By Dominic Ponniah, CEO of Cleanology
How Brexit shapes up, will bring challenges for the cleaning sector. Dominic Ponniah, CEO of Cleanology, explains how businesses can buffer themselves against the challenges ahead.
The vote on Brexit was almost three years ago, yet uncertainty seems to be the only inevitable as we shamble towards a deal of some sort. It was never going to be straight forward but, as time goes on, businesses are finding it increasingly difficult either to plan for the future, or to reassure employees that post-Brexit, the situation will be ‘business as usual’.
As businesses – particularly those with European offices – look to reduce UK office premises, the UK may experience a fall in the number of non-cleaning businesses. Others may delay major decisions on office moves, investment decisions and suppliers, resulting in fewer contracts being available. In May, holiday firm Thomson blamed Brexit uncertainty for a £1.5 billion loss while, according to the Institute of Directors, 29 per cent of firms in a survey of 1,200 members have either moved part of their businesses abroad already or plan to do so. For the cleaning industry, the situation is equally ambiguous, and we will need to come up with even more creative ideas for cleaning buildings on lower budgets.
Equally, in a sector that relies heavily on overseas workers, resourcing will also be affected. Across the UK, 18 per cent of the workforce comes from outside our borders. However, the statistics vary enormously from industry to industry. For example, 40 per cent of doctors in the NHS come from abroad; in cleaning, the figure is 24 per cent.
At Cleanology, we employ 500 staff across London and Manchester, and focus on three main sectors – offices, retail and hospitality. Our client base includes the Bank of Brazil, Harrods and Dishoom. We have always prided ourselves on the diversity of our workforce and actively encourage applicants from other countries. In fact, 79 per cent of our workforce comes from abroad, while almost two thirds of our staff hail from EU countries. As a result, we have been acutely conscious of potential challenges, and actively addressing the possible effect of Brexit for some time. We are not alone. A recent survey in the trade press quoted just over three quarters of respondents as saying their workforce is likely to be affected.
Today, the UK cleaning industry employs more than 500,000 people. Jointly, the 9,000 companies that make up the sector generate £8 billion in revenue each year. We are a force to be reckoned with, and one that other businesses in the UK would be lost without. And we will undoubtedly struggle – at least in the short term – without our overseas workers.
Ongoing uncertainty is a major concern. We are hearing of increasing numbers of Europeans returning to their home countries to avoid the potentially negative impact of Brexit. At the same time, many EU member states in Eastern Europe are seeing falling unemployment and rising house prices. Under these favourable conditions, fewer workers are travelling abroad to find work. This is exacerbated by the falling value of the pound against the Euro, which means that the real value of wages earned in the UK is just a fifth of the pre-referendum worth.
These issues, combined with the UK’s low rates of unemployment and highest employment in many years, mean that resourcing is the greatest challenge currently facing our industry, especially in metropolitan areas.
The first step to resolving the resourcing issue is to examine working methods and devise a strategy that makes the most of the staff who are available. Creating full-time roles is one way to bridge the gap, while offering part-time staff extended work or night shifts also improves efficiency.
Switching from a large number of part-time, to fewer full-time posts often proves popular with staff. It helps to build a cohesive team that feels a greater connection to the business, performs more strongly, and tends to stay with the company for a longer period of time.
One thing that is clear is that Brexit is going to drive wages up, so our clients need to be prepared for the change. Rises in costs are always painful but, in this case, the move should help to foster a greater sense of worth among staff, especially if it is linked to a fairer, more beneficial system for pay. Cleanology is a keen advocate of the Real Living Wage for all operatives. The Real Living Wage is the only rate based on living costs and is currently set at £9 throughout the UK and £10.55 in London.
Although current negotiations on the likely trade deal to be agreed are not clear, there remains a possibility of tariffs being imposed and delays at borders – at least in the early days of Brexit – with the creation of new customs arrangements.
Overall, the consensus is that the cost of equipment and materials is likely to rise. We are already seeing this as imports are now more expensive with the fall of the pound. Long term, we expect purchasing to shift from Europe to the USA and Far East.
Without a clear pathway ahead, it would be easy to opt for complacency and continue as usual. However, if we are to retain a robust sector and safeguard our workers, we need to prepare. Although our industry is facing an unprecedented time of change and uncertainty, the picture is not all black, and forced change may bring unexpected benefits and a fairer, more modern way of working.
Training and investment in employees is always beneficial, but with staff retention rising up the agenda, it will become even more important. Trained staff, who feel valued and are properly remunerated for their work, will bring dividends and help to future-proof businesses against the challenges ahead.
For further information, please contact:
Suzanne Howe Communications
Tel: +44 (0)2034 680923