Bluebird Care, Tameside, explains why it has opted for the Living Wage.
Attracting workers who go the extra mile
The home care sector normally has a reputation for poor pay and conditions. Employers typically pay the national minimum wage or a rate only marginally above it. Workers are often not properly compensated for travel expenses or for time spent travelling between visits and are frequently obliged to complete tasks in an unfeasibly short time. As a result, workers are often overstretched, unable to provide a decent service to clients, or earn a reasonable living for themselves.
What makes Bluebird Care in Tameside stand out as an employer in this sector is that it is a small organisation, providing care for elderly or vulnerable adults in their own homes, but it is paying its workers the Living Wage.
NMW v Living Wage
The National Minimum Wage is the legal minimum that an employer can pay its staff and is paid at different rates according to age. It was introduced in 1999 and is reviewed annually by the Low Pay Commission. It is enforced through HM Revenue and Customs. There is a separate rate for apprentices and from April 2016 a new National Living Wage (NLW) applies to workers aged 25 and over. For more information on the NMW and NLW see the employment law pages
The Living Wage, by contrast, is a voluntary initiative started by campaign group Citizens UK, which seeks to persuade employers that paying people more than the minimum wage is good for business. The Living Wage takes as its starting point the needs of the employee, rather than the employer, and is set at a rate that reflects the actual cost of living. The idea behind it is that people should be able to earn a living by working normal full-time hours, and that the government should not need to subsidise low wages with in-work benefits to the extent that it currently does.
There are two Living Wage rates, one for London, which is set annually by the Greater London Authority, and one for the rest of the country set by the Centre for Research in Social Policy at Loughborough University. The rates are recalculated every year. The rates from November 2015 are £8.25 per hour outside London and £9.40 within London.
Bluebird Care Tameside, part of a franchise group, was set up by former nurse and NHS senior manager Lynn Sbaih. “I’d always been concerned about providing the right care at the right time in the right place, with the right person. So I took the decision to leave the NHS and walk the talk,” says Sbaih.
Her approach when starting the business was to set her workers’ pay rates at the highest level she could afford. She looked at her fixed and variable costs, and how different rates translated into charges for clients, and settled on £7.60 an hour. This was 15p above the Living Wage at the time and considerably more than the national minimum wage.
It was some time later that a member of the organisation’s staff, Bluebird’s care manager, spotted the Living Wage campaign. Sbaih decided to get accreditation, which has turned out to be useful as a marketing tool.
"When we have customer inquiries, we explain that we pay the Living Wage and that we do a lot of supervision and training," says Sbaih. Indeed, some clients actually come to Bluebird Tameside because it is a Living Wage employer, even though that means it charges a little more than some other providers. "This is a place with strong, traditional Labour values and paying properly is important," says Sbaih.
Sbaih subsequently raised her employees’ pay to £7.65 an hour, in line with the then Living Wage rate.
Bluebirds’ clients paid £14.55 an hour or £12 for a half-hour care visit at that time. Sbaih won’t do shorter visits, believing that it’s impossible to provide proper care in less than 30 minutes. The pay rates do mean, however, that she cannot work for the local authority, which then paid no more than £11.30 an hour.
Terms and conditions
Being a Living Wage employer has had implications for more than just the hourly rate paid to employees. Bluebird Tameside has signed up to the Living Wage Foundation’s Social Care Charter, which aims to address other aspects of poor terms and conditions in the care sector. One of the conditions of the charter is to pay care workers for travel time between visits. The company will fund this in part by switching to flat rate payments, instead of charging higher rates for weekend and holiday working (at the time workers received £13.95 an hour on bank holidays.) At the same time, Sbaih planned to move workers on to substantive contracts with regular hours, rather than the variable contacts she previously used.
Although people sometimes ask Sbaih how she can afford to pay the Living Wage, her view is that she can’t afford not to. “It costs us money, but the advantages far outweigh anything,” she says. Recruitment is not a problem and retention is improved by the relatively good pay and conditions offered to employees. “To a certain extent you get what you pay for. We’ve got good people who go the extra mile,” she says.
Sbaih recruits her care workers for their values, rather than skills, often taking people with no experience and then testing them out, for example, in a bag packing session raising money for charity at a local supermarket. “They’ve got to like people and be committed to customer service, which some people find quite hard,” says Sbaigh. “We don’t want people who are just interested in the money, or who want 60 hours a week.”
Becoming a Living Wage employer
Since 2011, employers have been able to receive official accreditation as Living Wage employers from the Living Wage Foundation. The model is much like the Fair Trade initiative, allowing accredited employers to use their Living Wage status as a marketing tool.
To become accredited employers must:
- pay all directly employed staff the Living Wage or above
- ensure that all contractors pay their staff the Living Wage or above or, for existing contracts at below the Living Wage, ensure that renewals are contracted at the Living Wage
- implement increases in the Living Wage within six months of the new annual rate, announced in November each year
- apply for a Living Wage licence.
All legal information in this case study is correct at the date of publication. For the most up to date law in this area, click on the ‘employment law information’ link in the Further information section below.