Why Tech Needs More Living Wage Employers

Sam Hepher, March 20, 2019 3 min read

This is a guest post from Sam Hepher, Programme Manager at the Living Wage Foundation.

There are now nearly 5,000 accredited Living Wage Employers in the UK, but only 185 in tech. These organisations are leading the way in responsible pay by ensuring all direct and regular third-party staff receive the real Living Wage of £9.00 per hour in the UK and £10.55 per hour in London.

The History

The Living Wage campaign is an independent movement of businesses, organisations and people who believe a hard day’s work deserves a fair day’s pay. Employers choose to pay the real Living Wage on a voluntary basis as it provides an ethical benchmark for responsible pay.

The campaign for a Living Wage was launched by members of London Citizens in 2001. Parents in East London found that despite working two or more minimum wage jobs they were struggling to make ends meet and were left with no time for community and family life. The campaign has become an excellent example of how civil society, businesses and organisations can work together to tackle in-work poverty. It also enjoys cross-party support, with public backing from successive London and regional mayors, and MPs from across the UK.

The Problem

Over 5.75 million employees in the UK earn less than the Living Wage. That’s nearly a quarter of the country’s workforce and includes nearly a third of women working in the UK. As a result, two thirds of children in poverty have a parent in work.

The Calculation

The Living Wage is independently calculated every year based on what employees and their families need to get by. It’s based on a social consensus of what people need for a decent standard of living and to participate fully in society. This includes everything from housing, transport, and heating, to a small birthday celebration or a trip to the cinema.  

The Impact

Living Wage Employers include household names like Aviva, IKEA and Nestlé, more than a third of FTSE 100 companies, and a range of tech firms, from multinationals like Google UK, Sage UK, and Ricoh UK, to startups and scaleups, like Monzo, SpareRoom and Habito. These companies are joined by thousands of other employers, meaning that, in total, over 180,000 employees have had a pay rise as a direct result of Living Wage accreditation. This has seen over £800m of additional pay put back into the pockets of low-paid families.

Tara Mansfield, Head of People at Monzo said:We fundamentally believe that in order to invest in your team and show that you actually care, organisations need to pay the Living Wage. Employees perform better and are more engaged when you do. We went Living Wage a few years ago and haven’t looked back. I’d recommend everyone do it – it’s straightforward and supports our wider social mission perfectly.

There are also significant proven business benefits for accredited Living Wage Employers. A report published in April 2017 by Cardiff Business School found that:

  • 93% of employers had benefited from accreditation
  • 86% had an enhanced reputation as an employer
  • 75% had seen increased employee motivation and retention rates

From a client and recruitment perspective, 87% of consumers believe companies should pay the Living Wage, while 93% of university students want to work for Living Wage Employers. With thousands of graduating students looking to start a career in tech this year, companies will want to consider how being an accredited employer may help them attract the best new recruits.

Gary Cheetham, Founder of SystemPioneer Ltd said:As a tech start-up, we’ve decided to become an accredited Living Wage Employer because it’s a powerful way to showcase our company culture and values to the world. Since accreditation, we’ve noticed a large increase in the number of job applications we’ve been receiving. Ethically speaking, companies have a strong obligation to treat all their employees fairly and this accreditation marks us out as a great place to work in the increasingly competitive job market.”

To find out more about the real Living Wage, and how to become an accredited Living Wage Employer, visit www.livingwage.org.uk, or contact Sam Hepher, Programme Manager at the Living Wage Foundation, at sam.hepher@livingwage.org.uk.