5 Insights From Companies That Implement Living Wages

Paying a Living Wage is quickly becoming important for businesses around the world. More and more companies are discovering that paying fair wages isn't just about following the rules, but about long-term sustainability. This article shares vital lessons from global companies like Schijvens Corporate Fashion, Electrolux, Siemens and Canva but also from Invest International, an impact investor that supports Dutch businesses and partner governments.

1. Just start implementing Living Wages

There are still companies that hesitate to take action on Living Wages, waiting for 'perfect' data or the right timing. Schijvens Corporate Fashion has very clear advice for companies that have not started the Living Wage onboarding yet: “Just start. Perfect data doesn’t exist—conditions change constantly. Instead of delaying action, we at Schijvens adapt to existing systems. No approach is perfect, but doing nothing is not an option. Whether wages are precisely at the ideal level or slightly above or below, what matters is ensuring that workers earn a fair salary”, says Jaap Rijnsdorp, CEO of Schijvens Corporate Fashion.

2. Include a pilot phase or Test Runs

It’s understandable - and normal - not to have all the answers when thinking about implementing Living Wages. The experience of the WageIndicator team who has been guiding companies with their implementation for many years, is that these answers will come along the way. And when in doubt, the best thing you can do is start with a pilot phase or some test runs. Karolin Bagge, Director Total Rewards Europe at Electrolux: “The pilot phase was crucial for us. We were used to working with market data, but not through the lens of the Living Wage framework provided by WageIndicator. So, it was a significant learning experience. The results of the pilot were very encouraging and led us to the next step: expanding to over 230 locations in more than 55 countries globally.”

“We’ve seen that test runs are important to identify areas where additional country data or clarification from WageIndicator would help advance our analysis. We’ve found WageIndicator to be a great partner with solid research, consistent reporting, and coverage of all but two of the countries where we operate”, says Susan Brown, Senior Director Compensation at Siemens.

3. Develop a realistic and flexible plan on how to close the gap

Once you have compared the applicable Minimum Wage with one of the Living Wages, you might notice you have a gap between Minimum Wage and the Living Wage. “When we initially assessed wages, we found a small number of employees below the Living Wage benchmark. Addressing this was a priority, and we quickly took steps to ensure everyone met or exceeded the living wage. Since then, we’ve implemented a regular process to review wages every six months to ensure we continue meeting our Living Wage commitments across all regions. Some say implementing a Living Wage is difficult, while others adjust Minimum Wages frequently without issue. For us, it wasn’t difficult because we approached it with the mindset of making it a priority”, says Troy Garett, Compensation Specialist at Canva.

So when you notice a gap between your applicable Minimum Wage and the Living Wage estimate, the most important thing is to develop a realistic plan on how to close this gap. Rogier Eijkens, Coordinator of Impact Measurement and Monitoring and Evaluation at Invest International says: “For us as investors it’s important that the jobs we support through our financing are decent jobs. With decent working conditions, workplace safety, and good remuneration. So Living Wage became one of the core targets within our SDG 8 impact framework. All our clients are encouraged to demonstrate their best efforts towards achieving Living Wages standards and to develop actionable roadmaps where gaps exist. Typically, the roadmaps we see aim for a 2 to 5-year horizon. Five years is in most cases the maximum time we allow for closing the Living Wage gap.”

4. Repeat the same process every year

Having the same process year after year gives the company structure and insights into how compliant your company is on paying Minimum Wages or where you stand with the implementation of the Living Wages. Susan Brown, Senior Director Compensation at Siemens: “Documenting our process is important to ensure our approach is repeatable year after year. Our colleagues in the Shared Services organisation have been fantastic in defining all the steps and formulas we follow, and in identifying where we automate and where manual input is required. Repeatability is a key aspect for a company of Siemens’ scale; ensuring consistency, auditability, and long-term sustainability to keep us on the strong path we’re on.”

5. Put tracking metrics in place on how Living Wages improved the business

Implementing Living Wages is more than a philanthropic objective; it’s also just good business management. So make sure you set up the correct metrics to showcase these business performance improvements; both quantitative as qualitative. “While I can’t provide direct evidence through financial metrics like revenue or profit margins, qualitative observations indicate that companies adopting Living Wage standards, alongside decent working conditions, tend to be better organised. There’s typically lower staff turnover and stronger operational stability. Particularly in the SME and startup segment, we observe that businesses practicing decent work principles - including Living Wages - tend to function better overall”, says Rogier Eijkens, Coordinator of Impact Measurement and Monitoring and Evaluation at Invest International.

References company case studies:

• Schijvens Corporate Fashion
• Electrolux
• Siemens
• Invest International
• Canva