One of the fundamental needs, says Maslow’s theory, is the need to feel safe. One of the key aspects for an employee to feel safe is to earn enough money to avoid financial worry and be able to provide for themselves and their family.

Many businesses believe that the UK’s statutory National Minimum Wage of £6.50 an hour (set to increase to £6.70 in October) is not enough to live on, and have decided to pay staff more to help ensure that these basic needs are met. 

Although many companies worry about the higher costs that paying higher wages will incur, a lot of the firms that do so have found there are numerous benefits to reap, as label printer Watermill Press has discovered.

The challenge

Watermill Press supplies secondary labelling consumables to a large proportion of UK businesses in the food manufacturing, soft drinks and retail industries. 

It was established in 1994 by friends Dale Deacon, Ian Sharp and Sandra Carr, who all still work full-time within the business, as managing director, sales director and print bureau director respectively.

The trio began trading with a single desktop thermal printer and a telephone set up at the home of one of the directors.

Rapid expansion from day one saw the company quickly acquire larger kit and grow through various stages into a 2,323sqm manufacturing unit in Bradford, West Yorkshire.

The company quickly realised that its staff were its most important differentiator in a crowded and competitive marketplace and, even during the recession, it made a commitment to its employees that it wouldn’t make redundancies or cut wages to manage costs if this was possible to avoid. 

Deacon confirms that the business stuck to its word, although cutbacks had to be made in other areas, primarily directors’ pay.

“Strong growth has returned to our business over the last two or three years and once again our colleagues never fail to step up to the plate,” says Deacon.

The business has motivated its staff in a number of ways over the years, in particular by paying them significantly more than the National Minimum Wage. Last September the firm showed its commitment to the cause by obtaining Living Wage accreditation from the Living Wage Foundation.

The foundation, which is run as a charity, annually reviews rates for the non-statutory Living Wage. These are based on extensive annual research of actual living costs conducted by Loughborough University’s Centre For Research In Social Policy.

The Living Wage Foundation has set the current living wage at £9.15 an hour in London and £7.85 across the rest of the UK. Nearly 1,300 employers have reportedly already become accredited Living Wage organisations, including more than 20% of FTSE 100 companies.

“We’ve always paid well above the minimum wage, well above the industry average and well above rates for comparable jobs in other industries in our geographical location,” reports Deacon.

“Even the terminology involved in paying a minimum wage is counterproductive. If that’s how an employer describes their side of the bargain, then is it any wonder that some employees will see that as an apt description of the level of commitment and engagement expected in return?”  

The method

Deacon had read about the Living Wage campaign around three or four years ago and decided it was something that Watermill should get involved in, as it fit with the firm’s core values and ideology.

“Our staff were already earning above the Living Wage but there was still interest in it and appreciation that we were doing this. They like the fact that the business has a good reputation in the community that they live in,” says Deacon.

The administrative process of becoming accredited was simple and inexpensive, confirms Deacon.

“I did it through the Living Wage Foundation’s website. I emailed them to say we were interested and then there was a four-page document to fill in which only took around an hour. It only costs us £100 a year to use the logo and the marketing.”

Accreditation represents a commitment by an organisation to pay all directly employed staff a minimum of whatever the Living Wage is currently set at. Firms are also required to commit to implementing any new rate within six months of it being announced.

In addition, accredited organisations have a duty to make an effort to try and extend the Living Wage standard by promoting the philosophy back down through their supply chains.

“Our ultimate goal is to only purchase materials, goods and services from other Living Wage accredited organisations,” explains Deacon.

“Several of our existing suppliers are in the process becoming accredited as a result of us raising it and talking to their directors about it. We’ve got a couple of people who have gone away to do some more research on what it means and what the implications are for themselves.

“The biggest single myth you have to dispel with people is that it is an additional on-cost. It’s not; you get back many times what it costs you if you get it right.” 

The result 

In October last year, a month after Watermill obtained its Living Wage accreditation, the business was visited by Green Party leader Natalie Bennett, who presented it with a wall plaque to mark its commitment.

The Green Party is campaigning for the introduction of a £10 hourly living wage across the UK by 2020 but Watermill is already one step ahead of the curve.

“Our minimum rate of pay within the business will increase to £10 per hour in the summer, which is far in excess of the current Living Wage,” says Deacon.

The business has seen a number of benefits from adopting this policy, which have only strengthened since obtaining Living Wage accreditation.

“Staff who feel properly valued by their employer reciprocate in a very positive manner. By paying a living wage you get a much better level of staff stability, a much better level of staff engagement and commitment, higher productivity and accuracy and attendance is better. People just bring a better attitude to work,” reports Deacon.

“Our experience at Watermill is that the benefits we gain from improved team engagement far outweigh the relatively small additional costs involved. 

“We have a good level of profitability on our turnover and the amount of turnover we make per head of employee is among the best in the industry.”

The company also has a low rate of staff churn, meaning its recruitment, initial training and induction costs are minimal.

“When we do need to recruit additional members of staff to manage our continual business growth, it is relatively easy to attract skilled, trained operatives from other companies who prefer to pay much lower pay rates,” says Deacon.

The business has also ensured that it provides and cares for its staff in a multitude of other ways.

“We have a little gym for staff to use and we’ve had periodic fundraising events that the staff have supported,” says Deacon.

“They appreciate the security of their employment, the communication and fairness of the directors and the fact that they are decently paid.”

The business has recently invested £1m in three new AB Graphic Omega label converting devices to add to its current fleet of seven AB Graphic machines and support its continued growth. The new equipment has helped the firm to win significant new contracts and increase its turnover from £5.5m to £7.5m.

The company’s employees are always motivated to learn how to use new equipment and happy to adapt quickly to technological changes and other processes, claims Deacon.

“When we get new piece of machinery in we even have a competition amongst the staff as to who’s going to step up and learn it to expand their capabilities.”

Deacon says he would strongly encourage other print and labelling companies to contact the Living Wage Foundation to find out about the benefits of becoming accredited.

“We have yet to find the point where the additional costs involved in paying all our staff a decent, dignified rate of pay exceeds the benefits we enjoy as a business in return,” he concludes.  

VITAL STATISTICS 

Watermill Press

Location Bradford, West Yorkshire

Inspection host Managing director Dale Deacon

Size Turnover: £7.5m; Staff: 26 

Established 1994

Products Manufacturer and supplier of product identification labels and services 

Kit 10 AB Graphic Omega label converting machines, two Toshiba Tec desktop thermal label printers, two Zebra desktop thermal label printers and two Printronix desktop thermal label printers 

Inspection focus Becoming Living Wage accredited

TOP TIPS

Focus on the positives that becoming a Living Wage employer can bring to your business. “The biggest single myth you have to dispel with people is that it is an additional on-cost. It’s not; you get back many times what it costs you if you get it right,” says Watermill Press managing director Dale Deacon.

The benefits of becoming a Living Wage employer can include better staff stability, a higher level of staff engagement and commitment and higher productivity and accuracy. “People just bring a better attitude to work,” says Deacon.

Bear in mind that highly skilled people want to earn a wage that reflects their abilities. Paying the Living Wage can help to attract high-quality, skilled and trained operators from companies who pay much lower rates.

Contact the Living Wage Foundation for assistance in becoming accredited. “Accreditation is a relatively simple process and the staff at the Living Wage Foundation are  extremely friendly and helpful,” says Deacon.

Understand that being accredited means you have to proactively promote the Living Wage standard. Accredited organisations have a duty to make an effort to try and extend the Living Wage philosophy down through their supply chains.

Providing for staff in other ways is also important. Watermill Press has a gym on-site for its employees, it offers regular training, a comfortable and safe working environment and provides regular feedback and performance appraisals.