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Charities can lead from the front on Living Wage

24-Feb-2017

I was delighted to welcome OSCR as an accredited Living Wage employer. With a leading agency in Scotland’s Third Sector leading form the front on Living Wage, this marked fresh opportunity to consider the role of Scotland’s charities in the Living Wage employer movement, and why more charities should consider following the lead of OSCR to accredit.

With over 700 accredited Living Wage employers in Scotland, and 3000 across the UK, it is clear the Living Wage employer movement is growing. Leading the growth is mainly smaller, private sector firms – accounting for around 60% of all accredited employers. This pattern is testament to the impressive business benefits associated with paying staff enough to afford a decent standard of living, where accredited employers have reported better recruitment and retention of staff, reduced absenteeism, higher morale and better quality of work. The business case is only part of the motivation –employers can enjoy a boost in company reputation too (93% reported this in our recent Employer survey).  As third sector organisations have become increasingly professionalised in recent years, the business case for living wage accreditation is more important than ever to the sustainability and growth of our sector.

With the movement growing, employers are accrediting faster in Scotland compared to the rest of the UK. Yet almost 20% of the total workforce in Scotland receives less than the real Living Wage. The third sector is not blameless in this picture, as low pay remains a problem. Of particular concern, the Low Pay Britain 2016 report shows that across all measures, those most likely to be low paid include women, the young, part-time and temporary employees; groups which often make up larger proportions of a charities staff. 

A recent study reminded us that poverty remains the number one reason Scotland’s children’s health is among the worse in Europe. With more than 900,000 people living in poverty, and over half of them in working households, something needs to change. The real Living Wage is a tool at our disposal to help address rising levels of in work poverty. To borrow a phrase from the CEO of one accredited charity; People who work in charities deserve a Living Wage and should not themselves become a charity case.

Against a backdrop of concern over future economic stability and an increasingly competitive environment, I recognise that charities are feeling the pinch.  I am certainly not the first person to highlight that the third sector has a role to play in leading the Living Wage revolution, but many are facing disillusionment around the barriers that hinder the sector to step up to the challenge. Despite aspirations to commit to Living Wage, the reality is often balancing support of Living Wage with the pressure of managing tight budgets.

Living Wage Celebration
OSCR staff celebrating Living Wage Accreditation at The Gathering 2017 with Lynn Anderson of Poverty Alliance (Pictured far right). 

The good news is that we are seeing a culture shift in the grant funding environment – with more funders publicising their status as a Living Wage Friendly Funder. Friendly Funder status offers reassurance that grant makers want to fund posts at Living Wage, and encourage charities to include this in the costings of their bids, but importantly, will not lose out if there are legitimate reasons that Living Wage cannot be paid. Outside of the Friendly Funder scheme, The Scottish Funders Forum reported at our Living Wage Expo 2016 that there is a generally an increased appetite amongst Grant Funders to fund posts at Living Wage – so my advice is to ‘ask and you might receive’. By flying the flag for the living wage, Friendly Funders are opening a door to support smaller organisations to increase staff wages, and this creates an opportunity for these organisations to consider becoming an accredited living wage employer in their own right.

For charities that bid for public sector contracts, Living Wage accreditation can be helpful as Living Wage is often considered in tendering. Accreditation shows that charities have not only committed to paying the real Living Wage to their staff now, but have taken the leap to keep their lowest wages in line with the real cost of living. In prioritising an operating model with Living Wage at its core, charities can demonstrate their commitment to fair work principles. 

Amongst the general public, charities can arguably be under extra scrutiny in the expectation of responsible business practices; some might expect low pay from the private sector, but not from a value led charity. I’ve attested earlier that private sector firms are leading the Living Wage movement by accounting for the majority of accredited employers, but we still have a long way to go. Industries where low pay is too common often provide services to charities, like cleaning, hospitality and security. By becoming an accredited Living Wage employer, charities can affect change in these sectors in 2 ways. Firstly, on a broad scale; simply by leading from the front on responsible pay, raising awareness about Living Wage in the communities which they operate, charities can demonstrate that Living Wage can and should be a core part of responsible business. Secondly, and in many cases most crucially, accreditation requires any regular third party contract workers to receive the Living Wage too. This means that contracts covering services like cleaning, security, hospitality and many others will have Living Wage on the agenda as a by-product of employers seeking accreditation. This element of the Living Wage commitment has directly improved the lives of workers, and is increasing awareness of the real Living Wage in the service industry. Committing to Living Wage accreditation is an unambiguous statement that workers in all categories are paid enough to live a decent life and are valued.

Charities are often in the best position to recognise the strong social case for paying the Living Wage, and I remain optimistic that our sector can become even greater champions of the Living Wage movement. With some of the considerations mentioned above, more charities are taking the leap to join the movement. If you are ready to take the leap to commit to the real Living Wage and enjoy the recognition that accreditation offers, we want to hear from you. If you are not ready, we still want to hear from you – we can offer support to develop a pathway to becoming a Living Wage employer, contact me and we can chat about the journey. I look forward to welcoming you on board.

To find out more, contact

E: lynn.anderson@povertyalliance.org.uk

T: 0141 353 0440

W: www.scottishlivingwage.org

What is Living Wage accreditation?

The Scottish Living Wage Accreditation Initiative was established in April 2014 with the aim of increasing the number of employers in Scotland who are recognised for paying their staff the real Living Wage.

The ‘real’ Living Wage is an hourly rate independently calculated by the Resolution Foundation according to the basic cost of living in the UK. The rate is announced each November by the Living Wage Foundation and is currently £8.45 for the UK (£9.75 for London) - significantly higher than the government minimum rates.

Written by: Lynn Anderson

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