Cleaning service companies - we must adapt

3rd of May 2012
Cleaning service companies - we must adapt

Writing exclusively for ECJ, Andreas Lill from the European Federation of Cleaning Industries (EFCI) addresses the topic: ‘cleaning and building service companies must do more to adapt to clients’ changing needs in the face of economic difficulties’.

Cleaning service companies are increasingly forced to adapt to clients’ changing needs in the face of economic difficulties. Contract cleaning has grown steadily over the past 20 years, mainly as a direct consequence of outsourcing of services in administrations and companies. The industry responds to fundamental needs of the society such as cleanliness, hygiene (particularly in hospitals, food industry, schools, etc) and protection of the environment. It represents, in economic and social terms, one of the most dynamic areas of corporate services in the European Union.

This dynamism of the sector is directly translated in terms of regular job creation. Indeed during the last 15 years, the industry recorded an annual growth of about 10 per cent on average. According to the last figures provided by European Federation of Cleaning Industry (EFCI) member associations, more than 160,000 cleaning contractors, which are in majority small and very small organisations, employ close to four million workers with an annual turnover of about 65 billion euros.

In addition, markets have continuously developed towards a more global and integrated service delivery. Furthermore, a continuous diversification of activities towards integrated services and facilities management can be registered. This is increasingly pushing in particular larger companies to offer their clients facilities management and support services rather than simple cleaning services. For smaller companies, especially SME’s, this trend results in an increased pressure to offer more specialised cleaning services next to office cleaning.

Focus on client needs

This rather positive picture of the last 15 years however changed with the emergence of the economic and financial crisis since 2008. The crisis forced the industry as a whole to adapt and focus more on the needs of its clients. As a consequence of the crisis which is unfortunately still ongoing in many European countries, clients generally ask for even more ways to save money on their service contracts, and this by either reducing the price or the frequency of the service provision. It is needless to say that this is painful for contractors in a market which is already price-driven with low margins.

On the other hand, every crisis offers its opportunities. As cleaning contractors were and are still forced to adapt to their clients’ needs, they have developed new ways of delivering services during recent years. One way is for sure to help clients through the crisis by accepting a reduction in service frequency. At the same time, service contractors have evaluated the possibilities of additional outsourcing of services that the client is still providing in-house.

This can be achieved by giving concrete proposals for outsourcing of 'non-standardised' services through a profound analysis of all clients’ activities. Contractors have in this way created more customer-oriented long term relationships with clients, which allow them to be seen as partners rather than just single service providers.

Incentive to diversify

Another way to respond to the crisis is to use it as incentive for an increased diversification of activities. There are indeed many contractors that made use of the economic pressure from clients to rethink their business strategy and to consequently rectify their existing business model. This either resulted in acquiring the means and knowledge for other specialised cleaning services, such as cleaning of public transport, schools, hospitals or commercial sites. Or it resulted in expanding the existing business model to other services, such as gardening and reception services, catering, security, waste management etc.

Both strategies have been often combined and furthermore many companies used the existing single market in Europe to go beyond borders. This expansion is either realised through the temporary provision of cross-border services or through establishment in other countries.

Finally contractors have exhaustively reshuffled their internal organisation. This first of all resulted in increasing internal efficiency through synergies and integration and thus reducing internal costs. Moreover customer-oriented systems have been put in place in order to proactively respond to clients’ needs. Furthermore quality and reliability schemes were established in order to demonstrate how provided services can contribute to a better performance of clients’ core business.

Last but not least, contractors made use of the increasing demand from clients to sustainability through the introduction of lifecycle thinking. This results in many ways to preserving the environment by a better use of recycling products, low electricity machineries, reduced water consumption, etc.

All these examples demonstrate how cleaning contractors are responding to the difficult business environment they are operating in. The core capacity of services companies, which is people management and flexibility, is therefore best suited to respond to the economic uncertainties of their clients.

Through the recognition of new business opportunities and the constant push to flexibility - and this within the own organisation but as well towards clients’ changing needs - cleaning and facilities management companies are best suited to establish and maintain long term customer-related relationships and to preserve a well-established business model.

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