Why is Lidl Offering the Living Wage?

Posted by: Jannike Post Date: 27th September 2015

From October, Lidl will become the first supermarket in the UK to pay its staff the Living Wage. It will pay a minimum of £8.20, with an average wage increase of £1,200 a year for those affected. This will cost Lidl £9 million a year, which it should be able to shoulder comfortably after a turnover of more than £4 billion last year.

The wage increase, which Lidl expects to be in line with the National Living Wage Foundation’s recommended rate announcement in November, will apply across England, Scotland and Wales.

So, why is Lidl making this move?

Success through publicity

Why is Lidl Offering the Living Wage?

You might think it’s simply a PR stunt that will set the supermarket apart from its rivals as a more compassionate employer. Indeed, public reaction is already proving the success of this tactic, with Twitter inundated with promises of new business.

Lidl tweet 1

Alongside this, public figures are singing the supermarket’s praises, and shaming those not following suit, thrusting Lidl’s reputation further ahead of those of its competitors.

Lidl tweet 2

Success from within

But enhancing its reputation is only one of the rewards Lidl will reap from its new Living Wage. Another huge result the supermarket can expect to see is increased staff engagement.

We spoke to staff members in a Nottinghamshire branch of Lidl about their thoughts on the new Living Wage. Branch manager Wayne said that he expects to see higher motivation among the staff working in his branch, telling us that “it’s a positive thing for all our employees”, and that “money drives a lot of people”. He added, though, that “it only affects a certain number of them, as most of them are on quite a good wage anyway”.

We also spoke to Customer Assistant Amir, who told us that “they pay well”, so it doesn’t have a direct impact on him. He explained, however, that it will affect store assistants “lower down in the chain”, and this will have a “knock-on effect” on staff on higher wages. So, even those not directly affected by the new Living Wage could see a salary increase because of it.

There seems to be a general feeling of being well-compensated among in-store staff, even before the Living Wage. In fact, Lidl is already paying its staff a minimum wage of £7.30 per hour, higher than the National Living Wage of £7.20 set out in George Osborne’s July Budget, and to be enforced from April 2016. The National Living Wage will also only apply to those over 25, with Lidl’s new wage benefiting all age brackets.

47% of Lidl’s workforce is already earning too much to be directly affected, so paying its staff well isn’t a new tactic. It seems that, unlike the big four, who are struggling to keep up with the German supermarket’s success, Lidl has recognised the value of truly engaging its staff through a system of fair reward.

Ronny Gottschlich, Lidl UK CEO, explained some of the reasoning behind the new Living Wage: “We recognise that every employee forms an integral part of team Lidl, and each individual’s contribution is valued. It’s therefore only right that we show our commitment, in the same way that the team commit to the business and our customers each and every day”.

With Lidl soaring ahead of its competitors, perhaps it’s time for others to recognise the value of motivating staff to do their best, not with gimmicks like free eye tests and restaurant vouchers, but through proper recognition for every hour worked.

Properly engaging and motivating employees is covered in depth on our CMI approved leadership and management programmes. To find out more, get in touch below.

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