Wage 0

The Living Wage Challenge

Recent news stories have highlighted the multi-sector impact of the current labour shortage created by the perfect storm of Covid 19 and Brexit. But beyond this immediate crisis there is another – more important – living wage crisis.

For the last 20 years, the Living Wage Foundation has worked to promote paying workers across all sectors a wage that enables them to have an appropriate standard of living.

This subject impacts workers across the FM sector as much as any, and is forcing business leaders and clients to ask a difficult question – is now the time to face up to the living wage challenge?

What is the living wage:

The real Living Wage is the only UK wage rate that is voluntarily paid by over 7,000 UK businesses who believe their staff deserve a wage which meets everyday needs - like the weekly shop, or a surprise trip to the dentist. The FM sector is very under-represented amongst the 7,000 companies who are currently signed up.

The current legislative Minimum Wage for over-23’s is £8.91ph, whilst the calculated Living Wage is £9.50ph nationally and £10.85ph in London.

Why pay the living wage:

Other than it being “the right thing to do” from a social value perspective….

  • 86% of companies say it has improved the reputation of their business
  • 75% say it has increased motivation and retention of employees
  • 64% say it has helped to differentiate themselves from other competitors/sector in a competitive employment market
  • 58% say it has improved relationships between staff, management, and suppliers

What about zero-hour contract?

There is a strong argument that tackling zero hours contracts will have more impact on standards of living than aggressively pursuing progressively higher percentage increases in the legislative Minimum Wage.

However the solution is probably more nuanced, with a combination of assured contract hours being combined with sustainable pay increases for the lowest paid in society.

Whatever the outcome, it is clear that there is no magic money tree – especially in a post-Covid/Brexit economy – to pay for unsustainable pay increases. As such it is important for FM providers to work collaboratively with clients to create a realistic and achievable roadmap to closing the living wage gap. In this way we can progressively manage labour demands, improve service for end users, whilst also conducting business in a manner that benefits all.