If you are a building service contractor (BSC) or manage an in-house department, the Patient Protection and Affordable Care Act (PPACA) — what is referred to by many as Obamacare — stands to have an impact on the way you manage your businesses.
Although the effect on each business will differ and is ultimately the result of a complex set of variables, the analysis is beyond the scope of this column.
What is clear is that many businesses will face higher labor costs and a tougher operating environment.
If a business already offers employees health insurance, it is possible that the federal law will not have a significant impact on what it does over the next year or so.
However, most cleaning operations are dependent on low-income workers who typically do not presently receive healthcare coverage.
As a result, many cleaning companies are wrestling with the “pay or play” decision.
They need to decide whether to absorb the considerable cost of providing healthcare coverage for employees or pay the penalties — approximately $2,000 per worker.
Whatever strategy an entity decides to take will have a long-term impact on the business, either greatly affecting costs, productivity or both.
Since the decisions centered on the PPACA will undoubtedly consume a large amount of management’s time, there is an elevated risk that operational focus will be lost.
During this challenging time, it is critically important that business leaders stay focused on running quality cleaning operations, using ISSA’s Cleaning Industry Management Standard (CIMS) as a guide.
Focusing On Quality Operations
For the best results, businesses should work on firing on all five principles — six if you’re following the CIMS for Green Buildings (GB) designation — of the Standard.
However, because businesses expect the PPACA to have the biggest impact on cost and productivity, the most critical areas of the Standard related to this topic are service delivery and human resources.
The quality system and service delivery sections of CIMS focus on establishing cleaning requirements or scope of work and how the work will be executed to meet those requirements.
When faced with increasing costs, every dollar of labor is more valuable than it was before; therefore, the most managed businesses will want to drive every dollar of productivity out of staffs.
Getting a handle on your staffing requirements is essential.
The process of workloading a building, as explained in the service delivery section, helps businesses identify areas where labor costs can be saved.
Knowing the data related to building square footage, cleaning times and tasks is required to complete the workloading processes.
This helps identify where buildings or cleaning jobs might be overstaffed or understaffed.
To reduce labor costs, businesses might choose to reduce the frequency of cleaning in certain areas.
If a cleaning organization chooses to reduce full-time employees in order to mitigate the costs associated with providing healthcare — by going from 100 full-time employees to 200 part-time employees, for example — managing staffs and providing direction is going to become increasingly important to ensure employees are working productively and safely.
The human resources section helps businesses stay focused on hiring quality employees, retaining them and training them properly.
An organization with a large number of part-time employees is going to have a bigger challenge when it comes to keeping workers focused and procedures consistent among varying shifts.
Another challenge with part-time employees is an increased turnover rate, which results in hiring costs and a need for more training.
Organizations complying with the human resources section will have a written human resources policy; written plans for hiring, selecting and retaining employees; technical, customer service and personal development training programs; security training; and a timekeeping and payroll system.
With the right data and planning, business owners will be poised to make the best determination in regards to the PPACA’s impact on their operations.
It is up to each individual business owner to decide how they will respond to the new law — to place more importance on saving costs or on saving the quality of human capital and, ultimately, the impact on productivity and performance.
Regardless of the choices they make, business owners who have quality management principles in place will be able to adjust their operations to continue manage a successful cleaning organization.