The Warehouse Group pledges to pay a ‘living wage’

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The Warehouse Group announced yesterday that it would introduce a ‘career retailer wage’ inspired, in part, by the ‘Living Wage’ campaign. This will make it the first corporate in New Zealand to commit to providing its employees with a ‘living wage’, defined as the income necessary for workers and their families to obtain the basic necessities of life.

The wage will be available to all staff in the three wholly owned Warehouse companies: The Warehouse, Warehouse Stationery, and Noel Leeming. It will increase eligible employees’ pay to $18.50-$20.00 per hour - an extra $50-100 per week on average. To qualify, Warehouse Group employees will have to have three years’ experience and to have completed all the requisite training for their particular role.

The Warehouse currently employees around 7,000 staff and spends about 15% of its $1.1 billion revenue - $169.4 million – on employee expenses, the New Zealand Herald reported. The new wage is expected to cost up to $2.5 million in each of the first two financial years, 2014 and 2015. “[However], the impact on company profits is expected to be less due to increased team engagement, lower team turnover, improved sales and higher productivity,” Mark Powell, group chief executive, said.

“From the point of view of our people, and our business … we really do believe that if your team is engaged, they will serve your customers better, enjoy their job more, be more committed and, therefore, we see that [the wage] as part of the cocktail,” Powell said.

While Powell emphasised that pay was not everything, he said that the ‘career retailer wage’ was part of a wider desire on the part of The Warehouse Group to improve the perception of retail as a career in New Zealand. “I think unfortunately retail has had a fairly negative view in a lot of quarters, and we really want people to look at retail as an exciting career,” Powell said.

The move isn’t, however, revolutionary for The Warehouse Group. As Powell pointed out, The Warehouse has traditionally paid above the minimum wage, aligning that with skills-based training, as part of their ‘people-centred philosophy’.

“We’ve never paid minimum wage, and we’ve always been well above that, but I think the ‘living wage campaign’ earlier this year really acted as a catalyst for us to sit back and say, ‘Hey look, are we doing enough? And should we do more?’,” Powell said. “It really gave us more impetus to say, “Let’s be bold here and let’s do the right thing’.”

  • Dean Brown on 4/10/2014 8:00:44 a.m.

    I stopped shopping from large businesses a long time ago. Since I heard the Warehouse is adopting the Living Wage I have spent hundreds in the stores, and tell my friends to support them as well. If you have any doubts about what you are doing - dispel them. You will gain long term loyalty from customers as well as staff provided you maintain the care of your people.

  • Carl Cheater on 25/10/2013 10:06:35 a.m.

    Well done to The Warehouse Group. The shopfloor employees of Noel Leeming should rejoice this news from their new owner. TWG is clearly a good corporate citizen.

    Unlike Noel's former private equity owners, TWG appears to understand that keeping wages at (or below!) the minimum wage, is counter-intuitive. That is, paying below a living wage most likely increases costs elsewhere.

    Its not often you hear / read of a CEO stating the link between employee engagement and sales and productivity. Very inspiring.

    I wish I was the HR Manager that delivers this great news to the team. Matt you certainly deserve to reap the rewards for sticking with Noels during its dark days. Enjoy.

    Carl Cheater

  • Paul on 18/10/2013 9:20:12 p.m.

    The living wage policy has changed my buying habits.

    I used to shop at the Mega Store (just up the road from me) but they don't pay the living wage.

    I've since switched my shopping to The Warehouse once I heard they pay the living wage

  • Black on 28/07/2013 8:00:49 p.m.

    Don't be so excited. As usual the company makes it look good on the hourly wage.
    They announced the increase the other day, once criteria was met, 3 years and passed appraisal that person will be on base rate of $17.10 (for general roles minus checkouts and specialists), same as a person whose been there 10 years. the $18.50 includes your 6 monthly bonus if achieved. As is from 1 August your pay our pay will be only $17.10.

  • Doug on 8/05/2013 3:26:53 p.m.

    Incredible! Well done The Warehouse!!

  • Flora Gilkison on 8/05/2013 12:12:17 p.m.

    Well done to the Warehouse. One of NZ's growth inhibitors is to accept that we are a low wage economy, this stops employee engagement and does not allow employees lower down on the scale to get very far up on Maslow's hierarchy of needs. Education and training need to be integrated into the work experience and this is all part of the Warehouse philosophy. Employer led rather then government legislation is the way to go.

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