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The UK’s wage endemic:

The UK’s wage endemic:

With recent figures from the Office of National Statistics showing that wages aren’t rising in line with the rate of inflation, and research from the Social Mobility Commission finding that a quarter of low paid workers remain stuck on a low salary, this year’s Living Wage Week is a timely reminder of the need for businesses to address the UK’s wage endemic.

In 2016 the government introduced the National Living Wage – a rebrand of the National Minimum Wage. While this was a step in the right direction, it doesn’t take into account what people truly need to have a good quality of life.

The voluntary real Living Wage however is independently calculated each year based on real living costs, proven to make a genuine difference to workers’ lives. Today, the real Living Wage rate for 2018 has been announced as £8.75 per hour (£10.20 in London).

To date, 3,500 responsible employers have signed up to the real Living Wage, in turn benefitting over 150,000 workers which is a huge achievement.

But at a time when UK workers are facing the rising cost of living while wages are being squeezed, paying the real Living Wage is now more important than ever for all businesses, so there’s still some work to be done.

From stepping onto the property ladder to affording holidays, we’ve witnessed the huge impact and positive contribution the real Living Wage has had on our co-workers’ lives since IKEA UK became the first major country-wide retailer to pay it in April last year.

At IKEA, we care about people first and firmly believe they are at the heart of what makes our business successful. For us, offering co-workers the real Living Wage was not only the right thing to do, but it also makes good business sense.

In FY16 alone, we invested £11 million in our people as we introduced the real Living Wage. This long-term investment is based on our core belief that a team with good compensation will build a better experience for customers, in turn leading to more business success.

According to the Living Wage Foundation, an incredible 93% of real Living Wage businesses say they have benefitted since they received accreditation, and 75% have noticed an increase in motivation and retention rates. This goes beyond salary – as employers we have the responsibility to secure ethical employment standards and support a balanced, positive work-life.

With increasing numbers of workers living on the breadline, our belief is simple: it’s crucial that other like-minded businesses pay their employees the real Living Wage. Based on our experience it helps companies to attract and retain a talented workforce which is the key to lasting business success, and together, we can create a better society.

Pernille Hagild is IKEA UK’s Country HR Manager