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There’s no customer loyalty in low wages

A new survey has revealed that unless businesses pay staff a fair wage, consumers will change their buying habits and take their shopping elsewhere.

The survey of more than 1,000 individuals from across the UK and conducted by Censuswide for KMPG, highlights that most people believe that the country’s continued economic recovery requires an in-depth analysis of the UK’s wage structure and many are of the opinion that the lowest paid workers should be the first to benefit.

In fact 52 per cent of those surveyed have stated that with regards to shopping they would be willing to pay higher prices if the money went directly into staff’s pockets. Whilst four out of 10 respondents claimed if their favourite store does not pay the Living Wage, they would have no hesitation in shopping somewhere else. Only 13 per cent felt that it was up to employers to decide what wage they paid their staff and therefore would not alter their shopping habits as a result.

The survey also suggested there is a strong belief that UK productivity and performance would improve if businesses pay a Living Wage. Sixty-one per cent suggested that if staff in a hotel, pub or restaurant were paid a Living Wage as opposed to the Minimum Wage, service levels would pick up. And, four out of five people believe that excessive working hours have a negative impact on staff morale and productivity, stating that individuals should not have to work more than 60 hours per week in order to earn enough to live.

Two-thirds of the respondents (66 per cent) believe that the UK’s economy has reached a level where wage increases are justifiable for those on low incomes and deem it as unfair that some people are forced to get a second job just to make ends meet.

Mike Kelly, KPMG ‘s head of Living Wage, commented:

“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.”

With employers already dealing with the dilemmas of a skills shortage , the issue over what is considered as fair pay,  leaves businesses with concerns about the number of potential recruits who will not take a job if they feel that the company is unethical. Over half of those surveyed (56 per cent) said they would not accept a job, if the organisation was not paying the Living Wage. However, 58 per cent think employers should be encouraged to pay a Living Wage, but not forced, with only 21 per cent agreeing that pay levels should be set by government.

Kelly concluded:

“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.


About Sarah OBeirne


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