really mean for employers?

With the Real Living Wage in the UK increasing to £9 per hour – £1.17 higher than the national minimum wage – it’s clear that people are facing more financial pressure than ever before. For companies who’ve adopted the Real Living Wage, the motivational benefits for staff are exponential. Their staff feel valued, happy and remain engaged in the business which creates a much more motivated workforce. It’s a win-win for everyone. But offering more money isn’t always possible for a business, so how else can they keep their workforce happy? We caught up with Nicola Britovsek, Director of HR at Sodexo Engage to get their view on what the best plan of action is.

Why is it so important?

It’s no secret that the cost of living is rising. We’ve all faced the impact of increased rent and mortgages, the weekly shop costing more than it used to, as well as the rise in our commuting costs.

The Real Living Wage reflects these growing pressures and can help to lighten the financial load for employees. After all, staff who feel that they are fairly remunerated are more likely to go above and beyond what’s required of them.

However, it’s also vital that employees feel valued and supported in their jobs on a day-to-day basis, not only through regular feedback, but also with fair and relevant rewards. Incentives like these will encourage employees to pull together during big projects, support each other, and generally make the business a far more positive place to work.

It doesn’t have to be all about the pay packet

With the best will in the world, not every company will be able to offer the Real Living Wage, as rising costs have also had an impact on employers. Finding other ways to reward staff doesn’t always have to cost the earth, though- it’s about recognising which factors put pressure on staff and finding ways to help offset those challenges. For example, commuting fees can be offset with tax-free travel, and initiatives like cycle-to-work schemes can also be a big help.

Taking care of employees’ personal health and wellbeing is just as important. Subsidised gym memberships, pension contributions, shopping vouchers and other ‘softer’ perks can also help recognise the efforts that staff are making, as well as the pressures they’re facing. Rewards and incentives like these offer a great way to make the workforce feel more supported and recognised – and leads to happier employees.

The key is for companies to keep any rewards package aligned to their specific employee’s needs. What works well for one company won’t necessarily be right for another. So, it’s really important that businesses have a clear understanding of what factors impact the daily lives of their own staff and how they can support them in the best way possible.

Financial wellbeing – a key priority

Businesses also need to realise that the financial wellbeing of their team is important and goes a long way to keeping employees focused at work without worrying about how they might cover the bills and save for the future. However, rather than simply increasing staff salaries or offering bonuses, companies can provide access to professional financial advisers who can help staff understand how to get the best out of their earnings. This kind of support can help take a lot of the stress away and allow employees to better focus on their daily work.

The most effective benefits packages combine financial with other rewards which can be offered as an ongoing benefit as well as ad hoc benefits throughout the year which recognise good work and targets being hit. So, while the Real Living Wage is a really great way for employers to show they recognise the pressures on the everyday lives of their employees, in order to really make a difference, businesses need to be mindful that offering financial rewards will only go so far in supporting staff and keeping them motivated.