Last week the company announced it was adjusting wages for employees between minimum wage and $31.41. It means 82 per cent of employees will be reaping the benefits, the lowest paid receiving the largest raises.
On top of inflation affecting pricing, employing a living wage will cost the company a further $1 million a year. But it’s part of a wider kaupapa to revitalise the sector, CEO Jamie Williams told me over the phone.
“It’s tiring as a sector to be the lowest common denominator. We as larger companies have a responsibility to throw a pole in the ground and say, ‘what do we stand for?’. A living wage is supposed to be a baseline so that people can live a decent life. We have an obligation to lead the way.
“If anything we’re a little late to the party. Ideally we would have done this before the pandemic but after two years of struggling it’s time to rip the bandaid off.”
The company went into the pandemic with 900 part-time, full time, and casual staff and went through a restructure resulting in 25 redundancies, most of which were people involved in the office side of things - be it marketing or people with “big official titles”, he said.
“We realised that at some point we will come out of this and we had to be able to deliver hospitality. What we needed was people on the ground. It was rough for the business.
“The problem with hospitality businesses is that margins are so small. If you lose 10-15 per cent of your revenue, you’re going to burn through cash pretty quickly. When you’re down 25-40 per cent there’s not much you or the Government can do from a Covid-19 resurgence scheme perspective.”
For now, staff shortages take stage over profit margins - whether that’s thanks to the drop in migrant workers, increased sickness rates, and people changing careers in favour of job and health security, Williams said.
“There’s a limited labour pool - if you’re paying living wages, it gives you another tool in the toolkit to attract people. We don’t think it necessarily improves retention but it’s a long game. It means we’re striving for better working conditions, providing training and career development, and offering a set-up where people want to work.
“We don’t want people to come to work and click the ticket. We want staff to thrive. It’s more than a box-ticking exercise for us. We’ve done this for the right reasons.”
But it’s not all peachy - the company has tried and decided against being living wage accredited. According to Living Wage Movement Aotearoa, to become accredited employers must ensure all workers and contractors are paid a living wage and no changes are made to employment conditions or working hours. Employees must also be provided with access to a union.
“We would have to put a lot of pressure on our suppliers and their supply chains to ensure they were paying living wages as well. We just don’t have the capacity to implement something like that and enforce it on other people. It’s not kind of the way we roll.
“We want to do the right thing and hopefully competitors and suppliers will do so too, particularly if we have a successful story off of the back of it in a year’s time if we can say we’ve filled all vacancies and the churn-out rate has dropped.”
The situation is complicated. Some food and hospitality companies - such as Karma Drinks of Karma Cola fame, Little Island ice cream, Wellington’s 1154 Pastoria, Blue Carrot Catering, and Blue Frog cereals have become accredited. But seeing as it’s banana to think some of my beloved flat-white-despite-probably-being-lactose-intolerent baristas mightn’t be on contracts it seems paying a living wage - accredited or not - is a step in the right direction.
