Skip to main content

Broad support for ‘Living Wage’ amongst UK bosses

ALMOST two thirds of SME owners in the UK are in favour of the living wage, a voluntary concept that asks employers to commit to paying staff a wage that covers the basic cost of living.

The figure is drawn from the Close Brothers Business Barometer, a quarterly poll of SME owners and senior management that aims to gauge sentiment on a number of financial issues.

The survey also revealed that just over half (51%) of those in favour could see the policy being implemented in their business in the near future.

Commenting on the findings, CEO of Close Brothers Asset Finance Mike Randall said: "Rather than a legally enforceable level of pay like the national minimum wage, adopting the living wage is an ethical decision that businesses may take to ensure their staff can achieve a decent standard of living.

"The idea has been in the spotlight recently receiving widespread political support, but to date has seen limited backing from employers, so it’s interesting to learn that such a large proportion are now considering its implementation."

The living wage currently stands at £8.55 an hour in London and £7.45 an hour in the rest of the UK, significantly higher than the national minimum wage of £6.31 an hour for adults.

Mike Randall added: "While the majority were supportive, our survey revealed that 19% of SME bosses are opposed to the living wage, with a third of those respondents stating that they simply couldn't afford it and that raising wages across the board would mean cutting jobs.

"Many firms are operating on very tight margins, so it's understandable that they might not feel able to boost wages. However, the other side of the argument is that making this kind of commitment to staff may lead to better quality work, higher levels of productivity and increased staff retention as employees feel valued and therefore potentially more loyal to their employer."

The Close Brothers Business Barometer also shows that almost half (48%) of firms polled in the UK have given staff a pay rise in the last year, half of which were in line with inflation and a third of which were higher than the rate of inflation.