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Tackling working poverty has tangible business benefits

"Tackling working poverty has tangible business benefits” says Business in the Community
  • Business in the Community and the Social Mobility and Child Poverty Commission have today published findings from a business inquiry into low-income employment, involving 11 companies from low-paid sectors.

  • The report calls for employers to take concerted action to improve low-paid employment.

  • To coincide with Living Wage Week, Business in the Community (BITC) has today published Beyond Pay: An Inquiry into Improving Low-Income Employment which calls for employers to develop a comprehensive strategy to improve low paid employment that goes beyond pay alone, identifying immediate and long-term goals that respond to increases in poverty, low productivity rates and growing skills shortages that the UK sees today.

  • Supported by the Social Mobility and Child Poverty Commission (SMCPC), Beyond Pay presents findings from an inquiry carried out by the UK charity earlier this year, involving 11 companies from low paying sectors, including support services, care, retail and hospitality.

The report acknowledges the importance of increasing pay, but demonstrates that where employers take wider action to improve the quality of work, and quality of life, for their low-income employees they can reap tangible business benefits including increases in productivity and staff retention.

Beyond Pay highlights practical steps that employers are taking, presents a strong business case for action and identifies six key focus areas for employers to address – pay and security; line management; communication; skills and progression; job design; and cost of living support.

The report comes at a time when there is an increased focus on low pay in the UK, following the government’s announcement of the National Living Wage, and recent votes on changes to tax credits. The charity welcomes the pay increase but argues that it will not be enough to significantly improve the lives of people on low pay, particularly as workers are affected by changes to in-work benefits that may see them no better off.

Alan Milburn, Chair of the Social Mobility and Child Poverty Commission said: “Since the recession, there has been a big increase in the number of families who find themselves in poverty despite working hard. Tackling working poverty has to be shared responsibility between employers and government. The introduction of the National Living Wage is a welcome step towards Britain becoming a country where work pays. But by itself it will not guarantee low-paid workers a life free from poverty. That is why this report is so important. It suggests how paying higher wages can be sustainable for employers. That involves a laser-like focus on the practical steps that can improve workers prospects to advance in their careers and so increase their earning power. More employers are adopting these approaches. If others follow their lead we can make poverty pay a thing of the past."

Business in the Community’s Chief Executive, Stephen Howard, said: “The National Living Wage has put discussions on pay firmly on the boardroom agenda for companies with low-paid staff. Pay is very important but it’s not the only solution to a growing social problem. Our Inquiry shows that businesses should take action beyond pay alone to improve low-income employment. Tackling working poverty has tangible business benefits, including increased productivity and improved staff engagement and retention.”

[i] Taking up the floor: exploring the impact of the National Living Wage on employers, Resolution Foundation, 2015


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