Michigan Minimum Wage Threatens to Drive Janitorial Service Pricing Up
Here in Michigan, the state’s minimum wage continues to go up seeing increases from $8.15 in 2015 to $8.50 in 2016, $8.90 in 2017 and an increase to $9.25, expected to go into effect January of 2018. In industries that depend heavily upon labor like the janitorial industry, rising labor costs have contributed to increased service costs for the customers these industries serve. With labor costs accounting for the majority of janitorial costs in a cleaning business, it is easy to see how challenging it is for a commercial cleaning company to singlehandedly absorb these costs without passing along the increase to their customers. Still, Facility Managers are under no less pressure to keep janitorial budgets in check and even reduce costs with further belt tightening. So how are some commercial cleaning companies responding to the increased labor costs without either significantly increasing prices OR sacrificing effective janitorial services? It comes down to some best practices that create leaner and more efficient janitorial services, like:
- Team Cleaning
- Time Saving Cleaning Equipment
- Smart Cleaning
- Employee Retention Practices
- Open Book Pricing
Team Cleaning Uses Specialization To Maximize Effectiveness & Efficiency
While many commercial cleaning companies continue to use zone cleaning, team cleaning has proven to be more efficient and even more effective. Zone cleaning divided a building into ‘zones’ or areas that were the responsibility of an assigned cleaner or cleaners. With zone cleaning, each cleaner was responsible for all cleaning tasks in their zone, sometimes an entire floor. The problem with zone cleaning is one of duplication and specialization. For instance, if each cleaner must vacuum, clean restrooms and the myriad of other duties involved in cleaning one’s zone, then they must each have a set of the equipment, tools and products required. Likewise, if zone cleaners are responsible for a range of tasks in their zone, they must be adequately trained in a number of duties. The diffuseness of responsibility can also make holding individual cleaners or teams accountable for shoddy or missed work more difficult. Team cleaning offers a much leaner approach while allowing for specialization and enhanced accountability. With the team cleaning method, cleaners perfect specific tasks and perform them throughout a facility. So frequently there is a light duties specialist, a vacuum specialist, a restroom specialist and a utility or general specialist whose duties may vary. With each person responsible for a specific cache of duties, the work becomes more efficient and accountability becomes heightened. And with less equipment needed, costs are managed better.
Time Saving Cleaning Equipment Can Keep Janitorial Pricing Low
Janitorial equipment has made huge strides in the last few years. From vacuums to floor cleaning machines and more, commercial cleaning equipment has become more efficient and more effective. For instance, with the Clarke’s Boost floor cleaning machine, a case study showed an 84% reduction in labor compared to older floor cleaning methods. Investing in this technology has an associate cost but high tech, efficient equipment can significantly reduce man hours and thus helps keep prices steady even as Michigan’s minimum wage rises. A second example, HEPA filtration backpack vacuums, allow workers to clean more than twice the area of a building in the same time as traditional vacuums while reducing repetitive motion injuries and being better for indoor air quality. Not only does this advanced commercial cleaning equipment save janitorial labor hours, most of them are greener than ever using fewer chemicals, less power and less water than before.
Smart Cleaning Can Reduce Commercial Cleaning Prices Without Service Drop Off
What is Smart Cleaning and how can it help push back on the rising costs of janitorial labor? Smart cleaning is essentially the process of strategically reducing services. We say strategically, because if your services just drop off, you will be inundated with complaints and issues. The key to Smart Cleaning requires two things. First, an experienced commercial cleaning company that understands where they can cut back and where they cannot. Second, you need a janitorial company willing to take the time to really get to know your building, use patterns and where services can be reduced without throwing your building maintenance into a tailspin. Successful Smart Cleaning requires a great deal of thought, customization, innovation and commitment. With Smart Cleaning, you and you janitorial services company decide which services are essential, which are important and which you can stagger or intermittently go without. In the hands of an experienced cleaning company, Smart Cleaning offers one of the best way to cut costs, however, with a less experienced office cleaning company, it just looks like your cleaners are doing less. The most strategic Smart Cleaning downshifts janitorial hours without a very noticeable drop off in service.
Low Janitorial Turnover Creates Efficiencies & Helps Hold Janitorial Pricing Steady
People are the most important element in any service business. The janitorial industry already has pretty significant industry turnover. So when you find companies that work hard to keep their employee turnover significantly lower than the industry average, you are likely to save money. Why? First, because the costs of bringing on a new employee are very expensive, there is recruiting,screening, hiring, training and more. The more janitorial turnover, the more frequently a commercial cleaning company must incur these employee onboarding costs and you can bet these added costs are eventually passed on to you the customer. Second, the longer a cleaner has been an employee the more consistent their work is, the more efficient their work is and the more quality training they have been exposed to. Most of the long term cleaners can get their work done quicker and better than a slew of green hires.
Open Book Pricing Shows You Exactly What You Are Paying For
Open Book Pricing is when a janitorial company literally opens their books and shows you how they break down costs and profit. In this way, you can see both that you are getting what you pay for and that there are hard costs to cleaning that are largely outside of your cleaning company’s control. Typically, janitorial pricing is based on the following items:
- Employee Benefits
- Directs Costs (cleaning supplies, paper products, etc.)
- Management Free
Labor is the single greatest expense in a janitorial service so it follows that when there is an increase in the Michigan minimum wage, it becomes very challenging to keep prices static. The most effective, responsive janitorial companies will look everywhere within their business to make things leaner to avoid passing on additional costs to the customer, including things that reduce reduces labor hours like Team Cleaning, Smart Cleaning and efficient equipment, but if you need a certain amount of fixed labor hours, the costs of those hours will increase with an increase in our state’s minimum wage. So the goal is then to hold costs or at least, keep price increases as low as possible and understand precisely where any price increases are coming from. Leaner processes can help keep prices steady as Michigan’s minimum wage continues to rise, but the impact on the labor component of janitorial prices is unavoidable.