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Carpet Care

The Great Debate: Privatization

August 24, 2011
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No matter what the topic, price is always a deciding factor.

In the JanSan industry, every decision affects the bottom line — be it company profits or operational budgets.

And, given the uncertain economic climate — many analysts claim we are progressing, while unemployment teeters around double digits — those in managerial roles are looking to save precious dollars across the board.

Because custodial and maintenance operations are expected to function within their means — just imagine a supervisor demanding the ceiling of their operating expenses be raised so they can continue to operate with fiscal irresponsibility — concessions must be made.

It is no secret that janitorial functions are the first on the chopping block when money is scarce.

If you can open up a newspaper and not see a story or two about custodial and maintenance personnel being laid off or "voluntarily" opting for early retirement, I question whether or not your periodical is au courant.

A Trend Toward Outsourcing

There is no question that, over the last two or three years, there has been a stark increase in the number of organizations outsourcing services to building service contractors (BSCs).

When the economy tightens, outsourcing is a common way to cut costs.

Quite simply, though not in every instance, outsourcing services is far cheaper than keeping them in-house.

"The benefits to outsourcing custodial and maintenance services are superior quality, efficiency, value and expertise," claims Joia Aliperti, media specialist for Stratus Building Solutions. "It allows the organization to concentrate on their particular core business opportunities."

Because an in-house operation does not have to pay health benefits, retirement pensions, insurance premiums and things of the like, significant cost savings can be realized with privatization.

In addition to the human resources aspects, a contractor is also responsible for product and equipment purchasing and maintenance and the training and education of its employees.

All factors combined, operational budgets can be drastically reduced — sometimes by hundreds of thousands of dollars per year — by outsourcing some or all aspects of the operation.

Some industries tend to utilize contractors more than others.

Today, we are seeing more contracting in health care, education and government markets.

Bill Griffin, president of Cleaning Consultant Services Inc., says, "If I had to guess, here''s where I put contractor penetration in the following commercial segments: Hospitality, 10 percent; education, 15 percent; health care, 20 percent; government, 40 percent; office buildings, 90 percent; industrial facilities, 40 percent."

There are a seemingly unlimited number of BSCs willing to work for the lowest possible price point simply to sustain work.

Because of their ability to work for less, they can often undercut in-house operations, something bean counters find irresistible.

The ongoing challenge is determining which approach is the best for your organization and not becoming blinded and entrenched in any one technique when the JanSan atmosphere is ever changing.

Bucking The Trend

Despite the increase in outsourcing custodial and maintenance services and qualified in-house cleaners losing their jobs, many facilities and organizations are passionate about the value of having staff members maintain the building.

Generally, an in-house professional has a higher level of buy-in compared to an outside contractor.

Therefore, such factors as going green, training, changes to cleaning regimens and staff meetings are easier to implement.

"The benefit we gain from our in-house custodial staff is that the workers get to know their customers — our students," states Carl Bowman, assistant director of operations for the Custodial Services department at Ohio State University (OSU). "They take ownership of the areas in which they work."

Bowman shares a similar sentiment to many parents with concerns pertaining to the outsourcing of custodial operations by the schools their children attend in noting that it is a security matter for the students who see the same faces each day.

"We''ve had housekeepers who become another set of eyes; they see things — both good and bad — that help the administration stay on top of potential situations," continues Bowman.

Because of the high turnover rate experienced with some contractors, in addition to the practice of worker rotation, safety and security risks can increase.

That is not to say, however, that a veteran in-house employee is any more trustworthy than his or her contracted counterpart, but public perception seems to think so.

There are always those select few who go above and beyond their responsibilities, but contractors and in-house operations alike will generally perform to their level of expectation.

"If the expectation is to take out the trash, run a vacuum and wipe down the bathrooms, then that is all they will likely receive," notes Peter Sheldon, vice president of operations for Coverall Health-Based Cleaning System. "Conversely, if the expectation is that an effective cleaning program focused on reducing health risks through hygienic protocol is established and results and benefits are quantified, then and only then will they change the face of both contractors and in-house operations."

Sitting On The Fence

So, which is the ideal operation: In-house service providers or contractors?

The answer depends greatly on the experience you have had with one or the other.

"Choosing the wrong vendor by not checking references is a common mistake," adds Aliperti. "Making the decision solely on price is another pitfall."

While price is — and likely always will be — king in the JanSan industry, all facets need to be taken into consideration to determine the overall value of either option.

"Too often, the decision for a facility lies with the purchasing department, whose sole objective is cost reduction," explains Sheldon. "The decision should focus on how to create the healthiest environment for staff and patrons. This type of shift in thinking must be driven at the highest level of the organization."

Of course, it is not out of the realm of possibility for both in-house professionals and contract employees to coexist, bringing forth their unique strengths to provide service of the utmost quality.

"If a facility has a long tenured custodial staff and management team, these workers tend to be loyal, caring of the facility and its denizens, and motivated by the bond they may feel toward co-workers, visitors, etc.," proclaims David Kelly, regional director for Jani-King of Baltimore.

However, these benefits are no different than those of a long tenured BSC to whom services have been outsourced.

"We have customer relationships that extend decades, and the personnel in those facilities develop the same sense of loyalty, the same bond and the same operational understanding as in-house custodial workers," concludes Kelly.

Privatization increases competition between in-house staffs and BSCs, helping raise the professionalism of the industry as a whole.

The onus for this dialogue, according to Kelly, should be shared between the BSC and the facility management team to determine the ideal situation to maximize productivity, cleanliness and the health, security and overall wellbeing of workers and building occupants.

If your in-house staff cannot produce such results, it might be time to speak with a contractor.

In the case that the contractor is falling short, it could be time to kick the company to the curb and rehire dedicated in-house personnel.

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