The Co-operative Group is increasing pay for new starters in its food stores by 1.8%.
The increase follows a two-year pay deal agreed in 2015 that will see 40,000 employees working in frontline positions in its food business receive a pay rise of 8.5% by October 2016.
The increases take pay levels above those of the government’s £7.20 an hour national living wage, which came into force this month for staff aged 25 and over.
According to the organisation’s Annual results 2015 report, 85% of staff took part in its annual employee engagement survey, Talkback, in 2015. The 13th annual survey found that employee engagement levels increased to 73% in 2015, 6% higher than in 2014.
In addition, 100 employees have taken up the Co-operative’s rental deposit scheme benefit since its introduction last year. This initiative provides employees with an interest-free loan to pay for a deposit when they move into a privately rented home.
The Co-op, which employs around 70,000 members of staff, moved all of its employees into a defined contribution (DC) pension scheme in 2015.
The organisation also increased its employer contribution rate from a maximum of 8% of base salary to 10%. In line with this, the executive pension benefit allowance has decreased from 16% of base salary to 10%.
Following consultation with staff and unions, the Co-operative’s defined benefit (DB) pension scheme, Pace Complete, has now closed to future accrual.
Stevie Spring, chair of the remuneration committee at the Co-operative Group, said: “An important change for the Co-op in 2016 will be a further increase in hourly pay rates for our colleagues in the frontline of our business, serving customers in our stores.
“As the result of a two-year pay deal last October, I am pleased to say that the majority of our colleagues are already paid above the new national living wage coming into effect in April 2016. All colleagues who are not yet paid at this rate will have their pay increased to it in April. The standard rate for new starters in our food stores will also be increased by 1.8% then.”