Before considering BrewDog HQ's recent announcement about the change to their wages strategy, there are two key terms to understand and distinguish:

National Living Wage

This is an hourly wage level set by the government each year, which applies equally across the UK. Currently set at £10.42, it is due to increase to £11.44 in April 2024. The National Living Wage is generally equal to the National Minimum Wage for people aged 23+ years in the UK (with those aged below 23 years having variable lower rates of National Minimum Wage as determined by their age). There is no obligation on employers to pay the National Living Wage to all employees; instead, the legal obligation is for employers to pay at least the applicable National Minimum Wage to all employees.

“Real” Living Wage

This is a rate determined by the Living Wage Foundation. It has regional variation, with the current hourly rates being £13.15 in London and £12 for the rest of the UK. The Living Wage Foundation describes its chosen rate as “The only UK wage rate based on living costs” and arrives at the figure by analysing a “basket” of goods (which this year saw, amongst other changes, alco-pops and digital cameras thrown out and frozen berries and e-bikes put in) and other cost of living factors, such as rent prices. There is no obligation on employers to pay their employees the real living wage, but those that do so can publicise their accreditation.

What have BrewDog done?

Until 3rd January 2024, BrewDog paid their staff the Real Living Wage, but they have now taken the decision to pay their new recruits the National Living Wage instead (although there will be no reduction in wages for existing staff). Such change was made known to staff by letter, the contents of which have been made public.

The ramifications for new employees include an absence of regional variation in wage levels and an overall reduction in the rate of pay on offer. 

BrewDog close their letter to staff announcing the change by pointing to the overall benefits package that they offer. This is reflective of the general mood in the employment and HR world, with those who are newer to the workforce (looking at you, Gen-Z) placing greater value on the overall benefits package on offer and how a chosen employer can complement employees' existing lifestyles, rather than having a job to simply pay the bills. This marks a shift of focus to the overall employment package (which, historically, has been a far more prominent concern for senior level employees) and is an important change of which employers should be aware.

BrewDog's move might also help us to re-asses our economic barometers. Might the lower wage offering signal more business hardship (certainly that is what BrewDog point to in their letter)? Or, could it actually show a strengthening job market, with employers no longer grappling to attract the top talent?