Good Work for All: Making pay more competitive: how Oliver Bonas successfully introduced the real Living Wage

High street retailer Oliver Bonas introduced the Living Wage in September 2015. In the following six months staff retention increased, there was a small decline in sickness and absence rates and it has been easier to attract good quality employees. The move has also improved the company brand among customers leading to increased sales.

The high street retailer Oliver Bonas designs, produces and sells a range of fashion, jewellery, homeware and gifts. It has 55 stores across England, Scotland and Ireland, as well as an online store. Oliver Bonas employs approximately 650 people, of which, just over 500 work in its stores, with the rest working in its support office and distribution.
 
Oliver Bonas adopted the voluntary Living Wage on the 1st September 2015. The business wanted to pay a wage its employees could really live on, and recognised the need to attract and keep the best people because of its focus on customer service. The decision was prompted in part as a response to an employee survey which showed that a third of its workforce did not feel that its pay was as competitive as it should be.
 
The process
The decision to pay the Living Wage was not immediate. The business undertook a pay review that looked at a whole range of different scenarios. A project team was put together which included the human resources, operations and finance departments. As part of the assessment, the team looked at how much it would cost and which of its employees it would affect. Crucially, the team also assessed how it would affect other roles in the business, because of the need for pay differentiation.
 
Oliver Bonas wrote to all of its suppliers to inform them of its commitment. Many of the suppliers responded confirming that they already paid the Living Wage but one cleaning company did not. They agreed on new terms so that they could pay the increase to its staff. The business also looked at bonuses and commission as part of the pay review. Crucially, they were able to show that all employees would be earning more as a result of the change. A communications plan was developed with letter templates, question and answer sheets and a clear message for internal and external audiences so that all staff were aware of the impact on them.
 
The benefits
  • Two thirds of Oliver Bonas’ employees were directly affected by the move to Living Wage.
  • In the six months after introducing the Living Wage, staff retention increased and there was a small decline in sickness and absence rates.
  • It has been easier to attract good quality employees who want to stay with the business for longer.
  • The business has seen sales increase over the period, and there is a clear sense that the Living Wage has improved the company brand and that some customers have noticed the decision and are “making that conscious choice to spend its money in a store where employees are being looked after.”

“It definitely makes it a more appealing company. It’s a fantastic company to work for anyway, the people are great, but I do think the part-timers and for students, those people who are trying to make ends meet it’s definitely more encouraging. The jump for the part-timers was something like £2 an hour so it’s a massive incentive. I think people are more likely to stay. We saw that after we went living wage…. We’ve had [customers] say that it’s really fantastic and I do think that people react to it and they see it as a more ethical way of shopping if they know we’re being treated right it makes them feel better about putting its money into that business.”
Full-Time Team Member, Oliver Bonas

 
Lessons learned and advice for other employers
The introduction of the Living Wage at Oliver Bonas is regarded internally as being a real success both in terms of the way it was introduced but also the benefits to employees and the business. What made it a successful change process included the development of a clear plan; the establishment of a team with buy-in from the leadership and across the business; a robust assessment of costs to the business of both the Living Wage but also the knock-on effects in terms of pay differentials; early engagement with suppliers; and a clear communications plan both internally and externally.
The investment in employees, combined with strong business growth, has provided an opportunity to look at wider operational issues including improvements to recruitment, scheduling, store staffing structures and training. The Living Wage is a good opportunity to make wider business improvements, and Oliver Bonas stress the importance of looking at these issues early on in the process.
 
“I would encourage other employers to [pay the Living Wage], particularly in the service industry. But I would also encourage anyone who’s considering paying the Living Wage to think longer term. Anyone going into this process needs to make sure any data they have going into the process has integrity and then they should be very clear about how they’re going to monitor the impact of the Living Wage. They should plan really well, have a proper timeline, and ensure everyone is onboard - get everyone bought in from all sides of the business... It’s a really good opportunity to look at things more generally rather than just the direct costs.” Anna Parfitt, Head of HR at Oliver Bonas development programmes explains.
 
These changes are viewed as having heightened the impact and allowing the business to accrue greater benefits than if the Living Wage had been implemented in isolation.
 
“Allow yourself plenty of time. Don’t just look at how it’s going to affect you for the first year; look five years into the future. Combine it with an overall look at how you’re treating your staff. It can’t be a band-aid, if you’ve got deeper staff engagement problems or deeper dissatisfaction issues it’s highly likely that you’ve got other things going on as well. The impact of doing something will be lessened if you don’t. Fix those at the same time.”
 
This case study has been produced by The Living Wage Foundation.