Greater Manchester’s push for fair pay in care
Working together with organisations across the city, Eva Herman and Mat Johnson have been investigating how to make Manchester’s care sector sign up to the Real Living Wage.
Austerity measures, Covid-19 and the cost-of-living crisis have all impacted the sustainability of the care sector. In particular, early childhood education and care (ECEC) and social care for older people both continue to face major financial and staffing crises. These challenges come on top of long-term patterns of underfunding and undervaluation of the care sector, the services it provides, and the occupations within.
These issues are particularly problematic in city regions such as Greater Manchester (GM) which rely heavily on the care sector which provides around 180,000 jobs and contributes more than £4 billion a year to the economy.
The experience of Manchester has also shown that there are acute challenges in terms of competition for staff with employers in the sector often reporting chronic recruitment and retention challenges, and staff regularly switching employers (and sectors) within a relatively small geographical area in order to secure higher pay. In GM, entry-level wages in both ECEC and older people’s care hover close to the minimum wage and staff turnover is typically more than 20% annually.
To explore these issues and challenges in greater depth, researchers Eva Herman and Mat Johnson from the Work and Equalities Institute have been working over the past few years with local actors interested in the GM care economy who have helped them shape and design a specific research project.
Local solutions
The localised nature of employment within the sector has prompted the search for localised solutions. As Eva Herman explains: “In GM these initiatives include a long-running campaign to persuade employers to pay the Real Living Wage (RLW) and the development of a ‘Good Employment Charter’ that accredits employers who agree to a range of minimum standards for their workers, including the RLW.
The Charter emerged out of a manifesto pledge by Mayor Andy Burnham to raise productivity and employment standards across the city region. Employers can become ‘supporters’, but fully accredited ‘members’ have to make an upfront commitment such as paying their workers a RLW.”
In the wake of the pledge to make GM a RLW city region, the aim was to increase the number of RLW accredited employers from 384 to 650 in three years (2021 to 2024) with all businesses across GM paying the RLW by 2030.
However, owing to entrenched low pay, and limited government funding to invest in the workforce, take-up among employers in ECEC and elder care has been very slow. For example, within GM, there is only one RLW employer in the ECEC sector and just 38 in the adult social care sector.
Case studies
To explore the specific barriers that employers faced in relation to adopting the RLW (and charter membership), and what can be done to both improve take-up and address staffing shortages across the city region, the researchers worked together with actors from across GM who were interested in improving working conditions in the sectors to coproduce a research project.
The project centred around in-depth case studies of two organisations, Op Care and Early Years Group, where interviews were conducted with workers and managers and key company documents were analysed.
As Eva Herman adds: “During our study both organisations decided to become accredited as RLW employers and seek Good Employment Charter accreditation. Both had been considering accreditation for some time and were keen to work with us as researchers to document the process, impact and challenges arising.”
The case studies took place over a three-year period and included interviews with policy makers, trade unions and employer representatives from across the sector. Both organisations were relatively large, not-for-profit employers with more than 250 employees across multiple sites and service areas.
However, concerns about the financial viability of paying the RLW, given low government funding in elderly care and set fees in the ECEC sector, had delayed their decision to adopt the policy. Yet senior managers at both organisations strongly believed their workers deserved a pay rise, particularly in recognition of their vital contributions during the pandemic and in the light of the cost-of-living crisis.
Accreditation
Added Eva Herman: “The support of senior leaders at both companies was crucial in terms of securing RLW accreditation relatively quickly. However, differences in the way in which the RLW was integrated into the wider organisational strategy across the two cases, combined with changing financial and market conditions, meant that while the RLW survived at Early Years Group it was abandoned at Op Care at the end of 2024.
“This decision at Op Care reflected an uptick in ‘de-accreditations’ within low wage and labour-intensive sectors such as hospitality and the care sector. At Op Care it was decided by management that the RLW was no longer financially sustainable, as funding increments had not been in line with increases in the RLW, and it withdrew from both the RLW and Good Employment Charter accreditation.”
The comparatively small share of workers on lower pay rates at Early Years Group meant that the cost of maintaining the RLW was lower, and the embedded nature of the RLW within the organisation’s mission statement of tackling poverty and inequality made it more difficult to renege on.
Impact
The findings show that a purely ‘business case’ approach to HR management (HRM) may not be enough to sustain policies over the long-term, and that senior managers must recognise both the business and moral case to ensure that policies such as the RLW are embedded and sustained within an organisation strategy and culture.
Added Mat Johnson: “Managers need to ensure when implementing the RLW that it is embedded within core strategies to make sure it’s viable. Our research also showed that such ‘difficult’ cases of positive impact are potentially highly informative when it comes to understanding the real-world implementation of HR processes and the various contradictions and trade-offs that emerge.
“Through our ongoing and co-produced research we observed that impact unfolds in uneven and often unexpected ways, but positive and honest conversations between different actors helps support experimentation, knowledge gathering and learning - and ultimately the development of impact.”