Call me bitter if you say this is an article more related to sour grapes. But as you read a bit further, you will see much of this is not just factual, but in some respects the death of the janitorial industry. Some 38 years ago I first got my start in the janitorial industry as a window cleaner working for then a company called Maximum Maintenance which was located in the Morris Park section of the Bronx. Little did I know that the summer job I was forced to take by my dad would later turn into a thriving janitorial business, servicing commercial clients that ranged from office complexes and retail malls to shopping centers and medical facilities.
Over the course of the years, I have learned a lot about the industry and it has evolved in ways I never though could happen. From the early days of paste wax and steel wool hand rolled pads used with 175 RPM single disk machines to now propane buffers and battery powered ride on scrubbers. From buffing 1,000 square feet per hour to 10,000 square feet per hour the cleaning industry was on the move.
In those earlier times, what would once took a ten men crew to get a then Calder's Department Store cleaned is now done with one third the labor. Today's ride on equipment and the new thermoplastic finishes have changed the industry and production rates all for the positive. Floor care over the last 20 years has grown up and become sophisticated. A two man team today can sweep, scrub and burnish a 40,000 square foot retail store with ease and do a great job in the process. Because of these industry nuisance corporations that employ the services of commercial cleaning contractors began to reap the rewards.
Because of this, as well as new equipment and chemicals, retail box stores were getting better services then ever at a fraction of the cost. It was not long before these executives began to realize that they could buy down the cost of these services if they hired the companies on the cutting edge of who was using the newest technologies. It makes sense and for an organization to buy a service at the best price possible but there comes a point where it can go to far. No one ever wants to overpay.
As a contractor that provided these services, I've worked hard at developing strategic relationships with area managers and district managers in hopes of earning there business. Back in those earlier times, store managers, facility mangers and district managers were responsible for their stores upkeep and budgeted costs. It really was timing and a little strategy walking in to offer the services of your company knowing in advance the decision maker was going to be there that day. Often one store done well would result in a second and so on down the line. We grew our business through relationships, a hand shake and the fact that the owner was there when they needed him.
Today much of this has changed. Over the last 20 years, National Contract Management firms have taken over and to some extent they have destroyed the industry. Today's business model is a company in the cleaning business that does not even own a broom but cleans 3,000 retail stores. It's a spreadsheet with numbers compiled to entice the already cash starved retailer. How does this happen, you may ask? How and why would a company retain a company in California to clean a mall in Texas or Canada?
Many companies realize that by offering larger segments of their business, they can expect deeper discounts, one stop shopping and one invoice to process. So now instead of 60 company's maintaining 2,500 stores and processing 425 invoices and checks, its all done with one contractor, one invoice, one check and one person to call when there is a problem. There is a cost involved with expediting paper and sometimes it can be very costly not to mention time consuming.
But there is another cost they may not be aware of. It's a hidden cost in the loss of customers. Sometimes the quality of work performed and the response time for a National Vendor in California to get an account executive up to New York to deal with an issue is not always a fast turn around. This is primarily because the National Management Firm hires the local contractor to do the work for 20 to 35% less than they are getting paid. These companies that maintain potentially thousands of stores sometimes give their managers up to 300 stores to manage in various states. They provide their services by hiring local mom and pop type small janitorial companies that are eager to earn the new business. Primarily because many of them have no business! But these companies hired often lack experience, have undocumented workers and even worse at times, no insurance. This not only leaves the National Vendor exposed but also the retail chain that hires them.
But in many instances, the services lack the personal touch you would expect from the guy around the corner that earned your business and even shops in your store. He knows your traffic pattern and in most cases he or she is intimate with the community and the managers and district managers. I can't tell you over the 40 years in this industry how many times a family member of mine walked into a store that I was maintaining and suggested I drop by to investigate the quality of services my men were providing. When you have a complaint, you get the owner when you use a local company and not a manager who is managing a vendor who is being under-compensated for the services they are performing.
So what was to gain by making such a radical change and removing Servco Industries or any other vendor in the same situation? When I lost the contract, I remember the purchasing agent telling me that my company was more costly then the national firm. The savings for them was a whopping $2,096.64 per store per year. Now I'm not suggesting that the savings multiplied by thousands of stores does not sound enticing, but why could they not negotiate that .33 cents per hour difference? And what about the clients that shopped in that store and will never return because their child was subjected to a restroom that smells similar to raw sewerage. Was it worth the $36.96 per week savings?
I do think the industry will eventually change and return to local vendors working locally, but that will happen slowly as the death of the retailer finally levels off and a new breed emerges. In the end, there is always a cost involved. I think that companies should dramatically scale back the amount of stores they give to a vendor and if your are inclined to use a management company, try to select one that is in your state or a close neighboring one. When the smoke clears, you may lose more in customers than you saved in cleaning costs.
Charles Cestaro Servco Industries [email protected] 877 4 SERVCO
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