[angela stone]

hi, I have a contract renewal for my biggest client to do now.  As the national living wage comes into effect in April I am having to factor this cost in now to the annual contract, so including the rise in October it's a total of 70p per hour.  Adding this onto the current cost per hour, for this customer it's a rise of £308 plus vat per month and that's not incorporating any of my other cost rises.

is everyone going to simply add 70p per hour onto your current rates, or are you going to swallow some of the cost yourself?  I'm just really concerned that they will take the cleaning in house based on this rise.

thanks in advance

Ange 

[B Bailey]

We will be adding it, all our costs will be rising so can't afford to soak it up.

[Stoots]

up to you really isnt it?

 

[dustee]

Also will be adding it on

[Michelle H]

It is a hard one to do.  I worked it out at 45p per hour increase over the next five years. The biggest problem is that if you past on the cost, do you do it each year which could annoy clients or do you increase it one year twice the amount so the following year you don't increase the cost.
 

[dustee]

For existing client's increase it  " now " and the again in 30 months time
For new clients add on from the start

[The Great One]

\Be careful.

It's easy to say increase it but no one knows your client, you do.

I will be absorbing it as they have another location with different cleaners who are cheaper than me, if I increase I'll lose it.

Don't forget though, this living wage is just the start, it'll be going up to £9-10 pounds over the next 4 years, I feel in April either lots of things will increase in price or staff will be laid off, or both.

[Adam P]

Or you hire under 25 and you'll be fine as I understand this is 25 and over only. Minimum wage still exists as is for anyone below 25

[Churchill Contract Cleaners]

We absorbed the min wage increase in October 2015 but will be increasing prices in April 2016 for the living wage.  Pretty much everyone is in the same boat with this including your customers so they should understand the need for the rise.  I think any contract price should be reviewed annually to and should increase even if only to accommodate min wage increases otherwise you will essentially reduce your profits year on year for a contract if it is not re-negotiated.

[Strata Cleaning]

Angela

I would recommend discussing  with the client. You can get a feel then. At the end of the day if they go in-house they don't necessarily save. They would need to pay their staff, manage the cleaning, orders etc.
The increase is  not driven by you  - client should understand it.

We introduced Living Wage in 2014 and all our contracts were negotiated with clients then - I mention this only as the majority of them supported an idea (apart from few) - despite it was voluntary then. 

[Nathan Hartigan]

We have where possible reduced the hours supplied to keep price the same.
Other older contracts we will increase if the customer is not happy that any new quotes they get will be at the higher rate anyway.