At Supply Chain Solutions we are focused on becoming a living wage employer. For us that means (currently) we need to ensure no one in the company is earning less than $15.50 per hour in a 45 hour week, which creates a take home pay of $38,500 per annum.
- A standard week for Supply Chain Solutions staff is currently 47.5 hours.
To do this we have now devised a strategy that we hope all of our clients will support us in.
- Rollout of PaT Feb 2014. More about this in the next couple of weeks. PaT is an HR application I have built that is AMAZING.
- A 3.2% increase in labour costs in April 2014.
Excludes new clients who came on board in 2013.
Excludes a couple of clients that we need larger increases from. We will be talking to them personally.
- A reduction of hours to 45 hours per week in July.
- A 3.2% increase in labour costs in April 2015.
On this basis we can achieve our goal and this will make Supply Chain Solutions the only Living Wage employer in our industry in NZ!
Initial feedback has been positive (thank you, this is always awkward) and we’re expecting people will recognise that we have largely held our labour pricing for the last few years exceptionally well. See below.
By and large we have managed to keep total annual increases at or under 1%.
- For most Supply Chain Solutions clients it is common to spend 1/3 on facility, 1/3 on labour and 1/3 of freight, so if we have a 3% increase in freight but no increase in labour or facility the overall increase is only 1% (see Total Increases in the bottom row of the table above).
- The issues for this year and next is that we need a 2.5% total increase on our overall rates to become a living wage employer.
- I am estimating the costs in red. Those who have been with me for a few years know I am normally fairly accurate.
- Please note in the table that there is an increase of 3% on bulk freight this year also, our first ever really.
- Beyond 2016 we have a strategy to occupy our own facilities. There will be an opportunity for Supply Chain Solutions clients to maybe be a part of this. Doing so can help hedge/control future facility costs. I will update in due course.
- I’m pretty confident we can continue to hold back Courier Post increases. They are generally open to negotiating based on growth. It’s a trade custom for them now to automatically apply a 3% ish increase annually and as you can see we have beaten this every year so far. The parcelWings product is now flying, adding significant revenue each year to this part of our business which we will continue to leverage.