LEARNING AND DEVELOPMENT ANGELA BINGHAM
Providing the living wage – and then what? By Angela Bingham
When psychological needs are met, individuals can grow, develop and turn into their best self. In this article (the first in a series of four), Angela Bingham, Executive Director of People and Capability at the Open Polytechnic, shares her thoughts on how we can truly invest in our people, starting specifically with how we can support our lowerincome earners.
M
y opinion when considering how to invest in people at the lower end of the salary scale is to consider four key areas: 1. The starting point – minimum wage or living wage 2. The benefits being offered to staff 3. The remuneration strategy 4. Investing in education. Let's start at the beginning. The purpose of organisations is to find ways to entice individuals to work for them and to retain them. That enticement comes in many forms, from the brand of the organisation, the value offered to the individual (high salaries, development pathways 20
HUMAN RESOURCES
SPRING 2019
or grateful to have a job). Gallup’s research tells us that the way we get the most out of our workforce is to meet their psychological needs. Ultimately, we want our staff to be their best selves, all day every day. So how does that all apply to the living wage conversation?
Minimum wage or living wage?
This year we saw the minimum wage increase 7 per cent, and there is increasing pressure on organisations to ensure staff are on the living wage. My question to you – is it enough to provide staff with just the minimum wage? The answer lies in a number of different economic and political philosophies. US Congresswomen Katie Porter challenged one of the large US banks on the struggle of families who are bringing in minimal wages. This was a great example of how chief executives and boards can become disconnected with the everyday needs of families living close to or below the breadline. The general view was that there was a budgeting issue with low-income families rather than the adequacy of the dollars coming in. So back to my question – are New Zealand organisations doing enough? Who's responsibility should it be? The government, the employer
or the individual? Ultimately, it is a community problem and requires a community solution. For now, I am sure you are focused on the role of the employer. For some organisations, the increased cost of the minimum wage will put significant pressure on the bottom line. Those organisations balance affordability and equitable remuneration strategies. I believe it's more than a solid remuneration strategy. It is a tricky and essential topic. Different benefits have different value. Some staff want benefits to help them be more efficient (time poor). Others want benefits that they don’t have access to (cash poor). The true solution lies in the capacity to continue the conversation and think broader than just salaries and wages. The tricky part is that the government sets the tone with our tax structure and the minimum wage. When individuals are in a position of touching the breadline, they too are limited on how they move up the salary grades. So, there is a responsibility of the employer to provide a variety of benefits that will take the pressure off just a bit.
Benefits
• Living wage as a minimum is a solid place to start.
