29 Nov 2017
Providing quality jobs through our suppliers
There are an estimated 13,000 people in the UK classed as modern slaves because of their restricted working conditions. Daniel Keyworth, Legal & General’s Head of Group Procurement & Supplier Management explains how we recognize the key role we can play with our suppliers to make sure that we keep pushing for quality jobs.
There are an estimated 13,000 people in the UK classed as modern slaves because of their restricted working conditions. You can read more about this here. Most commonly, people are trafficked into forced labor in industries such as agriculture, construction, hospitality, manufacturing and car washes.
As a UK listed financial services company we rarely come into contact with these industries but we recognize that we can play a key role with our suppliers to make sure that we keep pushing for quality jobs to be created through our procurement activities. Daniel Keyworth, Legal & General’s Head of Group Procurement & Supplier Management explains how.
In a typical year we will spend between £500 and £600 million in asking other companies to deliver products or services to our customers and business on our behalf. During our adoption of the UK Modern Slavery Act we have decided to go way beyond what we have to do to design a new set of data sets, scenario’s and conversations that we expect to have with all of our suppliers to reduce slavery risk and increase the number of quality jobs.
It started with a workshop!
Our first workshop brought together a number of professionals including:
- a number of our key suppliers who operate in higher social risk sectors
- our senior HR managers from across the Group
- Supplier Relationship and Procurement Managers.
We asked our “critical friends” at Anti-Slavery International, to run the workshop to help us really understand how slavery plays out in a UK context and how we would practically spot signs of slavery day-in, day-out when working with our suppliers. The effort was led at the time by Anti-Slavery International Director – Dr. Aidan McQuade who was behind the original legislation in the UK.
We were pleased to also host companies such as Whistl, Crown records Management, TCS, IBM, L&G Homes, Communisis, CH & Co, Lusso Catering and JLL to name but a few…
The workshop covered the application of the legislation, our obligations under the act and the various ways in which Modern Slavery can manifest itself, particularly in the UK.
The day was lively, with lots of interaction and contribution from all, proving the concept that the heads of many are better than few!
Here's what some of those who attended had to say
"I found the session a useful way of keeping up the momentum in this area and also judging progress relative to peers and also relative to the expectations of an NGO." - Richard Denney, Procurement Director at Communisis.
"On behalf of Catherine and myself, many thanks indeed for extending the invitation to us to attend this workshop. We hugely valued being part of this workshop/round table and took valuable information away to help us with our approach to managing this correctly in our workforce and throughout our supply chain." - Sharon Linney, Operations Director at Lusso.
So what did we learn from the workshop?
What became clear early on is that the signs of Modern Slavery, especially in the UK aren’t always obvious; they are subtle and often hidden. It is everyone's responsibility in the business to be vigilant, look out for signs of Modern Slavery and report them accordingly. The UK modern Slavery Act is putting companies under pressure to prove that they create quality jobs and improved working conditions.
2018 sees a new set of common expectations for our suppliers
Working with our suppliers we have come up with a number of indicators, questions and conversations we will be having with them in relation to their direction of working standards and quality jobs. These are currently being integrated into our supplier code of conduct.
This starts with questions about external standards of operation:
- Are you a signatory to the Living Wage Foundation?
- Are you fully compliant with the UK Agency Worker Regulation Standards?
- Are you signed up to the “Swedish derogation model” of operating?
- What is your HMRC risk rating for the past three years?
There are also a number of pieces of trend data that are useful to understand how your business as a supplier operates around workforce standards:
- CEO to average worker pay ratio (excluding bonuses) for whole business
- Permanent to Temp / Contractor ratio working on Legal & General contracts over the past 12 months.
- Migrant to non-migrant workers ratio working on Legal & General contracts over the past 12 months.
- Percentage of workforce getting paid on time every week over past 12 months.
And finally we also have a few scenario based questions. These give us an insight to understand how our suppliers cope when the pressure is on to deliver our specific contracts:
- When your businesses come under pressure for deadlines where do you get additional people from to deliver your contracts? What are the terms and conditions for those people?
- What influence do you have over where your employees live and how do you support them in earning a living wage in each country you operate in?
- Under what circumstances do you ask for money back from your workforce and how do you claim it back?
- Do your temporary workers have to pay you directly or indirectly to be on your books? (i.e training standards, payments, finders fees etc)?
- Do you have a zero hour’s contract policy within your business? If so what purpose do zero hours contracts play?
- How do you deal with emergency payments of wages with your employees? How often does this happen?
- What are your plans to improve working standards over the next 12 months?
In the spirit of cooperation we are now in the phase of rolling out these conversations with all of our key suppliers beyond those who have helped shape these so far. We also wanted to share them publically so that others can provide us with a view on our direction to support the creation of quality jobs in our own business and in our suppliers to see what has been adopted elsewhere.
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