“About 54.9% of the overall market in India is for soft services and 45.1% for hard services. The market for soft services comprises a large cluster of companies that provide single services and specialize in services such as catering and pantry, cleaning and housekeeping, security and others. The market for hard services has high prominence in the IT sector as it outsources the work to professionalized and well-equipped service providers. Cleaning and Housekeeping services contribute a higher percentage of the outsourced services followed by maintenance and engineering services and finally security services and others.”
– Frost & Sullivan
From building operational services to cleaning and maintenance, outsourcing the management of entire facilities to an organization that executes this service professionally is fast evolving in India, but it is yet to go a long way to include all aspects of facility maintenance. Having said that, Frost & Sullivan reports, FM market revenues in India are higher than other nations such as Singapore and with the expected influx of major global multinational companies, IT/ITeS/BPO, finance/banking, telecom, retail/malls, and industrial sectors, FS will continue to witness massive investments for the next five years providing a huge potential for cleaning market to grow and evolve rapidly.
Hence a welcome time for investors to invest in FS sector in India!
Facility Services
Challenges
Lack of availability of skilled manpower, technically qualified staff, fluctuating labour cost and integrated services have been deterrent for the sector. This often results into contracts’ cancellation. The established commercial sector shares the major chunk of FS market in India. Telecom, retail and global MNCs such as Accenture, Nokia, Cisco, Microsoft and IBM have driven the facility services from the front, but then these companies do expect the highly integrated services and technical knowledge. Unorganised local players not looking for long term gains, agree to work at small profit margins forbids to flourish a healthy FS completion in the market.
Growth Opportunities
JVs are being seen as strengthening both, quality and much needed investment. According to Frost & Sullivan, the FM industry is all set to enter the next phase of the market life cycle, the development stage. Industry participants are looking for unconventional areas to expand their growth prospects. The market is poised to grow at a stupendous rate and offers huge area of growth for FM companies. Demand for both hard and single services is expected to remain strong as end users value the experience and professional service that these providers can offer.
Tapping Cleaning potential in FS
BSCs purchase 56% of their products and equipment through sanitary supply distributors. Chemical spending accounts for 35% of all contractor purchases. Paper/plastic products, 33%; power equipment, 18% and so on.
While the majority of contractors suggest they maintain at least two supply relationships in order to guarantee price and availability, a common practice is to split purchasing between core supplies by product category with the bulk of equipment or paper goods coming from one supplier and the remaining chemicals and/or tools delivered by another. Some BSCs opt to purchase a majority of cleaning equipment and supplies from one distributor and use a second as a backup or specialty supplier.
In addition to products, most BSCs tap into a distributor for value-added services that include:
• Product training
• Access to material safety data sheets (MSDS)
• “On-time” delivery strategies
• Warehouse storage strategies
• Product availability after-hours or in case of emergencies
One recent industry study revealed that, beyond the traditional contractor/distributor arrangement, 17% of products are purchased directly from manufacturers – while 11% of purchases are made through wholesale clubs, and 11% from retail outlets or “big box” stores. Educational facilities – specifically K-12 schools – are also seeing a rise in outsourcing as more state-funded school districts are reducing expenditures.
As more facilities outsource their services, contractors are also finding that large owner-occupied facilities and property management firms are paring down their lists of vendors to a select few service companies. As a result, many BSCs are diversifying their services beyond cleaning. Popular diversified services include:
• Carpet cleaning
• Floor care
• Window washing
• Security
• Pest control
• Matting services
• Graffiti removal
• Fire and water restoration
BSCs often will subcontract certain “specialty” work to subcontractors – primarily because facility management operations tend to purposely limit the number of service vendors they work with. Similarly, national firms may subcontract geographically, using local firms around the country.
Manpower Challenges
Some of the roadblocks to finding quality workers include:
• Lack of transportation – Some potential workers don’t have their own means of transportation to get to sites and they would be working at night when access to public transportation is limited.
• Screening problems – More sites are requiring drug tests and background checks, which rule out some entry-level applicants.
• Remuneration – Workers deflect even with a small hike in their wages.
• Accommodation – Workers applying from other regional areas, expect food & accommodation.
• Diminishing work ethic of young workers – The new generation
entering the workforce does not hold the same values as their counterparts and does not see cleaning as a credible job.
• Peter Principle – Employers want to promote managers from within the ranks, but often a good cleaner doesn’t necessarily make a good manager and employees are promoted without the proper management skills.
While it is difficult to attract quality workers to the industry, it is even harder to retain them. Some companies experience turnover as high as 400%. With the uncertain economy, more janitors are holding onto their jobs, causing turnover rates to drop lower. A recent survey reported turnover as low as 34%. Supervisory turnover generally runs about 16% annually. With staff changing over frequently, contractors look for products that have multiple uses so workers have to be trained on fewer products with less chance for error.
Infection control/green cleaning
Infectious bacteria and pandemic scares have spotlighted cleaning’s role in improving building occupant health in the public eye. Proper cleaning procedures can help prevent the spread of Methicillin-resistant Staphylococcus aureus (MRSA), Vancomycin-resistant enterococci (VRE), Clostridium difficile (C-diff), avian influenza (H5N1), swine flu (H1N1) and even the common cold. Along with encouraging building occupants to wash their hands, a cleaning-for-health programme that cleans and disinfects commonly-touched areas such as doorknobs, computer keyboards and light switches safeguards against cross-contamination and significantly reduces the spread of disease by 99.99%. Also, implementing colour-coding systems for products and touch-free fixtures in restrooms has helped to reduce cross-contamination in facilities.
The products BSCs use also have an impact on the environment. “Green” cleaning can be applied to nearly every aspect of a cleaning program. More product categories are offering green alternatives, including:
• Daily cleaners that emit lower levels of volatile organic compounds (VOCs)
• Floor finishes and strippers with fewer VOCs that lack heavy metals such as zinc, which can be toxic to aquatic life
• Paper products made with recycled content
• Soaps that are biodegradable and use recyclable packaging
• Vacuums that capture significant amounts of soil from carpet and prevent dust from being released into the air
• Floor machines that use less water and chemicals and are also more durable with longer lifespans to reduce overall waste
• Enzymes, aka biodegradable proteins that “eat” away deposits on drains and pipes to prevent odours
• Brooms and mops made from recycled plastic bottles and use handles constructed from bamboo
• Microfiber cloths and mops that require fewer chemicals and water to clean
• Disinfectants: Currently disinfectants are classified as pesticides and therefore cannot be labelled green. However, there are options that are not as harsh as traditional products including those that have a neutral pH, fewer VOCs, are butyl-free or hydrogen-peroxide based. The EPA is working on a pilot-programme that one day may allow manufacturers to promote green claims on labels and packaging.
To help limit the confusion about green products and to counter “greenwashing,” third-party organizations are certifying products:
• Green Seal: Certifies a number of product categories, several of which apply to janitorial including: GS-37 for chemicals, GS-40 for floor-care products, GS-41 for soaps and hand cleaners, GS-9 for towels and napkins, GS-1 for tissue products and GS-42 certification for cleaning services;
• GreenGuard: Certifies cleaning products that improve indoor air quality;
• Seal of Approval: The Carpet & Rug Institute’s green certification for vacuums, carpet extractors, carpet chemicals and full carpet-care systems;
• Design for the Environment (DfE): Offered by the US Environmental Protection Agency (EPA), DfE is not a certification, but a rather a partnership with companies that voluntarily commit to incorporate environmental considerations into their design process.
Green products are also safer for users and building occupants. Based on a recent survey of BSCs, 81% of respondents use green products and of the 19% who don’t, 70% of those claim they plan on switching to green in the near future.
The most commonly used green products include general-purpose chemicals, carpet chemicals, paper products and microfiber.
Building off the green movement, sustainability is the newest environmentally-conscious trend. BSCs are taking a holistic approach and greening their operations. From LEED-certified headquarters to hybrid fleets, BSCs are proving to customers they can “walk the walk” when it comes to green.
Safety
Janitors one of the most injured workers. On an average there are 3.6 injuries per 100 full-time workers. Common injuries include muscle and joint injuries, repetition stress injuries and slip-and-fall accidents. To ensure a safer work environment, BSCs can use ergonomically-designed equipment and green chemicals; supply proper personal protective equipment; keep up-to-date records of MSDSs; and provide training that is easy to understand for bi-lingual, non-English-speaking and illiterate workers.
Business technology
Just a few years ago, simply having Internet access was considered progressive for BSCs. Today, however, the majority of cleaning contractors are “e-literate” and aggressively use the Web to promote their business. BSCs who have embraced e-commerce use the Internet to purchase their products and supplies from vendors.
Tech applications have expanded beyond the Internet and many BSCs apply cutting-edge technology to other areas of their business:
• Computer software to tabulate work-loading and bidding formulae
• Cell phones and push-to-talk devices to communicate on-demand with employees and customers
• Digital cameras to document accidents and errors during inspections
• Smartphones, personal Digital Assistants (PDAs) and hand-held computers that use onscreen checklists during building inspections
• Portable MP3 players and portable DVD players to run on-site training videos
• Global positioning system (GPS)-enabled devices to track vehicles and improve timekeeping
• Social networking Web sites to correspond with colleagues and find job applicants
The above report is based on white paper published by Contracting Profits
Compiled by Suprita Anupam