how to find asset turnover

Cleaning dirty toilets and refinishing gym floors isn’t exactly glamorous work. It’s also not the type of career that most children dream about pursuing when they grow up. Couple the down-and-dirty nature of contract cleaning with the perceived paltry paycheck, and it’s no surprise that finding and keeping quality employees is among the greatest challenges faced by building service contractors.

In an industry with turnover rates averaging 75 percent (and that reach as high as 400 percent), it’s crucial that businesses hire the best possible workers and then do all they can to hold on to them. Replacing an employee costs from 25 to 200 percent of his salary, making recruiting and retention programs well worth the investment.

“A successful contractor recognizes that the most important asset in their organization is their employees,” says Peter Criville, president of Shellville Services Inc. in King of Prussia, Pa. “They are the method by which they provide their service, and they create the first and usually lasting impression with customers, which becomes the cornerstone of the company’s reputation.”

The problem

Finding rock-solid employees to serve as that cornerstone is made difficult by a multitude of factors. First, the janitorial industry has long been perceived as being low pay, low reward, and that belief has only been exacerbated in recent years.

“Society says you have to go to college now — there’s pressure not to go into trades or technical school,” says Robert Wendover, director of the Center for Generational Studies in Aurora, Colo. which offers a seminar on recruiting and retaining employees in the new millennium. “There is also a sense in society that hard work is not something to be proud of these days. People don’t want to get their hands dirty.”

Dirty work is made less appealing when it comes with a small paycheck. While it is certainly possible to make a great living in the cleaning industry, particularly as a manager or company owner, many front-line employees are paid minimum wage. Making matters worse are illegal or unethical contractors who drive down prices by hiring undocumented workers for substandard wages. With unemployment rates low in most parts of the country, attracting quality employees to low-paying jobs is an uphill battle.

Other challenges facing the industry include transportation and childcare issues, as well as drug tests and background checks, which rule out some entry-level applicants. Another growing problem is the aging population. For the first time in history, the number of younger workers entering the workforce by 2012 won’t be enough to replace those who are leaving.

“Finding the right applicant can be as difficult as looking for a needle in a haystack,” says Lynn Domboski, director of human resources for Matrix Integrated Facility Management in Johnson City, N.Y.


In an attempt to locate that elusive needle, BSCs often use traditional recruitment methods that don’t always work well. Just because the competitors are using newspaper ads and job fairs doesn’t mean you should jump on the same bandwagon.

“I’m not a big fan of doing traditional things,” Wendover says. “For example, the problem with advertising is you don’t know who you are attracting and it is extraordinarily expensive.”

The key to recruitment, Wendover says, is to identify and then target the exact employee you want. Without that specific knowledge, many BSCs end up settling for whomever walks through their doors.

“What does not work well is desperate hires, just putting an unqualified warm body into a position,” Criville says. “That is a recipe for failure.”

In fact, Wendover says, it is rarely a good decision to settle on a second-rate employee simply for the sake of filling a position. If you are sure a person won’t be around for long, why spend money training him or her just to do it all over again? It’s probably smarter to pay overtime to current employees to fill the gap and take your time finding an employee who makes the grade.

It is crucial that a hiring manager first make an assessment of the exact type of person he or she wants to attract for a particular position. With that in mind, the manager can determine where to look for that person (if promoting from within isn’t an option). For example, if the ideal candidate is entry level and adept at working with his hands, it might be worth a visit to a local trade school to post on a job board or chat with an alumni director.

Making connections with local educators, community leaders and other employers takes time and effort. If the legwork leads to suitable referrals, however, it is a more affordable and productive option than other recruiting methods. In fact, some businesses are so fond of referrals that they pay for them.

“We believe good people know good people so we pay referral bonuses,” Criville says.

In lieu of traditional newspaper classified advertising, many BSCs find greater success using online advertising at targeted sites, such as industry associations or trade schools.

Once you’ve identified candidates for a position, it is important to schedule interviews immediately.

“Timeliness is extremely important,” Domboski says. “You can lose a good applicant an hour after they apply.”


As difficult as it can be to find acceptable applicants, it can be even more challenging to keep them around once they’ve been hired. There are many things a company can do to create an environment that discourages turnover.

The most obvious way to attract and keep employees is to offer competitive pay. There are also a whole host of desirable benefits, each of which comes with a price tag. Make your company more appealing by offering affordable medical and dental insurance, paid vacation and sick days,

a 401k, holiday bonuses, tuition reimbursement, health club membership and incentive programs tied to attendance or safety.

“These benefits help set you apart from your competition and allow you to recruit the best candidates available,” Criville says.

The most popular benefits are typically also the most expensive. But there are also plenty of free and inexpensive ways to reward employees. Flexible scheduling is welcomed by many people, particularly those with childcare or transportation issues. Recognition in all forms, whether it is a simple pat on the back or a small monetary gift, keeps employees motivated.

Perhaps the most effective retention method is to treat your employees’ jobs as careers and to make them feel like an integral part of the team. To teach them about the industry, take them to industry association meetings and give them training on how your business operates.

“Developing an associate to feel self-worth, pride and a sense of belonging to our business is very important,” Domboski says. “Since some are working independently or alone, motivation is a key.”

A good training program should have as its goal the education and the development of employees. If your staff knows there are advancement opportunities within your organization, they are more likely to view their time there as a long-term journey instead of as just one step along their career path.

“A comprehensive training program is vital to a company’s commitment to retain the highest quality workforce,” Criville says. “Our training begins during the interview process when we are hiring a candidate and continues throughout the entire tenure of employment.”


Even a company that offers every possible benefit and has a perfect training program will lose employees. Turnover is a necessary evil and one that will only get worse as the workforce shifts from one generation to the next. Gone are the days when an employee would stay with one company for his entire career.

“Everyone must recognize that the 10- and 20-year employee is gone,” Wendover says. “That is a past generation and they are not coming back. People today are more restless.”

Although you can’t eliminate turnover, you can minimize its negative impact by being better prepared for it. When employees leave, make an effort to find out why. You can use that information to make changes that will prevent other employees from leaving for the same reason.

Exit interviews are powerful tools. Encourage departing employees to honestly state the reasons they are leaving (an impersonal survey may encourage honesty more than a face-to-face interview). If you consistently hear about the same issue, such as low pay or lack of recognition, it may be time to investigate how you can make changes in those areas.

“We know the expense of turnover is great, but it can be controlled,” Domboski says. “People leave and it’s your responsibility to find out the reason why and pursue every avenue to halt future associates from departing.”

Reacting to turnover is important, but so is preparing for it. Managers should constantly assess who is in their workforce, with an eye toward who may be likely to leave and when. If your average employee leaves after six years and you have several people who are in their fifth year of employment, you know there’s a good chance you’ll have some job openings within a year.

“You need to be prepared for that,” Wendover says. “You can’t just assume that because they are working for you and smiling that they are happy.”

If you know employees will be leaving soon, get ready by doing more active recruiting and perhaps even doing some premature hiring or adding paid apprentices to your workforce. Why start looking for new employees before the old ones leave?

“It may cost me money [to do these things], but when the other guys leave, I’ll have people in the pipeline ready to take over,” Wendover says. “If I’m caught off guard, even if I hire someone right away, I still have to take time to train them before they can work on their own.”

“People tell me they want perfect timing, where they hire someone the day the other guy leaves,” Wendover continues. “It’s just not going to happen. Turnover is a cost that you have to build into your system.”

Planning ahead

With so many tough issues facing managers, such as increasing competition and decreasing margins, it’s easy to drop the ball on the issue of employee recruitment and retention. But that’s a mistake that will only end up costing more in the long run.

“We all should care about this issue because it has a direct impact on the success of our business and how consistently and efficiently we operate,” Criville says. “It means the difference between success and failure and our reputation in the marketplace.”

Most BSCs understand the costs associated with high employee turnover. From paperwork and background checks to training and uniforms, the expenses can be astronomical. But there are other costs that are not as readily identifiable, but are just as important.

“The real cost is with the customer,” Criville says. “Customers have a negative perception of a firm that has employees coming and going like a revolving door. Our clients prefer to see the same faces every day at their facility. They get to know our employees and gain a comfort level with that person. They trust the person and they know the job is getting done.”

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Turnover is building service contractors’ number one problem. Contracting Profits asked readers from across North America what they’re doing to retain quality employees. The answers were as diverse as the people themselves.

Source: www.cleanlink.com

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