DCS 2017 Canadian Janitorial Market Report
January 12, 2018
More and more of the property managers I talk to are concerned about recent trends in office cleaning, quality is inconsistent and costs are increasing. I also chat with the CEO’s of the major janitorial service companies and they have a similar set of problems, with rising costs and tighter labour markets squeezing their margins.
This was one reason behind the cross Canada wave of janitorial company acquisitions and mergers in 2014 – 2016. By and large the assimilation of corporate cultures, clients and operating systems is now completed, but it created some disruptions.
The bottom line is that with tight labor markets and rising costs janitorial companies continue to have to do more for less. For property managers this means ensuring your RFP’s have detailed cleaning specifications and KPIs, it may also mean the low cost bid is not the best bid, and it may be time to add an external audit provision to help ensure you get the quality you have been promised.
Most importantly, it is in the best interests of all parties to get together to find ways to contain costs, while keeping a healthy janitorial service sector in Canada.
The janitorial industry has been undergoing price compression. With the minimum wage increases some contracts are now economically unviable. DCS cleaning inspections and communication with our clients has seen many significant contracts failing in cleaning service delivery.
Contractors are employing a variety of measures, including capturing absenteeism as margin, increasing workloads, and subcontracting in order to maintain profitable contracts.
Many property managers are concerned about these trends as they are already seeing and experiencing problems
Recent minimum wage increases in Ontario, Alberta and British Columbia have created financial stress for janitorial companies, who are struggling to pass the cost increases through. With additional increases on the horizon this problem will get worse.
We saw a wide range of contract prices for larger buildings in 2017, reflecting the variability and competitive nature of the marketplace. In Ontario, the range is $1.34-$1.74 per square foot per year, in BC the range is $1.32 – $1.70, and as might be expected, costs are lower in Alberta at $1.22 – $1.59.
One recommendation is to use the janitorial pricing tool that was introduced in the CCCA’s Janitorial Industry Best Practices Handbook which is being utilized by leading property managers and DCS. To download a copy, understand the benefits, and see DCS’s recommended contractor management fee chart for property managers.
The International Sanitary Supply Association [ISSA] has merged with the Canadian Sanitary Supply Association [CSSA], which should be a win for the industry. ISSA is the largest cleaning Association in the world representing equipment and material suppliers.
The Canadian Commercial Cleaning Association, [CCCA] is considering how to maximize collaboration with the ISSA to serve our industry. BOMA Canada with their BOMA BEST program adds significant value in creating operational standards in their buildings that dovetail with cleaning inspections and best practices.
In early 2018 DCS will formally launch our OfficeMax© program to further streamline the cleaning industry and provide property managers with cost savings of 8% – 12% while maintaining and guaranteeing quality.
If you are having cleaning issues with your building or planning a major cleaning RFP in 2018 contact us for a free consultation.
Randy Burke, CEO
Andre Ladouceur, VP Canada
DCS Global Enterprise Canada Inc.
Suite 205, 5240 1A Street S.E.
Calgary, AB T2H 1J1
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