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How the living wage has impacted Scottish firms

Article by: www.scottishlivingwage.org | Published: 14 November 2017
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As the 1000th employer in Scotland joins the Living Wage movement, we look back at the remarkable journey of fair pay north of the border and ask Living Wage employers what they’ve learned.

From ‘punk’ beer company BrewDog to the owners of the country’s canals, Scotland’s employers have been signing up to the Living Wage in their hundreds – indeed, tens of hundreds. As part of this week’s Living Wage Week came the announcement of the 1000th real Living Wage employer north of the border – porridge maker Stoats.

It’s a remarkable achievement, both for the employers and the organisations behind them. The Scottish Living Wage Accreditation Initiative was established in April 2014. Hosted by The Poverty Alliance in partnership with the Living Wage Foundation, it is funded by the Scottish Government. The rate at which employers have become Living Wage accredited makes Scotland the region with the fastest take-up in the U.K.

“It can’t be a band aid”
One of the first to gain Living Wage accreditation in Scotland was BrewDog, whose decision was simply “the right thing for our employees”, says Fiona Hunter, Head of People at BrewDog. “We cannot expect our employees to come to work and be amazing when they are worried about making ends meet. Providing a good standard of living is the right thing to do, and it has the added benefit of helping our employees be as brilliant as possible, which drives the growth of the business.”

BrewDog’s accreditation process took around three months and meant the company took a close look at its other employee conditions, including revising and simplifying pay structures. Fiona’s advice to other employers is: “Allow yourself plenty of time. Don’t just look at how it’s going to affect you for the first year; look five years into the future. Combine it with an overall look at how you’re treating your staff. It can’t be a band aid, if you’ve got deeper staff engagement problems or deeper dissatisfaction issues it’s highly likely that you’ve got other things going on as well. The impact of doing something will be lessened if you don’t. Fix those at the same time.”

“We don’t see an alternative”
When McKean Developments Limited, a privately-owned specialist building contractor, became Scotland’s 100th accredited Living Wage employer in November 2014, the occasion was marked by a visit from First Minister Nicola Sturgeon. McKean still retains many of its own original employees – largely due to its reputation as a considerate employer, says the company.

“Even before we signed up to be a Living Wage employer, all our staff were paid over and above the Living Wage,” says McKean’s sales and technical manager Colin McLean. “At McKean, we don’t really see any alternative to paying the Living Wage. An admission from any business or administration that they ‘cannot afford’ to pay their staff a Living Wage’ is an admission of their failure as an employer.”

McKean’s payback as a company is high staff morale, low employee turnover and virtually non-existent sickness and absence. “As an added perk, our reputation is vastly improved and many of our clients now stipulate that their sub-contractors must be Living Wage accredited,” says Colin.

Ordinary people, extraordinary talent
Employee retention is an important perk for CMS Window Systems, Scotland’s 150th Living Wage employer, which employs 240 full-time staff at its manufacturing and recycling facilities in North Lanarkshire and Fife. With the slogan ‘Ordinary people. Extraordinary talent’, it says its employees drive its success. Says HR Manager Emma Phillips: “We want to retain our good employees and paying the living wage helps towards achieving this. It can make a real difference to our employees lives, giving them more disposable income which in turn has a positive knock on effect on the local community and economy.”

“It’s doing good but it’s also doing good business.”
“The accreditation process encouraged us to pause and re-evaluate,” says Steve Dunlop, CEO of Scottish Canals – Scotland’s 700th Living Wage employer. “We understand that our employees are our most important assets, so we don’t want to pay the minimum. This process has made us think about what people are worth. Committing to the real Living Wage is a way to demonstrate that we deliver on our promise to treat our staff fairly.”

Steve says the wider business benefits were a factor in becoming an accredited Living Wage employer, as well as the benefits to its employees. “It’s more than just going the right thing, there are business objectives too. We believe that in paying people a wage that reflects the real cost of living, this will raise motivation and improve productivity. I would strongly encourage other employers to follow suit to become accredited. It’s ‘doing good’, but it’s also doing good business.”

The knock-on reputational effect of paying a Living Wage was reinforced in a Poverty Alliance survey earlier this year, which found that three out of four Scots would think more highly of a company which became Living Wage accredited. It also found that four out of ten people in Scotland care if products and services they buy are from a Living Wage employer.

Part of the culture
The Scottish Living Wage Initiative has touched the charitable and social enterprise sector too. The 300th accredited employer in Scotland was Beatson Cancer Charity, which delivers patient and family support and funding for specialist posts and equipment. The West Coast firm, a partner of NHS Greater Glasgow and Clyde and of NHS Scotland, set an example for its sector as well as committing to fair pay for its staff.

More recently, as the 845th Living Wage accredited employer, the Wise Group – which delivers advice and counselling to vulnerable people and communities – considered fair pay a part of its culture. Says Laurie Russell, Chief Executive of the Wise Group: “We have chosen to pay the Living Wage as an important part of our investment in our people. Our culture focuses on ensuring that all our staff feel valued and recognised.

“I believe that the Living Wage sends a strong message to all our partners, stakeholders and employers about what kind of organisation we are. The Living Wage shows that people we support into work can escape low paid work that traps them and their children in poverty. Many families with children are struggling to survive financially and we will do whatever we can to ensure that work can really help and ultimately that is dependent on the rate of pay.”

Bucking the trend
Low pay is prevalent in both the hospitality and childcare sectors but it needn’t be, as several accredited Living Wage employers have shown. Firewater nightclub in Glasgow, the Scalloway Hotel in Shetland, the Mussel and Steak Bar in Edinburgh and the Riverside Cottage Nursery in Bathgate are among Scotland’s fair pay trailblazers.

As the 250th accredited Living Wage employer, Riverside Cottage Nursery in Bathgate says it’s time for businesses to “take their responsibilities seriously”. Says manager Luke Addison: “We are thrilled to be recognised as a nursery which has fairness and equity for both children and staff deeply embedded in our ethos. We believe that in our changing, growing country, everyone and particularly businesses must take their responsibilities to society seriously. A progressive approach is important to us.”

Two milestones at once
When drinks giant Diageo became a Living Wage accredited employer it created two milestones in one. They were the 900th Living Wage employer in Scotland and it also meant a third of the FTSE 100 were now Living Wage accredited. (Standard Life was the first Scottish FTSE 100 company to become accredited, in March 2014).

David Cutter, Diageo’s President of Global Supply & Procurement, explained their support for Living Wage: “We value all of our employees, working both directly and indirectly at our sites across the U.K. Creating a shared value for our employees, shareholders and communities is at the heart of what Diageo does as a business.”

What the employees say
Lauren Hendrie, 25, Destination Assistant at Scottish Canals, lives in Falkirk and is training to be a boat master. “To know your employer is going above and beyond is a nice feeling. It’s an incentive for employees to work hard. Everyone, regardless of age, is paid the same rate for the same job, which is makes the work environment less tense and removes any resentment. It creates an even playing field for staff.

“As an adult, I don’t want to have to rely on my parents for financial support, I want to be independent. The real Living Wage means I can manage my budget for everyday expenses, save some money and make plans for the future, like buying a home.”

Chris Queen, general manager of BrewDog’s DogHouse bar in Merchant City, Glasgow, has worked for 20 years in hospitality. He joined BrewDog in 2016.

“BrewDog is hands down the best employer I’ve worked with. Staff turnover is much lower compared to other hospitality companies. My staff feel valued and they are much more engaged. I think if you treat people with respect you get respect back.”

Neil Pyott, 19, is an apprentice with Scottish Canals and lives in Cumbernauld.

“The Living Wage was a nice welcome into the business, one that I didn’t expect, but it says a lot about the type of employer they were going to be. It shows that Scottish Canals is true to their word that you will be treated as an equal. I think you get the best out of people if they feel valued.  Also, Living Wage accreditation means that Scottish Canals is helping communities when local people are working with them – people who would otherwise be struggling to afford the basics.”

Carol Ann Lee is a nursery practitioner at Riverside Cottage Nursery in Bathgate.

“It makes a real difference at the end of the month for my family and reflects that I’m genuinely valued for my work. If this is possible in the childcare sector, there really is no excuse for any other company to continue paying the minimum wage.”

www.scottishlivingwage.org.