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18 January 2019
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A future with Living Wage

3 November 2014  

Today we’ve found out what the latest Living Wage rate is for both the UK and specifically in London.

This comes at the start of Living Wage week which also serves as an opportunity to encourage more employers to build these rates into their business models to ensure that their employees are receiving fair pay.

The benefits of putting this in place have been published elsewhere (reduction in staff turnover, improved performance etc.) but with just over 5 million employed people paid less than Living Wage it is clear that there is some way to go, particularly when we look at service contracts; but that doesn’t mean that progress hasn’t been made and it doesn’t mean that effort hasn’t been put into this.

I’ve spoken with a number of service providers that say they will always put forward a Living Wage enhanced bid for work alongside one which will pay minimum wage to teams, unfortunately, with the procurement process still so focused on price, we see many clients opting for the cheaper, minimum wage, option. 

It is totally understandable that service providers are taking this approach because the market forces mean that they could lose out on business if they don’t so what can we do to make sure that providers can confidently put forward a single quote based on Living Wage without the fear that they will be undercut by someone paying minimum wage? 

Clearly the procurement process plays a crucial part in all of this. The recent report on pay and work conditions within the cleaning industry from the Equality and Human Rights Committee (EHRC) quite rightly drew concern from those in the sector and beyond. I joined a meeting of the taskforce that is responding to the EHRC report and here we heard about the difficulty in the procurement process essentially squeezing the price so much that if providers were to pay the Living Wage then the small margins that they’re already working within will be wiped out completely.

Like so many things this won’t be solved with a single change. It takes a range of measures from a variety of parties to create a future where Living Wage is the rule in contracts rather than the exception. We need business leaders to take a strong stance to lead from the front in their organisation. We need teams within the organisation to understand the importance, benefit and impact of Living Wage. And we need service providers to work with clients to help sell the benefits of Living Wage which I know already happens.

One other area that I feel needs attention is the perception of service provider staff on the ground; something that was echoed in the EHRC meeting. Too often contracted staff aren’t seen as ‘part of the team’, asked to eat in different parts of the building, not invited out with other teams, not part of the team meetings etc. One senior HR director once told me about how they used to take everyone out at Christmas, including outsourced teams, because they were part of the ‘family’. Perhaps that mentality could help when clients are preparing contracts; when it feels like part of the family it might be a little more difficult to look at the hourly rate as a number and remember the person behind it. 

I think it’s important to note that there is no naivety around this topic. Those that are passionate about this understand that, particularly across vast workforces, the difference between the Living Wage hourly rate and the minimum wage equates to a very significant amount of money but there are cases where the increase in cost in the contract has led to significant savings elsewhere which far outweigh the additional outlay. We need to bring those case studies to life and use them to show the way.

It would be great to set an aspiration for the FM industry to be 100% Living Wage by 2018, for example. However, we can’t do it alone, there are no silver bullets, but I’m confident that we will continue to take positive strides towards this vision each year. 

I hope everyone reading this can get involved in some way to support Living Wage Week whether it’s by signing up to become a Living Wage Employer or Registered Living Wage Service Provider. If you already are could you raise awareness through your own channels about why you support this important movement?

Chris Moriarty, head of insight and corporate affairs, BIFM