Living Wage accreditation in Scotland’s Third Sector

Lynn Anderson is a Living Wage accreditation officer for the Scottish Living Wage Accreditation Initiative. Her work includes a specific focus on Third Sector.

The third sector is perceived to be value-driven, and with rising levels of in-work poverty, the moral case for paying the real Living Wage is more important than ever. Against a backdrop of concern over future economic stability and an increasingly competitive environment, I recognise that charities are feeling the pinch.  Despite aspirations to commit to Living Wage, the reality is often balancing support of Living Wage with the pressure of managing tight budgets. For those that can afford to, it is your time to lead from the front and make Scotland’s Third sector even greater champions of the Living Wage.

With over 700 accredited Living Wage employers in Scotland, it is clear the Living Wage employer movement is growing, but 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; 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.

Interestingly, 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, and 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. 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 they themselves become a charity case.

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. The good news is that we are seeing a culture shift in the grant funding environment – with more grant-givers keen to fund posts at Living Wage. More funders are formalising this commitment by signing up to the Living Wage Friendly Funder initiative. This initiative encourages charities to include Living Wage in the costings of their bids, but importantly, will not lose out if there are legitimate reasons that Living Wage cannot be paid. This refreshing approach is 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. It keeps Living Wage on the agenda, to encourage those that aren’t ready yet, to keep working toward that aspiration.

For charities that bid for public sector contracts, accreditation can be helpful as Living Wage is often considered in tendering (generally under a workforce issues category – which are relevant to a huge chunk of contracts). 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, which can score points in the tendering process. 

Especially for Third sector employers already paying at least the Living Wage, another driver to become accredited is public perception. Third sector employers can often experience extra scrutiny; fair dealing is expected in our sector and accreditation is a strong indicator of being a fair dealing employer. The importance of marking commitment to decent wages is especially important for organisations operating in areas with high levels of deprivation; A Living Wage employer can demonstrate solidarity with their local communities.

In terms of impact, even Third Sector employers already committed to paying staff at least the Living Wage can affect change by becoming accredited. A crucial aspect of formal accreditation is to build Living Wage in to relevant contracts, which can benefit third party contract workers. Services commonly procured, like cleaning, security and hospitality will benefit from value-led employers taking a stand. In models where the only worker to benefit is a cleaner, imagine how impressed your cleaner would be if your efforts to become a Living Wage employer meant they received a pay rise? Granted, for larger employers with a huge supply chain, this element of accreditation is more involved compared to an operation where nothing is contracted in or out, however I would remind any sceptics on this element that it has been done before – (many times, as large Housing Associations, Local Authorities, Universities have achieved accreditation), it is achievable; (we are here to offer guidance) and it is worth it. 

We should therefore not underestimate the potential for our sector to be revolutionising the Living Wage movement.  Our sector can lead from the front on fair dealing. By becoming a Living Wage employer, this is an unambiguous statement that workers in all categories are paid enough to live a decent life and are valued.

With some of the considerations mentioned above, 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. We do hope to welcome you soon to the growing movement of Living Wage employers across our sector.

 

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.