What Is the Living Wage and how can you offer it to your staff

All businesses are required to pay their staff the national minimum wage.

Currently the national minimum wage is as follows:

  • £7.50 per hour – 25 years old and over
  • £7.05 per hour – 21-24 years old
  • £5.60 per hour – 18-20 years old
  • £4.05 per hour – 16-17 years old
  • £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship

The Living Wage is a campaign that promotes employers paying their staff not just the bare minimum that they can live on, but a wage that has been identified by independent experts as an amount sufficient to live comfortably in our society.

At the time of writing, The Living Wage foundation promotes business providing a living wage of £8.45 an hour, and £9.75 in London due to the increased cost of living in the capital.

Unlike the minimum wage the Living Wage is designed to be paid equally to people of all ages. This is important as not only does it ensure young people can earn a decent wage, but it stops young people being the “cheap option” for employers, and puts older people on an even playing field when it comes to applying for jobs.

The difference between the National Minimum Wage and the Living Wage became somewhat confused after this year’s budget as the Government changed the name of the National Minimum wage for over 25s to the National Living Wage. The National Living Wage of £7.50 per hour is much lower than the Living Wage identified by the Living Wage Foundation of £8.45 nationally and £9.75 in London.

For the sake of clarity in the rest of this article any reference to the Living Wage will refer to the rate of £8.45 nationally and £9.75 for London as identified by the Living Wage Foundation and all government defined rates will be referred to as the National Minimum Wage.

Why does the Living Wage matter?

Providing the Living Wage matters because it allows people to afford a good standard of living.

In a 2008, the Joseph Roundtree foundation undertook a study to find out what people identified as being required to have a basic standard of living in the UK. It included things like access to the internet at home, occasional nights out, and a modest self-catering holiday once a year.

The study found that this lifestyle, that was by no means extravagant, required a salary 24% higher than the National Minimum Wage at the time.

While there has been no similar study conducted in the last couple of years, organisations such as the Living Wage Foundation would argue that this disparity between the National Minimum Wage and the cost of living in the UK still exists.

As an employer, by offering the Living Wage you can ensure that your staff can at the very least experience a decent standard of living that is in line with people’s general expectations.

How does the Living Wage benefit your business?

They ways in which employees benefit from the Living Wage are apparent, but how do businesses benefit?

There are already a number of businesses working with the Living Wage Foundation to provide their staff with the Living Wage, and the results from such efforts have been positive:

These statistics suggest that despite the increase in overheads due to increased salaries, offering staff the living wage sufficiently boosts staff satisfaction and productivity to provide good ROI for the business.

How to implement the Living Wage

Ultimately when it comes to providing the Living Wage there has to be a ‘bite the bullet’ moment where you accept increased overheads on the belief that you will see the ROI from improved productivity.

You can of course prepare for this by making cost savings in other areas to find the extra capital to spend on staff salaries. This could be looking at everything from changing your suppliers to looking at your energy usage in the building.

Another option that can help to maximise the efficiency of your staff is outsourcing.

How outsourcing can help

There are some areas where providing the Living Wage in-house do not make economic sense – for example managing an emergency phone line overnight.

If your clients only use this phone line for a couple of hours a week then any salary spend, whether it’s paid in accordance to the Living Wage or just the National Minimum Wage would not provide ROI.

That is where outsourcing can help.

When you outsource your 24/7 phone lines to CALLCARE, you only pay for the calls we answer. This is much more cost effective than employing someone in house, and means you aren’t forced to offer low wages in order to try and reduce the negative ROI you can experience staffing this difficult shift.

To find out more about how CALLCARE can help you manage your 24/7 phone lines get in touch with us today.



Gemma Harding
Gemma Harding

As Head of Client Services Gemma is an expert in the telephone answering services industry.