Two years ago SSE became an accredited Living Wage employer. At the time we were the biggest company in the FTSE100 and the only energy company to achieve Living Wage accreditation.
We felt it was imperative for a provider of an essential service like energy to ensure that all our employees received a fair day’s pay for a fair day’s work. As things stand the Living Wage remains the best way for a company to help workers avoid the low pay trap.
At the time, 158 SSE employees received a pay rise. This was great for them, but for a company our size, the number of people involved was not enormous. That was simply because the energy industry is not a classically low paid sector, like retail or catering can be.
But we knew the biggest splash we could make tackling in-work poverty would come with our £2.2bn supply chain. Our suppliers could be anything from providers of the blades that power our turbines at our windfarms to cleaners providing services at construction site offices.
Living Wage employers make sure their own employees earn a wage they can live off, and ensure that contracted employees on their sites earn it too. But how much impact do we have? How many people working at our sites for our suppliers benefit from coming under the umbrella of SSE being Living Wage accredited? How much extra money goes into their pay packets as a result?
Well, we finally have the numbers and they make encouraging reading. Professional services firm KPMG found that by the end of March 2016 400 full time equivalent employees, not directly employed by SSE, will have received a pay rise – in 2014/15, this was worth on average £1,030 a year.
This number is expected to double to 800 full time employees by 2020 thanks to being part of a Living Wage accredited supply chain. That number reflects the fact that we have some pre-existing contracts in place which were signed before our Living Wage accreditation came through in April 2014.
Some people might say that the UK Government is doing enough on this issue already by increasing the minimum wage but it’s not quite as simple as that. The new National Minimum Wage rate, while clearly better, does not meet the important Living Wage rate that is guided by the ‘Minimum Income Standard’.
That means it is still possible that someone on the new minimum wage will be in poverty. The Living Wage rate is better and for those of us who can, we should continue to make a difference to the lives of our employees by paying the Living Wage, and implementing it through, in SSE’s case, a substantial supply chain too.
In a healthy flourishing economy, there should always be room for progressive firms to reach for higher standards and to try to differentiate themselves in their markets on the basis of enhanced social or environmental commitments. In SSE’s case that’s exactly what we want to do.
So as we enter Living Wage week itself I hope that CEOs of other companies, whether they are of SSE’s size and scale or not, will pause to consider whether this is something they might consider themselves.
We know the Living Wage makes a real difference to pay packets and consequently to people’s quality of life. In our supply chain that difference is worth a fraction over £1,000 a year. That’s why SSE will continue to champion the Living Wage and we will remain firmly part of the Living Wage movement in the months and years to come.