ECJ EUROPEAN Cleaning Journal

Thor Nielsen is marketing and purchase manager for Insider Facility Services, which operates in 12 cities in Norway. The company specialises in a broad spectrum of services in shopping malls, office buildings, airports and aircraft, and has its own development programme for staff. Nielsen writes about the trends and characteristics of the Norwegian market.

The total market in Norway is worth around €2 billion. According to The Confederation of Norwegian Service Industries (NHO Service), the total surface in commercial buildings is estimated at 102 million square meters. Sixty-one per cent of the total market is competitive, which represents a market value of €1.2 billion.

In recent years, the trend is that more of the public sector market is being outsourced to private companies.

As of January 2107 there are 3,879 officially approved businesses. Out of these businesses, 1,737 are officially approved with staff and 2,142 are approved without staff. The Norwegian Labour Inspection Authority has 6,905 companies which have applied to become approved - they have either been approved, rejected or are being processed.

Registered status

There are 1,254 businesses which are still active and registered with the status ‘not officially approved’. This means they either have had their applications for approval rejected or have had their approval revoked. When approval is revoked, it could be because the business has not fulfilled the requirements for official approval. In 2016 564 businesses were not approved.

There are many small businesses and only a handful companies offer their services all over Norway - many operate within just one county and sole traders account for 70-75 per cent of cleaning companies. Because of this the larger cities in Norway, especially in the south see fierce competition between companies. That means there is intense price pressure. The economic changes in Europe have also affected Norway and that has meant customers wanting to reduce costs, sometimes by reducing daily cleaning frequencies.

Encourage training

Companies in Norway encourage cleaners to take internal and external courses, and they will invest resources and time in educating new employees (some provide bonuses for doing internal courses, with an increase in salary above our industry collective agreement). Getting more cleaners to take these courses will become more and more common and important if firms intend to bid for major tenders, especially public tenders. This is because NHO Service promotes NS-INSTA 800 standard towards public purchasers as a requirement.

One of the market’s main challenges is the number of unprofessional companies providing services way below what approved companies can match - price pressure and social dumping is a serious problem. With larger tenders (public and private) the lack of knowledge in the purchase chain means many purchasers end up choosing the lowest price. The Confederation of Norwegian Service Industries has introduced a tool for purchasers, a highest value system, but it is not used often enough.

The view from economic experts  for 2017 is not as bleak as for 2014-16, but the Norwegian economy has felt economic instability, specially from the oil industry, which has had drastic consequences in certain parts of the country.

Validation of companies

The most important development for our industry is the Validation of Cleaning Companies (Godkjenningsordningen). These regulations came into force in September 2012. This regulation requires all businesses that wholly or partially provide cleaning services to apply for approval.

Approved establishments are registered in a central repository, where it is easy for purchasers to find approved companies. The regulation prohibits the purchase of cleaning services from unapproved cleaning businesses. Businesses can go to arbeidstilsynet.no and type in a firm’s name and information on status will be shown.

This is obviously a very positive development, however the Norwegian Labour Inspection Authority have not promoted these  changes well enough and recent surveys show only 50 per cent of clients are aware of the regulations.

The industry has - through Agency for Public Management and Government and The Confederation of Norwegian Service Industries, developed a standard template for purchase of cleaning services. The contains all documents one needs to create a complete tender.

Useful tool

The Confederation of Norwegian Service Industries also has created ‘the highest value principle’, a useful tool to find out which offer provides the best value, and thus the most economically advantageous. The system guarantees equal treatment of bidders and transparency in the procurement process, so more and more public tenders are evaluated on this principle rather on just the lowest bid.

As with most other countries, cleaning jobs seem to be the easiest way to integrate for migrants. Every cleaner in Norway who works for an approved company has to have a cleaning card (HSE-card). From these statistics, around 40 per cent of employees are Norwegian and 60 per cent are from other countries. The nations most represented are Poland, Lithuania and Thailand.