Duncan Brown says HR, and business, have much to gain from the Living Wage
Today about five million people in this country, the majority women, will have woken up, (many before you or I), travelled to work, served us, cleaned for us, looked after our elderly and sick relatives and friends, and performed other valuable activities, and then gone home again. And at the end of the month they will get their pay cheque, like you are I. But they won't have earned enough to live on – not enough to feed and clothe their kids, provide power for their homes, and the other necessities of life. Only in-work benefits to the tune of £4 billion a year keep their heads above water. More than half of the children living in poverty in this country have one or more working parents.
So why is this? Or as Archbishop of York John Sentamu, who will be chairing a new Living Wage Commission, elaborated at the weekend: "Why aren't those who are profiting from their workers paying up? Why is government subsidising businesses which don't pay their employees enough to live on?"
And we might add: “Do the employers of these people not have HR directors?” And: “Are these not fair-minded employers who have ever heard of employee engagement?”
The Living Wage is not a new idea, nor a particularly left-wing political one. Ed Miliband might ask why a banker can earn in a day what a care worker earns in a year. Or why one hour of a FTSE chief executive's pay would be just about enough to pay for one of their minimum wage-earning employees to move up from the National Minimum to the Living Wage level for a year.
Miliband has promised future subsidies to minimum wage-committed employers of which there are about 300 in the UK today, earning wage rises for about 45,000 staff so far.
But Liberal MP for Dewsbury, Mark Oldroyd, wrote a detailed treatise in support of the idea in 1894. Prime Minister David Cameron has described it as "good and attractive idea"; and Mayor of London Boris Johnson is a strong advocate, regarding it as "critical if the capital is to remain diverse, inclusive and prosperous".
So why aren't all businesses and HR directors supporting it and why do we remain in a situation where as the Archbishop pointedly points out, "the Living Wage remains a concept: workers need pay, not platitudes". The most obvious reason is cost.
In a forthcoming paper for the Engaging for Success web site, Linda Holbeche illustrates how shareholder-driven, if engagement-mouthing, employers have actually used the recession to casualise and segment major areas of employment and drive home work and social divisions between an elite of talented professional and managerial workers and the mass of service sector workers. Or as the Archbishop puts it, "in their rush for profit and for high pay at the top, too many companies have forgotten the basic moral imperative that employees be paid enough to live on". "How do we resurrect that imperative?" he asks.
HR professionals should be helping the commission and the government to come up with some answers, as our prosperity and stability as a society depends on it. We know and have the evidence to prove that investing in your people, in providing them with training, pay progression and a career, pays off. At the recent MMU/CIPD Centenary conference, Professors Carol Atkinson and Rosemary Lucas showed me their forthcoming research paper demonstrating unequivocally that better managed and higher wage paying care homes deliver better care quality, despite the general sector decline in pay levels as homes have been privatised.
And we have the progressive HR and employment policies to deliver far greater returns on those investments. As Victorian entrepreneur Robert Owen recognised at his New Lanark cotton mill, "philanthropy" in the form of decent wages and housing, workplace benefits and education facilities "go hand in hand with economic advantage. Or as Edward Cadbury from the firm that CIPD voted as the best employer ever put it, "worker welfare and profitability are different sides of the same coin".
Linda Holbeche is guardedly optimistic, like me, that "a more genuinely mutual employment relationship can emerge from the ashes of economic crisis" and we can "progress towards a more genuinely fair and sustainable, mutually beneficial employment relationship". And HR directors need to be promoting a Living Wage as a crucial element in that employment relationship.