Employment Standards Impact Your Revenue
The Procurement Act 2023 brings a shift in the way contracts are awarded. Competitive pricing and demonstrable technical ability may no longer be enough to secure work. If your business relies on public contracts, directly or as a subcontractor, you should take action to adapt to this key change in the law.
MEAT To MAT Explained
Under the old system, public bodies awarded contracts based on the Most Economically Advantageous Tender (MEAT) which prioritised cost over other criteria. The decision-making process is now based on Most Advantageous Tender (MAT). This shift in wording represents a major change. Authorities will now give more weight to factors including:
- Workforce treatment and conditions
- Social value (e.g. skills training, local employment)
- Ethical labour practices
Impact On Your Business
If your business relies on work from councils, schools, NHS trusts, or other public bodies, even indirectly, your employment practices are about to become part of the bid.
Clients may start asking:
- How are your workers employed? Directly by you? Or on self-employed contracts?
- Are you paying industry-standard rates which go beyond the legal minimum wage?
- Are your apprentices supported through to qualification?
- Do you have clear HR procedures in place – such as a written grievance or dispute process?
If you cannot answer those questions clearly, or you are relying on informal arrangements, you could start losing out.
Winning Work
Under the Procurement Act, employment practices are moving from the margins to the scoring sheet. You could be the best technical contractor bidding but still lose the contract to a company which can show better workforce compliance and social value.
The practices of smaller firms or subcontractors’ practices also affect the prime contractor’s score and will impact their chances of staying on the framework.
How The JIB Can Help
If you are signed up to the JIB Agreement as a member company, you already meet a recognised employment standard with:
- Agreed grading and pay structures
- Legitimate employment contracts
- Pensions, sick pay, and holiday entitlement
- Built-in dispute resolution routes
Public clients will increasingly favour companies which demonstrate commitment to these structured standards.
How To Be Ready
- Review your employment contracts and workforce structure
- Look at how you’re managing apprentices and progression
- Ask yourself what you would show a public client asking about social value
If this feels like a challenge, speak to us at the JIB. We have already built the framework, so you don’t have to. The JIB membership gives you a ready-made solution which meets these additional compliance requirements saving you time and resource.
Stay Competitive
Fair employment is not just a nice-to-have. It now contributes to how contracts are won, and how risks are judged.
If you want to stay competitive in public work, you’ll need to show that your business is displaying clear, appreciable social value.
On Tuesday 03 June, the JIB is hosting a live forum in Birmingham to discuss procurement in more depth – including how to demonstrate social value. Find out more about the upcoming event here.
