Minimum Wage Increases To Impact Cleaning Industry

Whether the minimum wage increases will have a good or bad impact on the professional cleaning industry is uncertain at this time.  But here are steps contractors can take to help address this situation now.

Ontario’s New Minimum Wage Increases and You

It’s no doubt the new minimum wage increases in Ontario are going to make life a bit more difficult for many cleaning contractors. The hourly rate jumped to $14.00 this year and will go to $15.00 next year.

According to Robert Bertuzzi, president of Reliable Maintenance, a cleaning service in Northeastern Ontario, one of the key problems is that many cleaning contractors have multi-year contracts with their customers. “Most of those contracts have a fixed price. When you have a fixed price, [you] don’t have the opportunity to go back….and change the price.”

Further, Bertuzzi notes that even when he discusses the minimum wage situation with some clients, they quickly notify him there is “no budget” for an increase in cleaning costs.

“I don’t see it as a good thing [for the cleaning industry].  I see it as a loss of employment for people in our industry,” with many people eventually going on government assistance.

While many economists agree with Bertuzzi that higher minimum wages may have a negative impact on businesses, especially when they go up so quickly, others believe that over time, they will help improve the Canadian economy.

For instance, Dr. David Robinson of Laurentian University, says that eventually, higher wages bring more money into the community, strengthening the local and national economy.

Whether the minimum wage increases will have a good or an adverse impact on the Canadian economy, and specifically on the professional cleaning industry, is uncertain at this time.  But what we do know is that there are steps contractors can take to help address this situation now.

Among these are the following:

Update contracts.  Add clauses to long-term cleaning contracts that allow you to make price adjustments if minimum wages do increase

Benchmark cleaning. Using tools such as ISSA’s 612 Cleaning Times, contractors can determine how long it should take cleaning workers to perform specific cleaning tasks. Then see how your crew measures up. In some cases, more training may be needed to speed worker productivity

Bring cleaning workers into the picture. Many times, contractors try to test new cleaning procedures or products to enhance worker productivity, only to find cleaning workers resist the changes. Explain to workers why the changes are being implemented, why they are needed, and ask for their input and their help. This invariably will have a more beneficial result.

Update cleaning methods. Too many facilities are still being cleaned the way they were cleaned 40 years ago. Contractors certified by ISSA’s Cleaning Industry Management Standard (CIMS) and CIMS for Green Buildings have been thought “best practices” designed to boost worker productivity and clean more efficiently

Look for ways to reduce supply costs. Conduct product audits and eliminate less effective, poorer performing cleaning solutions. Also, do not select multiple cleaning solutions designed to do the same or a similar cleaning task. Having fewer cleaning solutions has many benefits and often it allows contractors to purchase products in larger sizes, invariably resulting in cost savings.

Install auto dilution systems. These systems are designed to precisely measure how much cleaning solution is needed for each task, helping to minimize waste.

Look at the price tag… last. When selecting cleaning equipment, instead of looking at the price tag first, look at it last. Your first job is to find out if the equipment can improve worker productivity, if it can reduce cleaning times, and what the return on the investment will likely be.  Sometimes more costly cleaning equipment pays for itself in just a few months.  After that, it pays dividends, month-after-month.

Decide how much each customer is worth. Evaluate each customer based on the profit margin derived, not on how much they are spending on cleaning. The profit margin on some high-paying clients can be so small, it may not be worth having them.  If they do not allow you to increase your charges, consider replacing them with two or three smaller clients with a higher profit margin.

 

Avmor is here to help cleaning contractors adjust to these new minimum wage increases in Ontario and throughout the country.  For more information, please feel free to contact us at [email protected].

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