When a facility manager or MRO buyer is contemplating a new janitorial vendor, the most important item in the proposal is the janitorial wages. If the wages are wrong, the proposed price will be drastically different than the reality. And when this happens, no one’s toilets get cleaned.
1. The cost of labor is the biggest part of a proposal bid.
The cost of labor is most of the proposal price, sometimes reaching as high as 85%. There are two components of labor pricing: Estimated man-hours and wages. Obviously in the equation, the wages is the multiplier. Looking directly at the wages number in the labor equation will tell a potential customer exactly where a potential vendor is spending most of the money. If this number is too high, the price is unaffordable. If this number is too low, although the final price might be good on paper, the vendor will have a difficult time hiring at such low labor rates. Which means: Dirty bathrooms, overflowing trashcans, and no toilet paper in the ladies bathroom.
2. The wages have a direct impact on the quality of labor.
Just imagine, would you clean toilets for minimum wage? Also, ask yourself, if you were cleaning toilets for minimum wage, how much would you care about the cleanliness of those toilets? This is just the way it is. An employer must pay their people well in exchange for hard work. And although you are not prepared to pay this, imagine how clean your toilets would be at $20 an hour! If the wage rate is too low, then the cleanliness of your building will also be low.
3. Wages, no matter the industry, must be geography specific.
A barista in an inner-city café is expecting more on the hour than a barista in a small-town café that closes at 2pm. When considering vendors, it would be important to know exactly how much they are planning on paying their team. As an employer yourself, you would understand how difficult it is to find people at certain wage rates. So, the question is, can a janitorial company find people at their proposed wage rates?
No matter how good the proposal number looks on paper, or how under your budget number it is, you’ll be shopping vendors sooner than you’d like, because of turnover and how poorly the cheapest vendor has performed.
In any type of MRO purchase, the budget number and the proposed price play a huge part in the decision process. Anyone that thinks that budget numbers and proposed price are irrelevant in MRO purchasing has their head in the sand. A quick examination of the proposed wage rates of workers should be a deal breaker of facility managers and purchasers. Whatever the wage might be, if you cannot hire at that wage, you cannot clean, and if you cannot clean, you cannot do the job.