28 August 2015

Sainsbury’s announced a 4% pay rise for 137,000 of its employees this week, bringing the company’s wages closer to the living wage level. Whilst it’s a fantastic step for the notoriously low-paying retail industry, I can’t help but question the motives and ask ‘is it enough?’. economy

In my opinion, our economy hinges on businesses giving back – we have given our whole team a 5% pay rise every year, without fail. Wage growth after years of stagnation across the country, and while inflation is sitting pretty around the zero mark, is obviously a positive step. It gives workers the confidence and means to loosen the purse strings and enjoy life more. That, in turn, means more money going into the economy as a whole. Hopefully to British firms paying British taxes and not to the international conglomerates sneaking their money off-shore – but that’s a tale for another day.

And whilst it could be said that this was a PR stunt, jumping the gun ahead of the national so-called living wage, it is still undeniably a positive step. But is it enough? This is the largest pay increase in a decade and it seems, in part, down to the necessity of it with the proposed government ‘living wage’ changes.

Retail employees are those at the coal face, delivering face-to-face service to customers and are the day-to-day representatives of these brands. Are they likely to provide a great level of service when they’re demotivated and feeling undervalued?

According to the media, Tesco is paying £7.39p, 3p more than Sainsbury’s new wage, but Morrisons lags a little behind at £6.89. I hope that the headline-hitting hike from Sainsbury’s now triggers a series of wage increases to boost these figures across the industry as a whole. The Big Four are renowned for trying to trump one another – I’ve written about the ‘Banana Wars’ before – let’s hope they feel that way about wages too.

Money isn’t the ultimate driver for employees, but I would never underestimate the impact that it has on how valued they feel, how well they perform and how much they put back into the economy themselves.

I don’t think that the challenge for these firms is to increase wages to meet the national minimum requirement or necessarily to shout about it when they do, in my opinion the challenge is to find a way to engage staff and help them to enjoy their job. Happier team means happier clients which, in turn, means more money spent in-store, and a happier economy. I don’t profess to know everything about the industry, but it seems like this could be a simple route to helping supermarkets to flourish once more.

Having cut 800 jobs earlier this year and reported a sixth straight quarter of falling sales, it seems this highly-publicised 4% increase is actually sweeping a much bigger issue under the rug.

If you’re an employer, ask yourself this: ‘Are you giving enough back to your employees? Are they motivated? Are they representing your brand in the best way possible?’.

I’d love to know your thoughts on the supermarket wage hike, let me know what you think in the comments below.

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