Cleaning Sector Divided By National Living Wage

The National Living Wage, which was announced by the Government in last summer’s budget, comes into effect today, replacing the National Minimum Wage for all working people aged 25 and over.

As of today (April 1st), the minimum pay rate will rise by 50p and workers will be eligible for no less than £7.20 per hour. Government figures suggest that pay packets could increase by up to £900 a year, seeing more than a million workers benefit from the scheme. However, the Regulatory Policy Committee believes that companies could face additional employee costs of up to £804.4million.

The move has further led to divided opinions within the cleaning industry. Criticised for its varied impact across the country, with a mere 3% of employees in London likely to see an increase in wages according to the Resolution Foundation’s research, there are fears that many cleaners and domestic staff could lose their jobs or see working hours reduced as employers attempt to cutback due to the added cost.

While a government survey showed that 59% of workers will become motivated to work as a result of pay increases, the Close Brothers Business Barometer suggests that 50% of business owners and managers believe the National Living Wage will result in a rise in productivity.

The survey added that 18% of managers stated that they did not yet have a solution to fund additional costs, and while 6% viewed funding as a solution, the majority (51%) revealed reducing costs in other areas was their primary target.

Salary costs will inevitably rise for cleaning employers following the introduction of the National Living Wage (NLW), yet the Living Wage Foundation believe that accredited employers benefit from these policies, with their own clients already viewing the Living Wage scheme as a positive.

The foundation, responsible for calculating an annual Living Wage for the UK and London to reflect the basic cost of living, offer employers the opportunity to voluntarily pay the wage and receive accreditation, and has been adopted by companies in the cleaning industry such as ISS FS Ltd and CAM Specialist Support in recent years.

Matt Johnson, Director at CAM, a London Living Wage employer, said: “Paying the London Living Wage has enhanced the way we view ourselves as a company, and the way we are viewed by existing and potential customers. Our initial fear that we would need to reduce our staff levels to cope with the costs has proved unfounded thanks to the extra business we’ve been able to secure.”

NuServe, a Contract Office Cleaning company, reinforce the belief that both cleaners and clients will benefit from the changes. They state that 52% of staff at companies who had introduced the living wage felt a greater sense of loyalty to their employer, which in turn could result in as much as a 25% staff retention benefit in turnover rates and employee absence levels.  

Words by Ben Thomas