Why do managers of small and medium-sized businesses seek voluntary Living Wage accreditation? – an exploration of choice rationales

ABSTRACT

This article explores empirically the choice rationales for voluntary adoption of the Living Wage (LW) by managers of small and medium-sized enterprises (SMEs) in the UK. Framed analytically by related concerns within the fields of employment relations/HRM in SMEs, business ethics and signalling, interviews with owners/directors from 23 SMEs identified a four-fold typology of choice rationales for the LW as: an expression of care for employees, the basis for a high quality service business model, a marker of corporate social responsibility, and a signal to challenge the practice of other economic actors. Opportunities and barriers for voluntary adoption of the LW in SMEs are considered, in addition to their economic effects. The practical implications for LW movements and SME managers are drawn out, and avenues for further research identified.

KEYWORDS:

• Living Wage
• small and medium-sized enterprises
• choice rationales
• accreditation
• strategy
• ethics

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. One official classification criterion for enterprises is number of employees. The UK Government classes businesses as SMEs if they have 0-249 employees, with a further distinction between non-employing businesses, micro-enterprises (1-9 employees), small enterprises (10-49) and medium-sized enterprises (50-249) (DBEIS, 2019). An exact definition of what constitutes an SME, however, remains difficult, especially in view of sector differences (Curran & Blackburn, 2001, pp. 8-14). Inclusion of micro enterprises in the present study is justified because the UK Government definition allows inclusion of these companies within the SME category, they constitute the second largest SME category (after non-employing businesses), and also close to 40% of accredited SMEs are micro-businesses.

2. These three categories were established by the LWF for their database.

3. In the following all quote numbers refer to the illustrative quotes listed in Appendix A.