This week we’ve seen the announcement that the national living wage will increase by £1 to £10.90, the increase has been bought forward in response to the huge increases we’ve experienced in the cost of living this year.
What is the National Living Wage?
The living wage is a voluntary rate higher than that of the national minimum wage and is introduced to help support employees earn a good wage to promote a good standard of living and one that will help support in the cost-of-living crisis.
As it is a voluntary rate, not all businesses need to pay this. However, almost 30% of businesses in a recent CIPD survey are already accredited living wage rate providers and another 10% in the process of applying to be accredited employers.
As with many initiatives, there will be businesses who pay much higher than this as the market value of their roles are equal or higher to this rate, or they are choosing to support employees with their financial wellbeing. There are many reasons companies choose to pay the national living wage from cultural values and it feeling right to do so, to improving employee engagement and retaining talented staff.
As an employer, getting the balance right for all can be a real struggle, especially as we head into the winter months with lots of uncertainty around us. If the opportunity to increase the base hourly rate of employees is not an option just now, here are a few things you could consider to try and ease the burden for everyone:
- Review and renew your financial wellbeing policies and offerings.
- Ensure your communication channels are clear and effective.
- Ensure your line managers are updated with any changes in circumstances and that they have all the info they need to support employees who are struggling
- Communicate all overtime clearly, and allocate on a fair basis
- Ensure employees know where to go to get info on their benefits and how they can update their preferences
- Look at what other options you can offer to employees to help with the cost of living crisis – more flexible working arrangements for example so they can reduce commute costs, free food at work, perhaps getting a financial person in who can sit with employees and talk to them on how to manage their money and bills.
Not all businesses can afford to pay more right now as the pressure is on us all but being clear with your situation and what support you can offer will go a long way in building trust and loyalty through difficult times.