Increased productivity is likely to outweigh the costs of paying the living wage for many organisations, according to a new report.
The report, Wider Payment of the Living Wage in Scotland, published by the Scottish Government, looks at the benefits and concerns surrounding implementing the living wage of £7.85 per hour.
It found that employee benefits can include an enhanced standard of living, better health and wellbeing and improved morale.
Organisations can benefit from an enhanced reputation, the ability to recruit higher-calibre staff, a better working environment and greater staff engagement, the report claimed.
Key concerns about the living wage include the potential impact on an organisation’s ability to remain competitive, the potential negative impact on their profit and the potential impact on wage costs by creating an inflationary impact on wages across the organisation.
The report was compiled using existing research on the impacts and practicalities of introducing the living wage and a series of in-depth interviews with Scottish living wage employers, Scottish Government contractors and organisations representing key sectors and industries.
Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills and Training, 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.”
She added: “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.”