Service Segment
Poor profit margins, inte
nse competition, lack of skilled labour, increasing turnover and insufficient agreement terms continue to affect the stability and growth of the contract cleaning segment. Adding to the concerns is the high rate of employee turnover in the cleaning segment, resulting from better paying low-skill jobs and migrant workers settling for local jobs. The contract cleaning segment being labour intensive, the shortage is impacting upon the wages. In the absence of standardised wage structure, other than the much disputed Minimum Wages, the demand for higher wages in the wake of labour shortage is weighing heavily on the contractors.
As contractors are anxious about the outcome of labour shortage, cleaning industry analysts cautiously expect a positive trend emerging. Skilled labour at higher wages could pave the way for increased mechanisation in cleaning. The slight increase in the demand curve for mechanised cleaning is being witnessed in all sectors, including government, institutional and commercial.
While leading cleaning contractors are experiencing positive change, the industry is concerned over the present market factors that have dealt a major blow on the service segment. Despite the emphasis on meeting international cleaning standard owing to the rising multinational presence in the country, cleaning is yet to find its permanent place in the corporate budget, especially in the commercial and institutional segments. Professional cleaning takes a back seat, even in critical areas like hospitals.
On the one end, cleaning is not given its due importance and on the other, wherever it is given importance, cleaning is not done in the actual sense of the word. Well, is the cleaning segment actually cleaning?
Apart from a few on the top of the ladder, service providers in general, design cleaning to meet cost-expenses. Cleaning has come to become anybody’s business. Fly-by-night operators have increased manifold.
Lack of data on contract cleaning industry and involvement of substantial amount of undeclared workers by the contract cleaning companies are factors that deter analysts from making projections for the market. Another factor is the difficulty in segregating security services companies out of contract cleaning services. Lately, a trend of contracting out a bundle of services to one particular company has been observed in the service segment, rendering it difficult to ascertain the actual size of cleaning services. Cleaning services include cleaning of offices, residences, industries, hospitals, institutions, transport hubs, commercial places, food outlets, interior cleaning of factories, retail outlets and other establishments; industrial equipment cleaning; window cleaning; and disinfecting & extermination services. Added to these services in India is waste management, pest management, water treatment, linen care and others.
The growing need for specialised services by the government in the “L1” category has discouraged organised bidders owing to poor payment terms. Besides, L1 contract has curtailed the scope of quality service or value addition and has merely turned into manpower supply services, which are far from the actual cleaning processes. Payment terms in such cases are purely made on number of man-hours put regardless of the cleaning. Several service providers in the unorganised segment have erected business overnight and are struggling to survive in the cleaning business without actually focusing on cleaning.
The outsourcing trend that has caught up in majority of the segments is running into rough weathers. The expression of mistrust of working as sub-contractors with facility management companies in the outsourcing model is looming large. Sub-contractors cite causes of delayed payments, unfair business practices, and lack of ethics in the outsourcing business with FM companies.
There is much being disputed over the concept of cleaning during working hours. Similar to international cleaning patterns, over four to five decades ago, in India too cleaning was undertaken before and after working hours or during the night at workplaces. This inspires the use of cleaning machines, lesser staff deployment during working hours and eliminating the concept of day cleaning and full-day staff employment.
While these are some of the issues starkly facing the Indian Cleaning Industry today, which can be overcome through conscious efforts and strategic planning. There are many untapped opportunities to be explored using standard market mechanisms.
