Small firms paying voluntary living wage 'boosted productivity'

Small firms paying the voluntary living wage enjoy increased productivity and fewer employee disputes, a study has found.

Research by Middlesex University London and Liverpool University showed that three out of four small businesses saw a positive effect on their reputation by paying the voluntary rate, which is higher than the official national living wage.

A survey of 60 organisations showed that most believed paying the rate had improved relations between managers and other employees.

Katherine Chapman, director of the Living Wage Foundation, said: "The report shows yet again that paying the real living wage, which goes beyond the statutory minimum, not only ensures that people earn enough to meet their costs of living but brings real business benefits for small employers through improved productivity and staff retention."

:: The voluntary figure is £9.40 an hour in London and £8.25 in the rest of the UK, compared to the official rate of £7.20 for adults.