With the United Kingdom facing a soaring cost of living and inflation rates approaching double figures, keeping up with price increases in energy, food and fuel bill is becoming more and more difficult for many of the UK’s lowest-paid workers.
Analysis from the Living Wage Foundation found that workers paid the National Living Wage would need almost an extra £800 to meet the current cost of living. This difference could pay for three months (13 weeks) of food bills or ten weeks of housing costs, according to national averages.
A worker living in London and being paid the government’s National Living Wage, however, would need to find more than £3,000 extra to bring their income in line with the London Living Wage. This difference represents nearly a year (43 weeks) of food bills, or 5 months (22 weeks) of housing costs. (Living Wage Foundation).
This extra income would provide workers with a real Living Wage and could help ease the pinch of the current cost of living.
What is the real Living Wage and why pay it?
The real Living Wage is the only UK wage rate based on the actual cost of living. The Living Wage rates are calculated annually using a robust methodology and take into account the cost of housing, food, travel and other essentials. The rate is currently £9.90 in the UK and a higher rate of £11.05 to reflect the higher cost of living in London.
New real Living Wage rates are usually announced annually in November, however, in response to the cost-of-living crisis, the Living Wage Foundation will be bringing its new 2022-23 rate announcement forward to September.
As well as being the right thing to do, paying the real Living Wage has been proven to have business benefits such as improved staff wellbeing and engagement, higher rates of productivity, and even better recruitment and retention. (TWINFM). With the current shortage of workers in the UK, paying the real Living Wage could secure staff loyalty and provide a lifeline to many businesses.
The FM Industry and the Real Living Wage
The UK’s outsourcing and Facilities Management (FM) sectors are two of the country’s most important industries, employing one in ten of all UK workers, and accounting for around 7% of the UK’s GDP. (Living Wage Foundation). Despite this, the FM industry has some of the highest levels of low pay, with around 70% of cleaners currently earning below the real Living Wage.
However, FM is often outsourced to third-party service providers, meaning pay is heavily influenced by the client rather than the service provider.
It is for this reason that the Living Wage foundation works with Recognised Service Providers, such as Andron Facilities Management, to champion the Living Wage, one contract at a time.
Andron Facilities Management – A recognised service provider
Andron FM is proud to be a Recognised Service Provider working with the Living Wage Foundation to promote the real Living Wage. This means we commit to paying all directly employed staff members, not tied to client contracts, the real Living Wage rate.
Additionally, we always offer a real Living Wage bid alongside every market rate submittal to all prospective and current clients. This means our clients always have the choice to implement the real Living Wage at the point of tender. If this is not feasible, however, we work together on a “Living Wage Journey” to introduce the real Living Wage over a longer period of time.
As it stands, Andron currently pays 53% of our 2100-strong workforce the real Living Wage – a huge 35% increase since we obtained recognised service provider status just over 2 years ago, and at the time of writing, 61% of our contracts are now paying the real living wage.
By promoting the benefits of the real Living Wage amongst our client base, website, and social media, we were able to influence our two biggest clients to pay all staff employed on the contract the real Living Wage in 2021, with approximately 750 staff benefiting. Within London, we also pay all our staff the London Living Wage, with many earning a higher rate.
This higher rate of pay has had huge benefits for many of our staff, including one of our Cleaning Operatives, Billy Gardener:
“The real Living Wage gives me that extra level of safety that I didn’t have with the minimum wage. It makes paying the bills a lot easier and takes a huge amount of stress off my family”.
As more of our clients commit to paying our employees the living wage in 2022, we are confident that we can continue to pay more of our employees a fair wage to meet the rising living costs in the UK.