Employers who pay the Living Wage -- payment required to meaningfully participate in society -- help to create a 'feel good factor' in the workplace resulting in increased productivity, says new research.
Reduced absenteeism, reduced staff turnover and an enhanced company reputation have also been outlined as potential benefits in the study, which was carried out by the Loughborough University and Ipsos MORI, a leading market research company in England, on behalf of the Scottish Government.
Living Wage is based on the University's detailed research into the types of goods and services members of the public think are needed to reach a socially acceptable standard of living.
The Scottish government has committed to paying the Living Wage as part of its public sector pay policy.
"Our research on what households need for a minimum living standard has been used to set the UK Living Wage, which is being adopted by employers all over the country," co-author of the report Donald Hirsch from Loughborough University said.