Where Do You Stand?

Heading into 2002, many business analysts warned that the U.S. could be in for a lengthy recession, exacerbated by the events of Sept. 11. Some industry pundits warned housekeeping staffs to prepare for budget cuts and outsourcing.

As the first quarter winds down, housekeeping decision makers are seeing a different take on the economy and its affect on in-house operations. Many managers say it is affecting them less than originally anticipated — if at all.

That’s not to say industries employing in-house cleaning staffs haven’t been hurt by the recession. Some have had it tougher than others. But the most creative managers have learned that their hard work long before the recession has lead to sustained efficiencies and a lot of salvaged jobs — in spite of the downturn. Others still are learning that lesson.

Not your typical recession
“We’re finding that a lot of what is happening around the industry is local rather than national, increasing the need for local networking to help housekeeping directors better understand how to address their situations,” says Sid Pittman, president of the American Society for Healthcare Environmental Services. At Halifax Medical Center in Daytona, Fla., where Pittman is quality coordinator, a hiring freeze has lifted, and for the last two months, business has improved.

“I truly think we’re out of the rough water,” he says.

The custodial department of the Buffalo, N.Y., school system also is doing well despite recent district budget overruns. In this case, it’s because the department already was running so efficiently that the district turned to other departments when trimming staff, says director of school plant operations Paul Rebholz. In fact, when the school board asked a consultant to review district operations a few years ago, and the evaluation recommended leaving custodial operations alone due to the department’s successful structure.

Rebholz made his case with plenty of research to show what the district was paying for. Streamlined product use and a decentralized management structure also helped him prove efficiencies.

“It’s well documented how many people we have, what we do and what the cost is, and I really believe we couldn’t function this well without all that,” he says. “Fortunately the staff, students and parents have gotten accustomed to our high level of quality and expect that level of service, so we have proven our value to the system.”

Nassau University Medical Center in East Meadow, NY, is another example of how challenging times are leading to improvements for in-house housekeeping departments. Nassau has been running on a deficit for quite some time, but now is on a privatizing plan to move from a county-run facility to an independent not-for-profit organization in the next few years. As part of the process, the hospital chose to reduce housekeeping costs, but did so by bringing cleaning in-house in January.

Dennis Oehl, a former cleaning contractor turned consultant, was hired to run the department for the next six months. Already, the place is cleaner than it had been.

“At the moment, we’re not cleaning everything as well as I’d like, but ... [after four weeks] the place looks better, the staff is more professional and we’re going to get cleaning back to where it should be by the end of this transition,” says Oehl.

He also is bringing many people back as part-time help who originally were let go when the change first took place. And he’s educating supervisors to make sure that long after he is gone, the department will remain efficient.

At General Motors Corp., where plans recently were announced to cut salaried work force by 10 percent and to shut down select plants, many housekeeping departments remain untouched.

Many more custodial and environmental services departments Housekeeping Solutions surveyed say their organizations are either holding steady or growing in 2002 — leaving them with equally positive outlooks on the year and the chance to increase efficiencies on their own terms.

“There’s always a downturn in the food-processing industry when there’s a recession,” says Rick Bremner, manager of office services for Hormel Foods’, Austin, Minn. headquarters. “But people still have to eat even if they aren’t doing it in restaurant as much, and we still have to clean our facilities. So we’re continuing to operate as normal and the company probably will keep growing this year.”

U.S. getting back on track
Backing up this positive outlook is a recent report from the Conference Board, the group charged with tracking U.S. economic indicators.

The Board’s chief economist, Gail Fostler reports that a U.S. recovery is imminent, with big profit gains complimenting slow growth. Current productivity gains also are the largest during a recession in 30 years, according to Fostler, and the technology sector is a primary catalyst in pulling the country out of its current slump.

Another reason housekeeping is likely to stay under the radar at the moment is that many facility executives have been more preoccupied with improving disaster preparedness and security measures following the events of last year, says Donald Young, vice president of communications for the International Facility Managers Association. So housekeeping may not see as many budget increases because funds are going elsewhere, but budgets definitely aren’t being trimmed in most industries either, he explains.

Not everything is smooth sailing
While the economy is strengthening and signs point to improved economic conditions later this year, some sectors still are trying to recover from the slow-downs they experienced as early as last January. Many of these industries report they were well into a recession prior to Sept. 11 and terrorist attacks delayed a potential turnaround.

One of the hardest hit is the aviation transportation industry and aerospace manufacturers, which were slowing down well before Sept. 11. When travel halted and then business was lost following the terrorist attacks, it only made a tough situation worse, says Don Warner, director of facilities, health safety and environmental at Honeywell’s Redmond, Wash., facilities. The company is a major supplier of black-box and other avionics technology to the airline industry and it made janitorial cuts for the first time this January.

Air-travel-related fields expect to have tough times at least until 2003 if not as far out as 2005, he adds.

On the other hand, the U.S. hospitality industry, also closely tied to travel, has rebounded much faster than analysts originally estimated, according to the American Hotel and Lodging Association.

Destinations relying heavily on long-distance travelers suffered most last fall, but now are operating near or above normal levels, says Van Heffner, president of the Nevada Hotel and Lodging Association. Las Vegas hotels laid off about 15,000 workers late last year, but then began bringing people back to work as it recorded one of its highest New Year’s seasons in years. Plus, convention bookings and regional travel has remained strong throughout the last 6 months in almost every geographic area of the U.S.

The sector experiencing the most anemic economic outlook right now likely is public-run institutions, says Ann Kempski, associate director of public policy for the American Federation of State, County and Municipal Employees (AFSCME). A recent National Governor’s Association (NGA) study reports that even before the Sept. 11 attacks, state and local tax revenue growth was at the slowest rate since record-keeping began in the 1950s. And those revenues are expected to be flat or down this fiscal year. Another factor affecting many local governments is increased employee benefit costs due to less Medicare and Medicaid funding.

As of December, the NGA reported a collective deficit of $40 billion and expected that number to rise by another $10 billion before summer, says Kempski. Adding fuel to the fire is the fact that state funding is a very low priority for the Bush administration right now, leaving most local governments to fend for themselves if they are over budget, she adds. Some states already have made major budget cuts for this year, and some have targeted support staff such as housekeeping.

“There is plenty of talk of privatizing these services but that is a misguided solution for a number of reasons,” she says. “To put housekeeping out to bid you need to create a request for proposals, comply with government procurement rules and conduct fair bidding processes which doesn’t realize a savings even though employees have been let go.”

Word to the wise
While many organization have undergone budget cuts, some still have found ways to downsize with the least amount of staff attrition or lowered morale.

Honeywell’s housekeeping operations havehad to make cuts for the first time, as part of a company-wide attempt to counter reduced business. Honeywell also initiated a company-wide wage freeze for the next 12 months.

Warner was able to network with a local company that had made similar changes. One of the measures borrowed for the cross-town neighbor involved trash removal changes. Honeywell building occupants now go two days between trash and recyclable pick-ups and are asked to deposit food and other wet items into a 32-gallon drum located in common areas in each department.

The change has trimmed about two to three people from the staff of 15 serving the Redmond facilities, which will save Warner about $80,000 annually. Warner says company-wide e-mails explaining the change to occupants helped smooth the transition, as did regular meetings with staff where they were given a chance to ask questions and voice their opinions.

“Rallying your people and letting them express themselves is 50 percent of the change process,” he says. “And be honest about your own situation and feelings with employees so they see that you are human too.”

When Halifax Medical Center froze hiring last year, rather than lay off workers, natural turnover helped reduce staffing. But throughout that process, Pittman never cut any of the department’s employee incentives. The department continued to offer bonus gain-sharing checks and longevity bonuses.

“You should never cut that from your budget because it’s even more important during reductions,” he says. “Most often administrators recognize the need to increase morale because they are trying to do the same thing across all departments.”

Other tips: Attend association meetings, work more closely with other members of a corporate group; or create peer networks amongst friendly competitors, to learn new ways to increase efficiency or save costs, says Pittman.

“Trade shows are vital because they allow you to review the new technology necessary to help work better within tighter budgets, so you can’t stop going to those,” he says. “But if you can’t afford to send as many people if travel budgets are cut, then send them to local meetings.”

And housekeeping directors shouldn’t forget to utilize their suppliers to help identify reasonable places to reduce costs. This doesn’t have to mean less effective products, but it can mean reducing the number of chemicals to a more manageable inventory, finding faster, better quality supplies and other labor-saving tactics. After all, says Pittman, these distributors are working with multiple customers who could be facing similar reductions and have found good ways to get the job done.

If a facility is under union contract for housekeeping, Heffner suggests working closely with union representatives to try to work out the best deal possible for both sides because it can save jobs. Some Nevada hotels had to lay off workers because their union contracts didn’t allow for reduced hours. Many of those people were rehired after the initial tourism slump last fall, he adds.

Early retirement and raise postponement helped Iowa AFSCME workers keep their jobs during a recent budget reduction, says local president Jan Corderman.

“Our rationale was that if staff was going to be cut it was better to let them volunteer first and our members felt that if they could save some jobs by delaying their raises it was worth the risk,” she says.

Another tactic that often helps government workers reduce job cuts is educating the public they serve. Many times it’s the taxpayers who can influence the local governments most to help protect jobs they find necessary.

“Our members always are first on the chopping block, which is unfair since they still have to maintain sanitary standards to protect the public in schools, hospitals or other areas,” Corderman says.

That education process still requires detailed documentation of the square feet cleaned and what it takes to do the necessary tasks to properly clean it, she adds.

The Davenport, Iowa school district, the state’s third-largest, recently took a big cut in its custodial and warehouse staff with layoffs and reduced hours. Two schools eventually were closed, which reduced the staff even further.

“If you know facilities are closing, then explain how that can naturally reduce staff rather than have staff hit even harder when it’s already down,” suggests Bob Spring, a supervisor on the staff that was cut and president of Local 751, which represents the district’s workers.

“And if they cut back that much, administrators need to know what services they won’t receive anymore,” he adds. The Davenport district has set cleaning standard levels to help define what expectations exist with different staffing scenarios. Level 1, the highest quality level, was where the district was cleaning 10 years ago. Now, staff cuts have forced the department to work at Level 3, which means less detail and project work is done.

Often classroom cleaning becomes a “dash-and-trash” scenario so that custodians can still do other duties such as support for set-up and tear-down for school events after hours, says Spring.

And housekeeping directors who are spared from budget cuts still need to keep on their toes, as Buffalo School District’s Rebholz recently learned. The best way to stay off the chopping block is to show your value and prove that you don’t need someone else to tell you when to be more efficient, he says.

To keep fresh, the department holds annual in-service meetings, union-run meetings and manufacturer’s representative workshops to help educate and involve workers in the housekeeping process. And Rebholz makes sure the housekeeping standards are updated when necessary to maintain efficiencies.

Sometimes, other support services come under the budget-cutting knife and eventually impact housekeeping. The Buffalo school district maintenance staff recently was reduced and Rebholz is working to keep deferred-maintenance issues from impacting his staff’s productivity levels.

“It likely will hurt us down the road if things build up, but we’re going to try to stay efficient as long as we can,” he says.