Credit: William Warby

Why Oliver Bonas is smart to adopt the living wage

As the introduction of the mandatory national living wage looms, some businesses are jumping before they're pushed.

by Adam Gale
Last Updated: 21 Dec 2015

Fashion and homeware retailer Oliver Bonas has become the latest business to adopt the living wage, announcing that employees in its headquarters, warehouses and 43 stores will receive at least £7.85 an hour (£9.15 in London).

It chose an auspicious day for it. The government’s been making its own, decidedly less feel-good noises about pay today, saying that firms dodging its new national living wage (a misnomer – it’s basically a higher minimum wages for over 25s) will face harsher sanctions than at present, with a maximum penalty of £20,000 per employee.  

Oliver Bonas joins over 1,700 businesses accredited by the Living Wage Foundation, an independent body campaigning for firms to adopt higher basic pay voluntarily. The list also includes  Nestle, Linklaters (one imagines it was quite easy for it to commit to paying £7.85 an hour, somehow) and Ikea, which committed to the pay increase last month.

Whether raising wages would be good for businesses and the economy is a matter of opinion, with ex-Sainsbury’s chief Justin King saying last week that it would cost jobs (despite his old firm raising wages to £7.36 last week), and the Office for Budget Responsibility claiming it will create them. But for public-facing firms like Oliver Bonas, jumping before being pushed, and jumping further, is a smart PR move.

Firms signing up to the living wage not only appear generous and public-spirited, but also presumably get access to a better class of employees – it’s costly, but it provides a distinct advantage so long as everyone else doesn’t join in.  

As wages rise across the country, and the new minimum wage comes into force next year, however, the group paying the higher living wage is likely to become less and less exclusive.

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