Trimming Your Budget

As businesses of all types struggle to survive, they are hoping spending cuts will get them through the recession. Very often, one of the first departments asked to make sacrifices is housekeeping. Sometimes, the cuts are simply the result of reduced need.

“When a factory or office building loses business or lays off workers, the need for custodial services reduces,” says Mickey Crowe, RBSM/CBSE/I.C.E., consultant and trainer at CLEEnTech Consulting Group.

More often, however, housekeeping is the first approached because it is a big-expense, no-profit department. Slashing the cleaning budget is meant to avoid cuts in other areas that are perceived as more “important.”

“Janitorial services are the second highest cost of operating an office building and they come under security because of that,” says Bob Castronovo, president of Custodial Consultants, LLC in Belle Mead, N.J. “There’s an opportunity for a lot of dollars to be saved by examining those costs.”

In the past, a housekeeping manager may have fought successfully to save his budget. In the current economic climate, however, such a stance could be career suicide. The threat of outsourcing, which has grown more popular in recent years, increases when times are tough.

“Sometimes major corporations look to an outsource company because they can provide more cost-effective pricing because they don’t have benefits packages,” Castronovo says. “As an alternative, the internal program may need to eliminate a few jobs or ask people to cover more square footage per hour to remain competitive.”

Given the current economic climate, which President Obama expects to get worse before it gets better, housekeeping managers would be wise to take a hard look at their budgets, even if building management hasn’t asked for cuts.

Keep Good Records

The only way for a housekeeping manager to honestly assess his program is by using a formal tracking system. The department should identify every task it performs, as well as how much time and materials each requires. Assigning hard numbers to the crew’s work allows the manager to perform a quantitative analysis so he or she knows exact cleaning costs and where there is room for reductions.

Some custodial managers create their own tracking systems using a basic spreadsheet, while others invest in software that does much of the set-up and mathematical work for them. Either way, the measurements are critical. A savvy manager can use the findings to make a case for maintaining current budget levels or as a way to illustrate to management what will change if money is cut.

“When a housekeeping manager has a continually updated set of figures, the cost-benefit of any cut can be shown and substantiated,” says Pat McClure, HLH Systems Business & Industry Cleaning Consultants in Dublin, Ohio. “If the housekeeping manager has done the right homework, cutting costs should be quicker and easier to do because all areas have already been evaluated.”

By identifying and quantifying how workers clean, areas for improvement can be quickly determined. Although reducing staff will bring the biggest savings, there are often ways to increase efficiency without layoffs.

S.O.S. (Save Our Staff)

When money is tight, the gut reaction is to stop spending on equipment but some expenses can pay off. For example, replacing 14-inch vacuums with 36-inch models allows custodians to accomplish more in the same amount of time. The labor savings may pay for the machines, but a manager can only be sure if there is a tracking system on hand that allows for a cost-benefit analysis.

It is also important to regularly inspect and maintain equipment so it functions properly and efficiently. Likewise, the chemicals in the custodial closet should be examined and analyzed. Savings can be found in eliminating supply waste, such as choosing one product that does the job of four, or installing a chemical dispensing station to help control product usage.

Streamlining equipment and chemicals can shave a few dollars off the bottom line and in normal times might be enough to satisfy management. In a recession, however, the changes aren’t likely to meet the demanded cutbacks; staffing adjustments must also be made.

“Labor is the number-one expense and area targeted for reductions, since equipment and supply expenditures are a relatively small percentage of overhead,” says Allen Rathey, president of InstructionLink/JanTrain, Inc. in Boise, Idaho. “Still cuts are often across-the-board in tough times.”

Labor Losses

Unfortunately, supply expenses account for as little as 5 to 10 percent of most janitorial budgets. On the other hand, labor costs (salaries and benefits) typically eat up 75 to 85 cents of every dollar. Therefore, to create real costs savings, reducing staff is almost always necessary.

“I doubt if a housekeeping department can really cut costs without a reduction in labor, either through attrition, a hiring freeze, or layoffs,” Crowe says. “The true test is to find ways of increasing productivity without reducing appearance or cleanliness standards.”

To determine how many employees the housekeeping department can lose without affecting quality, the manager must find ways to make the staff more productive. The changes in chemicals and equipment mentioned earlier can help, but often is not enough.

In lean times, management must make some difficult decisions about critical versus non-critical areas and cleaning frequencies. Expectations may need to be adjusted regarding how often or how thoroughly an area should be cleaned.

“Reexamine your approach to cleaning and get back to the basics,” Castronovo says. “In your own home, the kitchen needs to be cleaned every day, but the nightstands may only need to be cleaned once a week.”

In addition to creating new, reduced cleaning specifications, cleaning managers must also change their demands for employee productivity. A janitor today is expected to clean far more than what was expected just a few years ago and expectations continue to rise. According to Castronovo, productivity has gone from 2,000 square feet an hour in the 1970s to well over 5,000 square feet today.

“Back in 1980 I would have said we were very aggressive at 2,000 square feet, but we just drew up an initiative called the “6,000 Square Foot Initiative” for a large realty company to lower their costs by 10 percent,” Castronovo says. “Necessity has become the mother of invention in regards to controlling and lowering costs.”

To meet heightened productivity goals, housekeeping managers must modify cleaning objectives. Managers must also conduct shift analyses to identify areas for improvement. For example, time savings can be found by creating job cards that outline tasks and routines for every worker and training may be needed to teach employees how to correctly use tools or where shortcuts are acceptable.

Cut With Caution

In an environment where employees are watching friends lose jobs and seeing their own workloads increase, the straw that breaks the camel’s back could well be in the area of benefits. It may be tempting to make cuts in this big-ticket area, but most experts agree housekeeping managers should do so at their own peril.

“Cutting benefits is a wrong-headed approach,” Rathey says. “What works is investing in workers to make them more professional, productive and efficient. One school system implemented a daily morning exercise program for cleaning staff and saw productivity and morale soar.”

If staffing cuts aren’t enough, housekeeping managers can reduce some employees to part-time status, which eliminates some benefit expenses without an across-the-board cut. If things like eliminating 401k matches or cutting family medical coverage become necessary to meet budget demands, it is critical to work with the human resources department to make these changes in the most sensitive way possible.

“A clear and properly stated statement of facts and intentions will go a long way toward keeping employees from becoming disheartened or leaving,” McClure says. “It is imperative that human resources puts in place and maintains an excellent and ongoing communication strategy.”

Help Is Available

This once-in-a-generation financial crisis is painful for everyone, including housekeeping managers forced to meet unrealistic budget demands. It may feel lonely crunching numbers and making tough decisions about employees’ futures, but there’s no reason to go it alone.

Distributors can help a manager meet budgets by reviewing the department’s purchases of chemicals, supplies and equipment to find areas for reduction. They can also set up just-in-time ordering to reduce or eliminate the need for stockpiling. Suppliers can also provide training on best practices for product usage and identify methods to reduce waste.

“A proactive, consultative distributor is worth their weight in winning lottery tickets when they partner with the in-house service provider to find the most effective tools, supplies and equipment to get the job done right the first time,” Crowe says.

Distributors typically provide training and consulting services at no cost, however, their services are limited. For down-and-dirty assistance with the really tough stuff, housekeeping managers can bring in a consultant for a fee. These industry-specific experts are well versed in every aspect of the cleaning business and can help a manager make the department leaner and more effective.

“When we get contracted, people realize they need help,” Castronovo says. “They’re frustrated because they just don’t know how they are going to do it. They are afraid that administration wants them to reduce costs without decreasing quality and they don’t know how to do it, so they reach out to us to guide them.”

Keep A Chin Up

Yes, the economy is in turmoil and no, things probably won’t improve anytime soon. But that doesn’t mean there isn’t cause for guarded optimism, even in this time of doom and gloom.

“There has never been a more exciting time to be in the cleaning industry,” Crowe says. “The challenges are great but there are visionary, hard-working entrepreneurs who are focused on the principles and processes that will take them through this rough patch in the road. With technologies changing every day, the well-informed, well-supported in-house service provider will survive and thrive as they partner with their management team for a win-win outcome.”

Becky Mollenkamp is a freelance writer based near DesMoines, Iowa.