Consumers will change their buying habits and shop elsewhere if British businesses fail to pay staff a fair wage. According to a survey of more than 1,000 individuals across the UK, most people believe that the country's continued economic recovery demands a close examination of the UK's wage structure and many think that the lowest paid workers should be the first to benefit.
The survey, conducted by Censuswide for KPMG, reveals that 52 percent are willing to pay higher prices if the money goes directly into employees’ pockets. Four out of 10 respondents also claim they will not hesitate to shop elsewhere if their preferred store doesn’t pay the Living Wage. Just 13 percent suggest they won’t alter shopping habits, arguing that employers can pay what they want.
There is also a strong belief that UK productivity and performance will improve, if employers pay a Living Wage. For example, asked about the service level they expect to see, 61 percent suggest that if staff in a pub, restaurant or hotel were paid a Living, rather than Minimum, Wage there would be a visible improvement in customer care. Four out of five also argue that individuals shouldn’t have to work more than 60 hours per week to earn enough to live on, believing that excessive hours adversely affect morale and output.
Mike Kelly, KPMG‘s Head of Living Wage, says: “For the past six years employers have been able to hide behind the notion that a downtrodden economy has enforced a freeze on wages. However, with the IMF revising its forecasts upwards, there can be no more excuses to ignore the principle of fair pay. A year ago there were just over 200 accredited Living Wage Employers and with that number now rising to more than 750, it is clear many organisations realise the benefits of offering a salary on which direct, or third-party, employees can live.
According to the research, two-thirds of respondents (66 percent) believe the UK’s economy has recovered sufficiently to justify wage increases for the lowest paid and slightly more (70 percent) want them to be the first to receive pay rises. There is clearly some sympathy for low wage income earners, with the majority of respondents thinking it unfair that some people are ‘forced to get a second job just to get by’.
Mike Kelly adds: “There is still a long way to go, and it may not be possible or practical for everyone, but organisations need to do what they can to address the problem of low pay. Failure to act may prove more costly than adding higher wages to the balance sheet, as shoppers stay away and talented staff move to more socially conscious employers.”
Against a backdrop of the growing skills crisis, a worrying trend for employers is the proportion of potential recruits who will turn their back on a job offer if they believe the organisation is unethical. More than half (56 percent) won’t accept a new role with an organisation not yet paying the Living Wage. Just 8 percent claim they ‘don’t care what other people earn’.
Yet the research shows that, as much as respondents want to see Living Wage policies introduced, most shy away from compulsory change. According to the data 58 percent think employers should be encouraged, but not forced, to pay a Living Wage. Only 21 percent strongly agree that Government should set pay levels.
Mike Kelly concludes: “The decision to pay a Living Wage should be voluntary, but the case in favour is very compelling. It makes good business sense to listen to the views of clients, customers, suppliers and colleagues and the message is clear – a Living Wage is not just regarded as fair pay; it is also seen as fair play.”
The research was conducted during May 2014 and has been published ahead of the release of the Living Wage Commission’s final report on low pay and the Living Wage, on 24 June 2014.
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Mike Petrook, KPMG Press Office
T: 020 7311 5271
M: 07917 384 576
Notes to Editors:
The research was conducted during the first two weeks of May 2014 and incorporates the views of 1,035 adults across the UK.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.