21 April 2016 | Herpreet Kaur Grewal
Londoners are most likely to be more loyal to an employer paying the new living wage, with 58 per cent saying they would be more committed, whereas respondents in the North-West and Yorkshire are least likely to agree, according to a survey.
A sample of 2,020 men and women over the age of 16 based in locations across the UK was surveyed by consultant Censuswide, on behalf of workforce management software developer Kronos Incorporated.
Respondents revealed their thoughts about the introduction of national living wage (NLW), highlighting the impact they expect this will have on wider pay scales, loyalty, and productivity as employees and businesses in the UK adjust to the new legislation.
The research also shows that in return for paying the NLW, a third of survey respondents believe that organisations will expect greater loyalty from them in return, while more than half predict that management will demand increased productivity. And more than two-thirds of respondents say they would have been more loyal to their current employer if they had voluntarily introduced the NLW ahead of the legislation.
Understanding the different motivations of multi-generational workforces will be "central to organisations positively impacting this loyalty", says the survey, with 62 per cent of 16-24 year-old respondents confirming they would be more loyal to employers if they had the chance to be paid the new living wage.
There is a significant disparity with the older generation, however, as only 36 per cent of respondents over the age of 55 feel the same, revealing that millennials place higher importance on salary.
Organisations will need to understand what motivates staff to drive increased performance, with 41 per cent of respondents rating flexible working as the number one perk, placing it above benefits such as increased basic pay and additional paid holiday.
But respondents over the age of 55 are the least motivated by flexible working (37 per cent for those over 55, compared with 45 per cent for the 35-44 age group).
Neil Pickering, industry and customer insight manager at Kronos: "Now that the dust has settled on the introduction of the national living wage, everyone is aware of what it means for employers. It is not as clear how employees expect the wage increase to affect their working lives. If businesses are to turn the regulation into a positive, a clear understanding of what the workforce thinks on the issue is crucial.
"Most employees believe that management will demand higher levels of productivity in return for increased pay. If this is the case, organisations need to give staff the tools they need to achieve these new targets by implementing the appropriate technology and processes. Businesses should also be aware that, in the weeks before the legislation was implemented, more than two-thirds of people claimed they would be more loyal to their current employer if they increased wages ahead of the regulation becoming compulsory.
"Our research also reveals that, for older employees, payment of the national living wage is much less likely to lead to increased loyalty towards an employer than it is for their younger colleagues. Clearly while pay is important, it is just one of the many ways to motivate and engage employees. Like all critical assets, managing your people requires time and investment and businesses will have to look closely at what incentives to implement to effectively motivate every employee.
"It is clear that if businesses choose to accommodate the national living wage by simply making cuts, they risk damaging employee engagement, but if they take the time to consider how to create a more engaged, productive workforce, there is a much greater chance that the national living wage can be turned into a positive."