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How Can Facilities Management and Security Services Mediate Between a Fair Living Wage and Financial Viability?

13.10.2022

With the recent 10.1% increase to the Real Living Wage (livingwage.org), many front-line facilities management and security services workers are set to receive improved salary rates. This offers a vital lifeline as the cost of living continues to rise. Personnel, including cleaners and security officers, though are amongst the lowest paid, are essential in keeping public and private services running. And it’s not too long ago that they played a critical part as key workers in the pandemic.

Many facilities management and security services businesses are implementing the Real Living Wage, a slightly higher voluntary rate than the government’s base legal requirements: the Minimum Wage or the National Living Wage (depending on age brackets). Many are keen to combat the perception of facilities management and security services as a low-wage sector and help put a stop to in-work poverty.

However, with the industry’s high running costs, as well as residual effects of Brexit and COVID-19, some companies have real concerns about their bottom line. It’s a two-sided problem in which mutual benefit must be reached for a productive workforce as well as business success.

 

What is the Real Living Wage?

 

UK wage thresholds are divided into three categories:

 

  • The Minimum Wage: currently set at £9.18 per hour and is a minimum legal requirement for those under 23s. It’s set based on recommendations from businesses and unions. It doesn’t differentiate London living costs from the rest of the UK.

 

  • The National Living Wage: currently £9.50 per hour and is the minimum legal requirement for those over 23s. This is based on a percentage of medium earnings and aims to reach a 66% median by 2024. It also doesn’t differentiate London living costs from the rest of the UK.

 

  • The Real Living Wage: currently £11.95 per hour for London and £10.90 per hour for the rest of the UK. This is a suggested rate for all over 18s. It’s independently calculated by the Living Wage Foundation based on essential household goods and services.

 

What impact will the new Real Living Wage have on businesses?

 

The IWFM (Institute of Workplace and Facilities Management) released a Guidance Note for the industry in conjunction with the Living Wage Foundation. They are urging more facilities management and security services companies to become accredited Living Wage Employers.

 

“IWFM CEO Linda Hausmanis, urges that “it is only right that people are paid a fair wage for a day’s work”.

 

For some companies, however, it isn’t as easy as simply ‘doing the right thing’. Facing severe skill shortages and losses after Brexit and COVID-19, many are on reduced budgets as it is. As well as this, running costs for the industry remain high, with licences and renewals, essential equipment, and rising energy costs. Without support, some companies fear going under.

 

The Business Case for Real Living Wage

 

As well as presenting it as a moral duty, IWFM also outlines the business case for the Real Living Wage. Whilst the past few years have been gruelling on businesses, IWFM suggests a higher wage may help ease the struggle for companies and workers alike. They cite better recruitment and retention, staff well-being, improved productivity, and social value as key incentives for paying a fairer wage. By paying out a little more, companies can see higher returns with better quality work and lower staff turnover.

A 2017 study by the Cardiff Business School even proves the Real Living Wage’s potential for businesses looking to get ahead. In surveying a sample of accredited Living Wage Employers, they found that:

 

Moving Forwards

 

Whilst budgets, contracts and supply chains may need reconfiguring, IWFM presents a strong case for the Real Living Wage. Now more than ever, companies must find new ways to adapt to a post-COVID and Brexit industry landscape. By paying a fairer wage, companies and workers can become better aligned, exchanging increased productivity for increased well-being. With more employers becoming accredited, a new precedent can be set for the facilities management and security services industry, allowing a plan for long-term success.