The National Minimum Wage.

Can you remember the fear and consternation that the National Minimum Wage created in most contractors’ minds when it was first introduced? It was almost as bad as TUPE as everyone had their own bête-noires ranging from worrying about customer’s willingness to pay above inflation increases or would they cut service levels to balance their books, to wondering whether other contractors would stick to the rules and actually pay the going rate? And then would higher paid workers argue or strike to retain a differential?

In the main all these worries and troubles proved unfounded. Indeed here at Newlife even though we operate nationally, the North east of England and parts of Scotland were the only areas, which didn’t already have base cleaning wages well above the new set level. In fact we have many geographic locations where market forces dictate that wages are 30 – 50% above the NMW. In these areas if you aren’t willing to pay the going rate you may attract a cleaner for a week or two but then they will be off to the better paying site down the road. Gossip about rates travels faster than Concorde!

Why is it though that we and probably many other contractors are almost scared to ask for a proper financial return for our services? How many times have we had to present a case to garner the smallest of increases probably from a client representative who if asked to live on the National Minimum Wage would think that their employer was insulting them? Could you bring your family up on just over £11,000 pa? And that’s if your lucky enough to be able to string enough part time jobs together to give you ‘full time’ employment.

Family needs

The National Minimum Wage is just that – a minimum. It is not a living wage and a sole provider couldn’t bring a family up on it. So although the NMW has helped raise wage rates within the cleaning industry, somehow, if we are to earn respect for our staff who perform a difficult and unpleasant job and one that so many other people almost look down on, we have to fight for a Living Wage.

How do we do that? Quite simply we have to get away from the notion of charging for so many of our services by time and move to specifications so we are charging the client for outputs, what we have done not the time it took to do it. When we charge this way it then makes sense for the company to invest in more efficient equipment, materials and modern processes. For the actual cleaning operative it now also makes personal sense to be continually updating his or her own practical skills so that they know how to and are able to maximise the benefit (time saved!) that this new equipment and materials brings.

It doesn’t matter whether it’s a standard one cleaner DCS job, carpet cleaning or a void clearance. If we specify what the finished job is going to look like and how we are going to do it and the customer is happy enough to give us the order that then puts the onus firmly on us to do the work as quickly and efficiently as possible. As the customer is paying for results not time, they have absolutely no interest in how long the actual work takes to complete (within reason).

Finished result

The effect on both wages and the company’s financial performance should be immediate and positive. If work is completed more quickly we can do more of it. This means that instead of saving a few pounds from the wages bill it is better for the company to share that extra income then use the time saved to do more chargeable work. For the cleaning Operatives, because they have completed the work in a shorter time they can argue the case for an increase in wages or a bonus based on the labour saved on the job and actually do extra work in the time saved which earns them even more money.

It all sounds so easy so why don’t we do it? Well we do actually but with only a handful of niche services. One of these is carpet cleaning and we had the perfect example, which proves my point this month. Two sales consultants both estimated similar but different jobs. One estimated at a great hourly chargeout rate of £24 / man hour while the other charged out on a unit basis of so much a square foot of carpeting. The profit from the unit-based method of costing was double the £24 man-hour rate!!

The challenge I believe is to introduce this methodology into Daily Cleaning Service, which is the lowest profit generator of all our services and steadily getting tighter and tighter. But if a sales consultants took a ‘brave pill’ and instead of selling the job in terms of cleaning hours actually fully specified what we were going to clean, how often and what it would look like when it was cleaned without any mention of cleaning times. I think they would get a shock at the positive results they achieved not just for the customer, not just in their own commission earnings but on the effect unfettering the cleaner will have on both their earnings potential and the standards achieved on the job.

Are you that DCS sales consultant? Talk to me and I will show you how.

Columbus Dixon.

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