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Benefits of the Living Wage

Reduced absenteeism and better staff retention highlighted by new report.

Improved productivity and an enhanced company reputation have been highlighted as key benefits of organisations implementing the Living Wage according to an independent report.

The report – Wider Payment of the Living Wage in Scotland – highlights that increased productivity is also likely to outweigh the higher wage for many firms with increased pay creating a ‘feel good factor’ in the workplace.

Reduced absenteeism and reduced staff turnover have also been outlined as potential benefits by the report, which has been published ahead of tomorrow’s second meeting of the Fair Work Convention.

Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham welcomed the report and said:

“This is a fascinating report which, on the whole, offers a very positive outlook on the benefits of paying the Living Wage.

“As well as the more obvious benefits to individuals receiving higher pay, I hope the findings on improved rates of absenteeism and better productivity help convince employers, not already on board with the Living Wage, that it could be a very positive step for their business.

“A number of respondents also mentioned the reputational benefits of being a Living Wage employer, including reinforcing their positioning as ethical and socially responsible businesses.

“The Scottish Government is committed to fairness, supporting those on the lowest incomes, and we recognise the real difference the Living Wage can make to the people of Scotland. We have been working closely with the Poverty Alliance to encourage every employer to ensure all staff receive a fair level of pay. The Fair Work Convention, which meets for the second time tomorrow, is looking a number of ways to improved workplace relations and productivity, with fair pay seen as key to their work.

“Some of Scotland’s top employers already pay the Living Wage, with Aberdeenshire beer company Brewdog, fast-becoming one of our most recognisable brands becoming the 200th accredited organisation last week.

“A KPMG report from last month showed that Scotland is most Living Wage-aware region in UK with 9 out of 10 Scots having heard of the Living Wage and a higher proportion of employees paid the Living Wage than the UK as a whole.

“But employers paying the living wage is only half the story here. The tax and benefits system needs to work smarter to make sure that people on low incomes see a greater share of any increases in pay – and we will press the UK Government to make sure this happens.”

Notes To Editors

The report ‘Wider Payment of the Living Wage in Scotland’ was carried out by Ipsos MORI and Loughborough University and can be found at:

The study was conducted using a combination of primary and secondary research methods. The primary research consisted of 11 in-depth interviews with Scottish Living Wage employers, 29 Scottish Government contractors and 8 stakeholder organisations representing key sectors and industries. The secondary research consisted of a review of existing international literature about the impacts and practicalities of introducing the Living Wage.


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