With more than 200,000 janitors among its ranks, Service Employees International Union (SEIU) is a major player in the cleaning industry. So when SEIU begins negotiations in any of its 29 contracted cities, building service contractors all over the country pay attention.

Most recently, the country’s fastest-growing union has been advocating on behalf of its members for more full-time jobs with benefits. The campaign began in 2006 in Houston and Cincinnati, where janitors saw gains in both hours and healthcare. The movement is expected to gain traction over the next two years, when renegotiations begin in several large cities, including Chicago, Minneapolis, New York and Baltimore/Washington, D.C.

“It is definitely a large goal to get everyone on full-time work and we see that lining up in the contracts that expire from 2006 and 2007,” says Tanya Aquino, a spokeswoman for SEIU. “Full-time work over part-time and improving healthcare for workers is beneficial to everyone.”

Of course, switching janitors from part- to full-time jobs is a big change that can drastically affect a BSC. So it’s not surprising that negotiations with SEIU don’t always go smoothly. In fact, Houston’s recent contract came only after janitors went on strike for several months.

In an effort to make talks more productive, SEIU has recently implemented a new strategy — citywide negotiations or a “master agreement.”

Rather than negotiating with one BSC at a time, SEIU now brings all of its employers in a city or region to the bargaining table at once and asks all players to agree on the same contract.

“If we have janitors for one company doing well that’s great, but it’s not helping everyone else and it’s certainly not helping that one employer,” Aquino says. “By leaving certain employers out, that can keep bottoming out labor costs and that doesn’t do anyone any favors. This is about setting a standard across the city so companies can compete over quality and reliability rather than fighting over labor costs, which hurts everyone.”

BSCs seem to be happy with the master-agreement approach. In addition to sharing the cost of legal fees, group negotiations help to create a level playing field for everyone in the area.

“The people with the best relationship with the union don’t get better terms and conditions than those who don’t. The big, nationwide contractors have the same contract as the smaller contractors,” says Paul Senecal, president of United Services of America in Stamford, Conn. “Without 85 percent of the contractors being in the contract, you’d have too many non-union choices and those signatory to the contract would be at a disadvantage.”

Making the switch

United Services of America has been through several rounds of SEIU negotiations. Its most recent contract, signed in 2007, included a mandate for more full-time jobs with benefits to phased in by 2010. The change is limited to two major cities in the area, Stamford and White Plains, N.Y., and affects only buildings larger than 400,000 square feet.

“We negotiated a four-year, phased-in contract, which suits our purposes as well,” Senecal says. “The longer the contract, the more you know. In that way, our goals are aligned with the union.”

Signatories to the contract wanted a lengthy contract to allow ample time for preparing customers for what will be a major change in both how a building is cleaned and for how much.

Although the union agreed to a two-for-one trade-off that allows BSCs to turn two part-time positions into one full-time job rather than extending benefits to all current workers, the shift to full-time employment will be pricey. Full-time pay and benefits are 10 times as much as part-time pay, Senecal says.

“We have been preparing customers for this since 2007, when the union said they would not sign a contract that did not include full-time language,” Senecal says. “We’ve been telling them to ramp up their budgets because in 2010 and 2011 it will be two years of double-digit price increases.”

The light of day

Converting from 4- to 8-hour shifts has other consequences as well. The traditional method of cleaning a building at night isn’t designed for full-time workers. Finding people interested in working long night shifts isn’t easy, public transportation in many cities doesn’t run after 11 p.m., and leaving on the lights in a building all night is expensive.

To meet contractual obligations for full-time jobs, many BSCs plan to switch to day cleaning. SEIU enthusiastically welcomes the change, saying day cleaning offers janitors better work hours that compliment family time.

Day cleaning has several benefits. First, it opens the industry to a new, more reliable type of worker. People like veterans, retirees and stay-at-home parents are more likely to become janitors if the work fits with family obligations.

Second, it improves employee retention, particularly if the positions are full-time, union jobs. In an industry where turnover is as high as 400 percent, day cleaning can reduce those rates to as low as 10 to 30 percent.

“It’s going to mean a steadier workforce so every time you turn around you don’t have new people coming on the job,” says Ian Greig, CEO of Daniels Associates Inc., in Phoenix. “That’s expensive because we have to continually retrain.”

Finally, day cleaning can help offset the higher costs of full-time jobs with benefits. Cleaning during the day is at least 20 percent more efficient and it can reduce energy spending by 15 percent, Greig says.

“There are people who say it can’t be possible but they don’t understand it,” Greig says. “What people don’t understand is that work expands to fill the time you give it. And during the day you have to use much more efficient equipment.”

Day cleaning also creates at least three hours of energy and security savings, Senecal says, which need to be factored into the cost increases for going to a full-time workforce. To drive down prices further to meet customer budgets, changes may be made to specifications, such as cleaning frequencies.

“And the union has to deal with that to make it work financially,” Senecal says.

Dollars and sense

Trying to marry the union’s demands for full-time benefits with a customer’s willingness to pay is a struggle many BSCs will soon face if they haven’t done so already. So far, the union’s master-agreement approach has created market saturation that protects signatories to the contracts.

If the economy continues its downward spiral, however, some BSCs fear things could change. Aetna Building Maintenance in Columbus, Ohio, has been signatory to an SEIU contract for 18 months. The contract calls for half of the BSC’s workforce to be full-time by 2010 and 70 percent by 2012.

Offering healthcare to those employees will create a roughly 20 percent increase in Aetna’s costs, which must be passed on to customers. Aetna’s president, Paul Greenland, worries he’ll soon reach the tipping point where cash-strapped customers can no longer afford to exclude non-union shops, no matter the political costs.

“The union’s biggest challenge will be controlling the area and keeping out the non-union contractors,” Greenland says. “I absolutely believe some customers will be willing to fight the union battle because the increases are going to be more than they can afford.”

SEIU is confident in the citywide strategy and points to successes in Cincinnati, Miami and other cities where its contracted BSCs compete on reliability and quality rather than cost. The union also believes it is responsible for lower turnover rates, which improves quality and reduces costs.

“That’s the business argument,” Aquino says. “Now is a time when workers are coming together to stand up for improvements and it’s time to build partnerships. Some of these agreements have been made at the bargaining table and some weren’t made until after periods of strike, long and short.”

Becky Mollenkamp is a freelance writer based in Des Moines, Iowa, and a frequent contributor to Contracting Profits.




POSTED ON: 4/1/2009