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John Lewis boss flags living wage fears

John Lewis could be forced to make changes to staff benefits in order to pay for the national living wage, managing director Andy Street has said.

The department store chain is known for its annual bonus payout, worth up to a fifth of annual pay and a gold-plated pension.

However, speaking at the opening of the new Grand Central store in Birmingham, Street raised concerns about the impact the pay increase would have on the way it rewards staff, according to the Guardian.

“We have got a pay policy that has served us very well, it is what drives our outstanding performance from selling partners on the floor,” he said. “Suddenly that is going to change. There are some big issues for us to work through.

“If like us you have got a rich benefit scheme with pensions and bonus – we are paying 15% of our payroll for pensions, 15% for business – it is obviously quite challenging.

“So I think one of the things I am a little concerned about is that it moves to concentrating on base pay when actually the total reward, and all the richness of that benefit, has distinguished us over time. It is interesting how it will play out with different companies.”

He added: “What it might lead to is us saying a greater proportion of our rewards to partners goes into base pay other than total benefits. That is up for debate.”

Street said the retailer had not “made any decision yet at all” about how it would adapt to the national living wage, but ruled out cutting the bonus scheme entirely.

Readers' comments (3)

  • I suspect that the JL pay and benefits package will have to reform, in some ways this could become a positive with a greater share of the business reward becoming focused upon the engine room, where the sales and service performance of the Partnership is achieved

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  • If the majority of employers had the same attitude as JLP this problem would not be so relevant. I would remind people this is "A LIVING WAGE"
    Its not to say there are not unhappy people in JLP especially the Waitrose staff!

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  • This is a massive issue for JL. The large bonus is a motivator to give great service. Reducing this means less drive. It's human nature.

    Will make them just another retailer.

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