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Quite Right Too!

Alan Smith
Negotiation Living Wage Agreement (1)

What a world we all live in.

My wife has taken to switching off the news, and to be honest I’m not surprised. January is a depressing month at the best of times. Bills to pay for the excess of Christmas, rain, grey days, dark in the morning and evening, very little to look forward to, certainly as I will not be able to take my now customary break in the sun in Feb half term.

On top of that COVID, riots in the US, Brexit, increasing death rates in the UK. Nightmare.

Delighted to report that the UK seem to have a handle on the vaccination scenario, although a bit slower than everyone would like. I am hopeful of a return to something approaching normal by the summer. We may still have some issues around social distancing and masks, but I hope we can go to the gym or pub, whatever is your poison, or ideally both.

So, against this backdrop, the announcement by the CEO of Unilever, the second largest listed company on the London Stock Exchange that they are committed to insisting on every supplier they use across the world paying their employees a living wage, came as a ray of light through the gloom.

Unilever, who have some issues in the past with unions in South Africa, have posted on their website that ensuring people earn a living wage is a critical step towards their aim to building a more equitable and inclusive society. They believe it allows people to afford a decent standard of living, covering their basic needs such as food, housing and healthcare.

They claim to already pay their employees at least a living wage. Now they want to secure the same for more people beyond their own workforce, specifically focusing on the most vulnerable workers in manufacturing and agriculture. They intend to work with suppliers, businesses, governments and NGOs to create system-wide change.

Unilever intend to complete this herculean task by 2030. My wife, cynic as she is, and running out of the room as I was listening to the dreaded news on radio, said how can it possibly take so long?

Quite easily I would have thought. Whilst Unilever claim to manufacture up to 80% of their brands in the UK, I would have thought many of their raw materials come from a vast swathe of the world. Brands such as Cornetto, Dove and Persil which have global markets rely on distribution, manufacture and added value creation throughout the entire supply chain.

As a negotiator, the challenges they face throughout this chain are simply mind boggling, as are the compliance and price challenges they face when doing deals with both buyers and sellers.

At the simplest level can you imagine the discussions about price increases throughout the supply chain. Suppliers saying, we have to increase our prices to Unilever because we have had to increase our labour costs?

Retailers saying, why should we pay more to satisfy your corporate guiding principles? 

Looks like a busy few years across the business.

Which I am hopeful will be good news for people like me, who make a living out of training companies to do better, faster relationship-building deals.

For us, at a customer level it will certainly require us to think carefully about what we buy, and the suppliers and retailers we buy from. Price is important but may not be the most important thing when the planet and our Global neighbours have to pay for it.


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