industry news SME profile Thursday 20 Jun 2019 @ 11:35 Doing the Right Thing - Tim Deeker-Harris outlines the aims and the benefits of the Living Wage
Tim Deeker-Harris of Prime Clean Limited outlines the aims and benefits of the Living Wage
The Living Wage was founded by Citizens UK as far back as 2001 during a meeting that took place in East London, when the grassroots organisation, Citizens UK, brought together churches, mosques, schools and other local institutions to talk about the issues affecting their communities. Low wages compared to high living costs became the dominant theme and the slogan “A fair day’s work deserves a fair day’s pay” was created. The statutory minimum wage at the time was just £3.70 per hour resulting in many people having to work two or three jobs whilst still struggling to cope with the living costs and supporting their families, particularly in London where the costs for child care and living accommodation is that much higher than the rest of the UK.
The movement quickly gathered support across political parties and businesses alike. The campaign arranged rallies and various charity events to increase its awareness within the community in order to gain further support at a grassroot level. In 2003 the first official London Living Wage (LLW) was announced, £6.40ph (42% above the Minimum Wage).
During a large public assembly in 2004 the movement managed to gain the support of the then, Mayor of London, to further champion the LLW across the Capital. Such public support added greater awareness across both public and private business sectors. Major events, such as the London 2012 Olympics, agreed to support the Living Wage which in turn helped to gain further momentum.
Now, in 2019 The Living Wage has become widespread across many industries and the understanding of its benefits are far better appreciated. However, that’s not to say it has become the norm, yet its growth over the years would suggest it will become even greater established within the years to come.
Interestingly, within London, there are certain areas that seem to have adopted the LLW quicker than others. For example, within the City and Canary Wharf whereby many large financial institutions have their Head Offices, the majority of these businesses have adopted the LLW. This is potentially down to the size of their budgets but also because many of these businesses see it as “the right thing to do”. Furthermore, it may also form part of their Corporate Social Responsibility agenda that is declared to shareholders and stakeholders, alike.
The West End tends to be made up of SME businesses whereby their budgets maybe further constrained, would appear to be two or three years behind that of the City in terms of take-up of the LLW.
Herein lies one of the crucial aspects to the ongoing success and uptake of the LLW, education. Quite often I will attend meetings with potential new clients and explain that, we as a business, will always look to support the LLW assuming the client is happy with the commercial impact on costs that it will have. Within the City, more often than not, the client will already have supported this wage or will be in favour of moving towards it. Whereas, in areas such as the West End, many businesses may have little understanding of the LLW and the benefits that it can bring. At this stage it is down to the service provider to explain and educate the client on its potential benefits in order to justify its increase on their bottom-line costs.
The key benefits include;
- Greater staff retention
- Lower absenteeism
- Morally & Ethically correct
Such benefits can be critical when delivering a consistent service, as a major challenge can evolve if there is a regular turnover of staff.
Certain clients will always be constrained by budgets no matter how great the potential impact the LLW would be. However, even if at that particular time they may not be able to support the cost increase of moving to the LLW, it would then be on their radar for the future.
Dare I use the word Brexit, but when it comes to the employment of what many deem “unskilled labour” within the UK, its hard to avoid the topic, so here we go. Although the current impact of Brexit has not been fully felt within the cleaning industry, we have certainly noticed a reduction in available labour. One of the major draws to working in the UK is the increased wages that people can earn compared with their home country. With this in mind, my view is that the Living Wage will become even more crucial as we move forward when it comes to retaining staff, but also being seen as an employer of choice in a restricted labour pool.
Like with everything in life there will always be drawbacks and the LLW is no different. One of the theoretical positives, being able to attract a higher standard of Cleaning Operative, is reducing as the LLW starts to become more common place as many major organisations adopt the principle of paying the LLW. A few years ago, you could attract a more experienced cleaner through paying the Living Wage, however cleaners are now almost expecting the LLW through working in the City which leads into, in my opinion, the biggest challenge posed by the Living Wage, the % increase per year.
For many years now clients have supported the annual uplift. This has meant that cleaners almost become reliant on such an increase. The challenge is that the increase is often higher than inflation, for example in 2017 the LLW saw a 4.6% increase, which is fine in a buoyant market but with external pressures such as Brexit many organisations are having to re-look at operational budgets. As a result, clients may no longer be able to support the % increase each year and service partners may have to come up with other ways to support the uplift in order to remain a Living Wage employer. In this scenario many service providers would have to reduce labour so that the uplift could be applied. This in turn brings operational challenges and may result in service levels being potentially compromised.
Overall the LLW is a huge benefit within our industry and has ensured Cleaning Operatives are paid a fair rate factoring in the costs of the capital. To put into perspective, currently a full time cleaner would earn close to £22,000 per year which is not too far behind that received by many graduates after leaving University. We as a business will continue to support and promote its cause and hope to see an even greater client up take through the coming years.