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Current state of the Dutch cleaning industry18th of May 2015
The latest contribution from Dutch correspondent Nico Lemmens offers a brief overview of the current state of affairs in the cleaning sector.
During the last few years we have seen the introduction of the Code for Responsible Market Conduct as well as the Cleaning Quality Mark. The latter was introduced by OSB, the Dutch association of cleaning companies. Both have become well established since their introduction.
OSB lost a number of members because of the Quality Mark, but some of them have now renewed their membership. During the last few years the body has made substantial progress in improving the industry’s image and in fighting price pressure. However, it remains to be seen whether this progress is sustainable.
Prime minister Rutte’s cabinet is still alive, and so is its insourcing policy, which has been heavily criticised by the cleaning industry. Recently, however, those critics were joined by Roel Bekker, a former secretary general in several Dutch ministries.
Bekker pointed out the government’s insourcing policy is not being followed by the Dutch municipalities. They prefer social return based outsourcing. And, according to Bekker, rightly so. Insourcing will result in loss of efficiency. Not only that - according to the coalition plans, civil servant fringe benefits will be stripped. One should not be surprised, were a next cabinet to put an end to this insourcing policy.
On July 1 2014 the Dutch senate agreed to the so-called Participation Act. That same day a proposal for a Quota Act was sent to the second chamber, the legislative part of Dutch parliament. Both laws are about employing people with a so called ‘distance to the labour market’. Employers are required to employ a certain minimum number (quota) of such people. Both acts came into effect on January 1 this year.
These laws constitute a huge opportunity for the facility services sector in general and the cleaning sector in particular by delivering added value to their customers in realising the required quotas. The cleaning industry is pre-eminently qualified in creating jobs for the target group. Above all knowledge intensive client organisations
On the purchasing front best value purchasing is gaining ground. More and more output based contracts are used. Traditional inspection is replaced by KPI based contract management. Also hospitality and social return are of increasing importance in demand specification.
Finally, more and more cleaning companies are broadening their scope. Some of them have entered the home care market, while others are broadening their facility services package. This trend has a twofold background. In the first place, companies are trying to escape the commodity trap. Secondly, they want to satisfy the increasing demand for cost reduction and high service quality from their customers. In the end, this can only be achieved by delivering packages of integrated facility services.
Of course there will remain business for single service providers. However those companies which have the ambition to deliver integrated facility services, will ultimately have to make major organisational changes. This is because the traditional business unit model is a major impediment for delivering integrated facility services.