This week we learned about the planned increase in the National living wage, set to boost the income of low-paid workers around the country. It was announced that rates from April 2022 will rise to £9.50, representing an increase of 59 pence or 6.6%. Workers in London will also see their pay boosted by 20p to £11.05. 

The good news is that more than 300,000 workers across the country will get a pay rise, as the Living Wage Foundation’s successful campaign raising awareness amid growing fears over a squeeze on household incomes this winter came to fruition. These changes will apply to workers at about 9,000 living wage employers (including more than half of the FTSE 100), who adopt the voluntary pay measure.

With UK households warned of a further 30% rise in energy bills next year and fuel prices hitting record highs resulting in 1 in 6 Brits having to work from home, it’s safe to say that this news is welcomed by the typically lower-paid workers who have kept us going over the past 18 months or so.

According to Katherine Chapman, director of the Living Wage Foundation, almost five million employees are still paid below the voluntary living wage and many of those were “people working jobs that kept society going during the pandemic, like social care workers and cleaners”.

National Living Wage 2021 - Benefits for employers

For employers there are a host of benefits unlocked by complying with the National Living Wage 2021, such as; improved reputation, increased motivation and retention, ability to differentiate from competitors and positive improvements to manager and worker relationships. It’s pleasing to find out that according to the Living Wage Foundation, one in 13 people now work for an accredited Living Wage employer. And more and more organisations are signing up to lead the way, and some of our clients, especially in the construction landscape are playing their part:

Dean Finch, Group Chief Executive of Persimmon Homes, said: “I want all our employees to feel valued and fairly paid for the good work that they do. Paying the Real Living Wage is an excellent way of demonstrating this.

“I am therefore delighted we have become a Living Wage Foundation accredited employer and joined what is an important campaign.”

So what does this mean for hiring managers?

The increase in National Living Wage has landed at a time where many companies are struggling to hire, especially for low-wage roles, with demand surging and workers in short supply.

For businesses finding it difficult to attract talent in a candidate short market, creating and maintaining an attractive employer brand is crucial. In an environment where ‘cash is king’, particularly for the younger generation and entry level roles, it’s important to be able to illustrate compliance with the National Living Wage, while ensuring other desirable elements such as work life balance, job security and training are still in place.

While almost 7 in every 10 employees (69%) say they feel confident to move to a new job in the next couple of months, higher pay has the ability to improve staff loyalty and retention and engagement.  

As a real Living Wage Employer such as Persimmon, your recruitment power will increase, making it easier to attract new staff - at all pay levels.

about the author
Adrian smith
Adrian smith

Adrian Smith

senior director of operations

Randstad Construction & Property, Technologies and Business Solutions