Are You Being Penny Wise, Pound Foolish?

In earlier blogs we discussed the methodology your facility cleaning service provider has probably used to make up their charge for providing your cleaning services.

One of the reasons for doing this was to enable users to realise the competitive pressures the marketplace has put so many contractors under which in turn is reflected in net profit margins of less than 4% on average within the cleaning industry.

‘So what?’ you may think, at least I know someone isn’t making a fortune out of only cleaning my offices for me. But low margins such as this are not conducive to good service.

When margins are so low, profit has to be generated from other areas – reducing area management levels, cutting either the quality or the quantity of materials delivered to site or in the worst cases both, chiselling staff by not paying accrued holidays when they leave, charging you when there are ‘no-shows’ of staff and myriad other ways.

The common denominator of these is reduction of service standards, your service standards.

In our Vision Statement we make specific reference to ‘morals and ethics’ so behaviour such as this is anathema to us, indeed in a recent reverse online auction for the cleaning of retail premises with a national store chain, we pulled the plug on our bids when we realised certain sales consultants were willing to earn their commission by buying market share for their employer at zero profit. (I would love to know what their Operations manager who actually has to try and run the contracts thinks!)

Yes, the purchasing department probably celebrated what they assumed was a massive saving on their cleaning budget. But one night’s celebration for them has so far turned into 4 months of headaches for their store managers, their service and supplies department and the actual cleaning staff doing the work on the shop floor, because that winning bid didn’t have enough direct costs* built in to allow them to meet the work specification in the first place.

What is the moral of the story? Just like anything in life, you only get what you pay for. If you are asking for cleaning bids, make sure everyone is quoting against the same specification. If you want a high level of daily supervision, write it into the spec. If you want to be able to talk to a manager 24/7, write it into the spec. Whatever you want, you must write it into the specification.

When you have all your quotes in, you should then break the costs down into the various headings suggested in my earlier post. If you can’t do this easily yourself from their documentation, get a representative in from the company and ask him to do it in front of you. It is only by drilling down like this that you can discover whether the deal being offered is what it appears to be and whether it actually really does meet your specification.

* Direct Costs – direct costs are the costs incurred only in doing the job. So it covers labour, equipment, materials, consumables, Nic, supervision, training, holiday pay etc

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