Only two UK construction firms have joined voluntary scheme that sets higher pay rates for workers.
Just two construction firms have signed up to pay their workers the Living Wage, described as the basic level of income needed to make ends meet, it has emerged, writes Stephen Cousins.
Property and construction firm Canary Wharf Group and County Durham-based roofing contractor Hodgson Sayers are accredited under the voluntary campaign, launched by Citizens UK in 2001, which guarantees that firms pay workers a set hourly rate to reflect the cost of living and the basic needs of families.
The scheme offers a more generous alternative to the £6.31 National Minimum Wage, with the current rate for London set at £8.80 per hour, and outside London at £7.65 per hour.
Mike Wade, finance director at Hodgson Sayers, who led the firm’s accreditation, told CM: “The problem in construction is that price is such a huge driver and when a finance director is presented with the chance to offer the Living Wage, the knee-jerk reaction is invariably that it will cost them a fortune. If they were to go away, look at their payroll, and do the maths, they would realise that the financial impact is not very high.”
Canary Wharf Group, which built the Walkie Talkie in London, is one of only two construction firms that have signed up to pay workers the Living Wage
Meanwhile, Citizens UK is in discussion with construction and property organisations as well as sector bodies and trade associations, such as The Building Futures Group, the British Institute of Facilities Management and RICS, to assess the likely impact of adoption on the supply chain. It is also understood that major clients such as Land Securities and British Land are keeping an eye on the situation, following the announcement from Canary Wharf Group in September.
Elizabeth Adams, head of corporate communications at Canary Wharf Group, explained the process of accreditation: “Citizens UK require that you devise an action plan to ensure the London Living Wage is reflected across the business. It’s also necessary to identify when certain contracts are coming up for renewal that need to be adjusted to reflect Living Wage requirements.”
Adams said negotiating the Living Wage requirement with subcontractors was “difficult”, but “staffing costs are not the biggest cost in construction compared to materials, hire of heavy vehicles etc, and it is up to them how they absorb that relatively minor additional cost”.
The Living Wage campaign
- The Living Wage campaign was launched in 2001 by parents in east London, who were frustrated that working two minimum wage jobs left no time for family life.
- For 2013, the national Living Wage was £7.65, £1.34 higher than the National Minimum Wage of £6.31. In London, the 2013 Living Wage figure was £8.80.
- An independent study examining the business benefits of a Living Wage policy in London found that more than 80% of employers said it improved staff’s work, while absenteeism had fallen by 25%.
- The study found that 70% of employers felt that the Living Wage had increased consumer awareness of their commitment to be an ethical employer.
- The Living Wage figures are announced in the first week of November of each year, during Living Wage Week. Living Wage employers should implement the new rates as soon as possible thereafter.
Hodgson Sayers employs over 100 staff and decided to offer the Living Wage as part of its 35th anniversary celebrations. Employees benefitting from the switch include young workers, unskilled labourers and apprentices. Both Canary Wharf Group and Hodgson Sayers chose to include apprentices within their remit even though that is not a requirement of accreditation.
But the accreditation process also requires signatories to ensure that all employees of third-party suppliers and subcontractors are also offered the same rate.
Wade added: “We view it as a ‘no-cost’ option. It may involve us paying more initially, but the impact is that, long term, we save on recruitment and training costs as we retain our staff much longer. Likewise, when it does come to recruitment, we attract a better quality of staff. This all contributes to our desire to attain a reputation as an employer of choice. Many subbies we use are employed based on a job rate, rather than an hourly rate, so we encourage them, when pricing to us, to be realistic and take into account the Living Wage.”
The Living Wage is set independently (in London by the Greater London Authority), updated annually, and calculated according to the basic cost of living using the Minimum Income Standard for the UK. Decisions about what to include in this standard are set by the public, creating a social consensus of what people need to make ends meet.
