It’s morally bankrupt to not pay the living wage

George Osborne recently introduced the new living wage in the Summer Budget. The care sector reacted with cries for more money and claims care homes could be bankrupted and closed.

In our view, it’s morally bankrupt to not pay the living wage. The people who do the most important work, supporting and caring for our older people, deserve to be rewarded for what they do.

We know it is possible to run a viable business and pay people a living wage. In our design of Evermore we have already factored in staff costs of £9/hour to come into play well before 2020. Do we have a crystal ball? No. We simply understand that the only way to succeed is to have a well-rewarded and valued workforce that delivers astounding customer service.

But to make it happen, you’ve got to have the right business model and the right people.

The right business model is one where the middle management is stripped out.

In most corporates you have a raft of people just checking what other people are doing. A large care organisation might have 30 regional managers that cost the business around £150,000 in wages and other costs. That’s a lot of money and a lot of checking, but not much doing.

Imagine what that money could do if it was invested in the front line instead? You’ll get the right people. Staff who are hands on, prepared to roll their sleeves up and are multi-skilled. As result you won’t need people to manage the managers, because you’ll have staff who are brilliant at what they do and have the skills, confidence and power to make things happen.

Maybe the smaller care homes will close but that’s because they won’t change.

Many of the owners and managers of smaller care homes believe there is nothing new to learn about running a care home. They’ve been doing it for 30 years and resist being taught a different approach. Yet they’ve built their business off the back of referrals that have been handed to them by the local authority.

Times are changing and they won’t have those referrals handed to them. These small care homes will need to market themselves and invest in their staff, something they’re not currently doing because there is an astounding level of arrogance. Consequently, I have no patience or sympathy for those people saying it is too hard and their business is under pressure.

I know many SMEs who already pay the living wage and more, and they have a committed and long-serving workforce that work together to adapt and grow the organisation as a result. They are commercially minded and understand what it takes to make a business sustainable. The care sector should take note.