How many cleaning companies in London pay a living wage?
It is notorious that business cleaning is one of the sectors with the highest incidence of low pay.
In April 2016 the government introduced a higher minimum wage rate for all staff over 25 years of age. However, the government’s ‘national living wage’ is not calculated according to what employees and their families need to live. Instead, it is based on a target to reach 60% of median earnings by 2020. Under current forecasts this means a rise to less than £9 per hour by 2020.
For under 25s, the minimum wage rates also take into account affordability for employers.
At the end of 2018 London Mayor Sadiq Khan has announced a 35p increase in the London Living Wage from £10.20 per hour to £10.55 – which amounts to a 3.4% rise.
As of today more than 5,000 employers are paying at least the Real Living Wage in the UK, including some 1,500 in the capital – this according to a recent survey of the Living Wage Foundation.
Living Wage Foundation says that this has lifted more than 10,000 families out of poverty.
What is the difference between the Minimum Wage, the National/London Living Wage and the Real Living Wage?
The Minimum Wage and the Real Living Wage are two very different rates of pay. Some UK based businesses confuse them. In terms of value, there’s a huge difference.
The National Minimum Wage (NMW) is the minimum pay per hour workers of school leaving age (16) are entitled to by law. Until recently, all ages were submitted to the NMW, but now, dependent on the age category the worker fits into, will depend on the variant of their hourly salary. The older the worker, the more they’re entitled to earn per hour.
The age categories are shown below – these are 2019 NMW hourly rates:
- Apprentice; £3.90 per hour
- Under 18; £4.35 per hour
- 18 to 20; £6.15 per hour
- 21 – 24; £7.70 per hour
In 2016, the government introduced a higher minimum wage rate for all staff over 25 years or over, to assist in bridging the gap between the Minimum Wage and the amount people need to live on, they named it the National Living Wage.
This new hourly rate set by the government for over 25s currently stands at £8.21. The rate will continue to rise each year until 2020 when it achieves the government’s £9 per hour target.
The Real Living Wage, described by the Living Wage Foundation, shouldn’t be confused with the government’s statutory Minimum Wage or National Living Wage. This rate is voluntary and requires paying a higher sum of money to employees.
The Real Living Wage (which is described above) is currently set to £9.00 across the UK, and £10.55 across the entirety of London (including all boroughs of Greater London). It is voluntarily paid by over 5,000 UK businesses who believe that their staff deserve a fair day’s pay for a hard day’s work.
Why pay the Real Living Wage?
As well as being good for society, there are significant business benefits to paying the real Living Wage.
In 2017, the Living Wage Foundation promoted a survey of more than 800 accredited real Living Wage businesses, ranging from SME’s to FTSE 100 companies and found that 93% reported they had gained as a business after paying their staff the living wage.
The research – which was promoted in collaboration with the Cardiff Business School – found that 86% of respondents reported that Living Wage accreditation had enhanced their organisation’s general reputation as an employer. Over half of employers reported that the Living Wage had improved both recruitment and retention; whilst 76% of large organisations (those employing over 500 people) that responded, reported improved retention of employees receiving the Living Wage. 78% of large employers also reported that following accreditation staff motivation was increased.
In a nutshell, paying the living wage and being accredited for it has:
- enhanced the organisation’s reputation as an employer 86%
- differentiated the organisation from others in the same industry 64%
- improved relations between staff and managers 58%
- increased commitment and motivation of Living Wage employees 57%
- improved recruitment of employees into jobs covered by the Living Wage 53%
On the opposite, it has not:
- increased the organisation’s bill for subcontracted services 68%
- made it more difficult to win contracts from clients as costs are higher 87%
- led to difficulty in recruiting to team leader or supervisory positions 81%
Where do we stand?
GreenZone has been a Real Living Wage Recognised Service Provider since 2013. We are extremely proud that we were one of the first Recognised Service Providers of the Living Wage Foundation. With our ethos of staff engagement, enhanced training, career mapping and paying enhanced wage rates the Foundation was the perfect partner for us. We endeavour to be an employer of choice inspiring all our clients to be a catalyst for change within a notoriously low paying sector, the cleaning industry.
GreenZone recognises that our staff are our greatest asset, we seek to empower them to be talented ambassadors of our brand. By paying all our headquarter and core staff the real Living Wage, and through a process of incentivising, our staff remain highly motivated. GreenZone promotes cleaning as a positive career choice for talented hard-working people and benefits from the highest staff retention rates of 98% within our industry. It is the quality of our staff and their enthusiasm, pride and commitment to our business that singles out GreenZone in the marketplace.
It is important to GreenZone that we have strived extremely hard to work with all our existing and new clients to explore ways of self-funding the introduction of the real Living Wage into our businesses. From our perspective, paying the real Living Wage is good for business, good for the individual and good for society. The net effect we have seen is increased productivity, reduced absenteeism, better recruitment/retention, improved quality of work and increased ethical awareness.
We are proud to currently hold 74 Living Wage client contracts and challenge ourselves to steadily increase this amount every month, empowered by hearing such positive comments from our employees.