To think if your business can’t afford to pay employees a living wage then it isn’t a viable business?

[tequilasunrises]

I see so many posts on here along the lines of ‘my/my DHs business couldn’t afford to pay people anymore’, usually defending NMW being so low.

I think that if your business isn’t making enough to be able to pay its employees a proper living wage (ie they don’t have to claim benefits on top or live in poverty) then it isn’t a viable business?

People having more money to spend can also only be a good thing for the economy and businesses surely?

AIBU?

And then child minding costs to parents would increase because having loads of independent child minders would mean none of the benefits of scale that you gain by having large numbers of children in one place such as power, equipment, consumables, etc.

On the contrary, I think you would be hard-pressed to find many people for whom a nursery is presently a cheaper option than a childminder, and increasing the number of childminders available is more likely to bring the cost down rather than drive it up.

Benefits are not supporting employers to pay too little, benefits are supporting lifestyle choices of the individuals receiving them. I earnt NMW 7 or 8 years ago, so did my partner, we flat shared with a friend and could afford a couple of holidays a year, we certainly weren't hard up. We weren't living with parents we were privately renting in a totally different town. Of course I'd ahve been having a miserable time if I was trying to bring up 3 kids living on my own, but that is not the faulty of the business. People can live on NMW, and can live comfortably if they make lifestyle choices that puts them within their means. I know that there will always be outliers and exceptions, but these people should be just that, the exception, and helped as such.

Unless you are under 25 minimum wage is the living wage.

Nope. But it should be. The current living wage is estimated to be between £9.30 and £9.70, minimum wage is £8.21.

You’re totally right. My childcare business needs to pay workers a living wage.

The government chooses how much to pay my business in funded hours, which is way less than my actual charging rate.

I then need to put my charging rate up enough to cover the living wage increase as well as the deficit in funding.

However, you’ll probably complain about the cost of childcare

Looking at my current staff, I think only one or two of them would be able to childmind, mainly due to not having sufficient space to do so.

They could nanny, but unless you've got 3+ kids that will cost the parents a chunk more.

A lot of parents don't trust solo childcare settings either, you only have to read threads on here to see that. There's already a shortage of childcare, pushing nurseries out of business is not going to make it cheaper

Just out of interest to the business owners on here in the last 12 months how many staff moved on? Did you replace them and if so how much did it cost to train those new staff? Did you have any other extra costs due to staff leaving ie extra hours to cover inexperienced staff or to cover lack of productivity, costs of advertising for new staff or even even such small things as extra admin for new employees. Add it all up and tell me if you hadnt needed to spend extra on new staff could how much more could you have paid your current staff and do you think they then wouldn't leave.

Trying to think through as we have actually expanded this year. Team is around 20.
-highest paid member of staff left to take a higher paid but also much bigger responsibility role. We promoted from within so no cost of replacing, training is internal so no direct cost. Actually worked well as we had someone ready to move up who we were at risk of losing and who we really valued.

• apprentice quit after a few weeks, decided childcare not for them. No major problem, nothing to do with wages - they didn't want to do a qualification which is mandatory.

• one made redundant due to restructure, our choice.

• one left who was on the verge of being sacked anyway!

For all I have said childcare is low paid there is progression with us and we do push people up so they don't just sit at the lowest salary for years on end.

We started with a team of 5, over 5 years ago. 3 of those are still with us, one moved back to her home country (so nothing to do with us). Those 3 have all been promoted and are our most senior staff.

We actually lose very few staff to competitors/similar environments. It tends to be bigger moves - people from overseas moving home after a few years here, a couple who have gone in to teaching, a few younger ones who have decided it's not for them. Mostly not pay related issues.

In the last 12 months 2 people have left my business, first person left because she had a baby and decided to be a sahm, we had a person who was looking to go full time so they took over their job so no trainging or extra costs. Second person left as they moved away, they where replaced with someone already qualified for the job so just needed a police check. I like a pp also don’t lose many staff and the view info are not lost due to wages.
I rarely have to spend money on training staff apart from police checks (most already have child protection and first aid) advertising few jobs that come up doesn’t cost more than it would cost me to pay more than what wages already are.

I found a pdf explaining how the living wage is calculated... its from 2016 but I guess the principles didnt change. In short, they calculate the costs for different type of families and then get the final number by using the weights. from what I can see this resulting wage (8.45) should be enough for couple with 1 child (so each parent "covers" themselves and 1/2 of child costs) but it will not be enough to support one person living separately
<a class="break-all" href="https://www.google.com/url?sa=t&source=web&rct=j&url=www.resolutionfoundation.org/app/uploads/2016/10/Living-wage-calculations.pdf&ved=2ahUKEwiNt4j63v7lAhWFUMAKHTcABNgQFjAOegQICBAB&usg=AOvVaw2t4WNj1x1k7yL3nLGZklrw" rel="nofollow" target="_blank">www.google.com/url?sa=t&source=web&rct=j&url=www.resolutionfoundation.org/app/uploads/2016/10/Living-wage-calculations.pdf&ved=2ahUKEwiNt4j63v7lAhWFUMAKHTcABNgQFjAOegQICBAB&usg=AOvVaw2t4WNj1x1k7yL3nLGZklrw

BackforGood

If all those staff were paid their true value, how are you going to balance the books, as the parents using the facility don't have the wiggle room in their budgets to pay out 50% more for their childcare.

I am not British and I am reading this from my own country (in the EU). Over here there is a separate minimum wage for every sector of the industry (e.g. retail & distribution, tourism, factory work, medical staff, etc). As for childcare, our government subsidises state run childcare facilities, so the fee parents pay for childcare is based on their income.
Would this work in the UK?

I think paying less than living wage to those who contribute to your riches is a crime. How the hell people like Zuckerberg and Bezos sleep at night is beyond me.

Eh.. Zuckerberg runs Facebook which pays notoriously well. They might have privacy and tax ethical issues but not salaries so much

Amazon, on the other hand, treats employees like serfs. There's an additional issue with agencies and the gig economy - these big companies who undercut independents, overcharge the clients and take a slice of every transaction while doing very little for it. An awful lot of the high tech disruption start up businesses are basically extortionists (what Uber has done to taxi drivers being the most accessible example.)

Reanimated - not really. How are they extortionists? Uber is basically the technology and the drivers are self employed. Taxi drivers were always self employed From black cab drivers to Addison Lee. Uber drivers are undercutting black cab Drivers fees - that’s competition and how the economy should work. There’s no reason why an industry like taxis should be protected from fair competition. It’s better for the economy and transport if there is a fairer price. No one is entitled to inflated wages for driving a cab. It’s not some sort of specialist skill.

Uber takes less of a fee (from the driver) than normal minicab places.

My dh recently liquidated his business after 10 years. The main reason being that he had so much competition from firms based abroad who would take in jobs dirt cheap - whereas he couldn’t because of the cost of employing people here. We paid more than minimum wage but not masses more.

We are far better off now he is working alone - I used to work with him I am now a sahm and even with that we are much better off (we were seriously struggling the last year because he had to pay everyone else before us - to the point of not having money for food)

It was a tiny business we had to make just 4 people redundant but I know dh has been full of guilt over it.

It’s just how things are - the government WOULD see lots of small businesses go under if the minimum wage increased BUT I don’t think anyone could possibly say if that would help or hurt people in the long run.

Good points and most people are employed by employers with 10 or fewer workers despite what the press might imply so small business is the UK's biggest employer.

" At the start of 2019 there were 5.82 million small businesses (with 0 to 49 employees), 99.3% of the total business. SMEs account for 99.9% of the business population (5.9 million businesses).
SMEs account for three fifths of the employment and around half of turnover in the UK private sector.
Total employment in SMEs was 16.6 million (60% of the total), whilst turnover was estimated at £2.2 trillion (52%)."
www.fsb.org.uk/media-centre/small-business-statistics

'Just out of interest to the business owners on here in the last 12 months how many staff moved on? Did you replace them and if so how much did it cost to train those new staff? Did you have any other extra costs due to staff leaving ie extra hours to cover inexperienced staff or to cover lack of productivity, costs of advertising for new staff or even even such small things as extra admin for new employees. Add it all up and tell me if you hadnt needed to spend extra on new staff could how much more could you have paid your current staff and do you think they then wouldn't leave'.

We've had one staff member leave this year. Basic shop work and we pay £9.50 per hour (including paid lunchbreak) for a part time position and allow staff to pretty much book time off whenever they like, so I'd say we're a flexible employer. He used to ask for more hours then phone in sick for around a third of the shifts he was offered. A good worker most of the time when he showed up but very unreliable. Would often say he wanted to stay at home and take care of the house whilst his partner went out to work for the both of them. Would also often ask to be promoted for a payrise even when we were very clear at all stages of the recruitment process that the job is at the level it is and there are no middle management positions. The impact financially was minimal to us. I utilise free job advertising and manage to recruit perfectly good employees. Other staff are happy to pick up extra shifts whilst we recruit. I also enjoy my job, so if I need to work extra hours it's no hardship.

I believe he would have left even with a payrise (which we wouldn't have offered). His work history showed he never stayed in a job for longer than a couple of years before moving on. A lot of people just don't want to work or overvalue their contribution to the workplace. I spend a good part of my day checking staff are actually doing there job and not just sat on their phones/Facebook or having their mates come in and chat to them for ages. Honestly, if we had a staff member who was reliable and just got on with their job without needing constant reminders I would consider giving them a promotion and a payrise. The prospect of actually being able to leave the shop in safe hands to take a few days holiday would also be nice. In 8 years of co-running a business I'm yet to see that happen.

I win. I haven't had anyone leave for 8 years.

I’m a recruiter/headhunter self employed which is great because it means we do things my way or the highway. The biggest criticism I have of businesses is their hiring process, understandably I guess, but time after time I see companies employ lazy, unqualified dim wits because they like them. That’s it, that’s the feedback. We liked one candidate more than another. WTF that has to do with anything I don’t know.
There’s no crashing desire around the role, no selling the opportunity to the point where the potential employee is doing backflips if they are successful and is desperate to impress once they’ve started. No progression/career planning in place so there’s a clear pathway if one achieves. And that is where they all go wrong.

My workplace was on TV last week, thankfully there was a lot of focus on poorly paid but vital staff cleaners, maintenance etc. Despite this it won’t make a single bit of difference to their pay.

We liked one candidate more than another. WTF that has to do with anything I don’t know.

Work is built around human relationships as much as raw productivity and relationships thrive when people like each other for whatever reason. That’s how so many people on this very site end up with lazy useless DHs, they clearly liked them for non logical reasons rather than their productivity. Business as a human pursuit can lead to similarly poor outcomes.

@ busybarbara that concept really does need knocking on the head in my experience. The outcomes in business and in pleasure are not favourable

Likeability is a difficult one tbh - we've had situations where we've had two candidates, one better qualified and more experienced, the other less so but who has come across as a much nicer, more genuine person. I can think of one example where that happened, and we went with instinct of the person we liked more. The other...well they later turned up on one of those facebook groups where they expose paedophiles grooming kids online.

In a small business personality clashes can be hideously disruptive, so "we liked them more" can easily be shorthand for "they seemed like a warmer person who would fit in better with the team". If you have a business where the ability to build relationships is important then there's a lot to be said for being likeable.

Thank goodness I’ve not had any complete odd balls or criminals through the doors, but Ted Bundy was extremely charming never forget that