The highly competitive janitorial industry is driven by a detailed RFP process. Consequently, evaluators often miss important criteria considerations that can have a tremendous impact on business outcomes they are hoping for.
The question you might have missed is: Would a public or private organization better meet your unique company needs?
Below are three critical elements that can be affected by the ownership structure of a service provider. Read below and decide which one would better suit your needs.
Of course, the key difference between a public and private company is that the former must report to shareholders. What does this mean for the janitorial service users? Typically, this indicates that any budget reductions from a client may affect the service provider’s ability to maintain the relationship when a target profit margin is likely a primary decision driver. Private companies have the luxury to accommodate clients’ requirements and meet their requests as needed without external influence.
Many public companies avoid investing in innovative solutions that do not promise immediate ROI. Private companies, on the contrary, are often able to explore new cutting-edge technologies that promise long-term value. Many public janitorial companies must base their decisions around financial expectations of their shareholders. They are usually unable to spend time and money testing new ground-breaking technologies such as Aqueous Ozone Water or Onvation. For the facility maintenance teams, it may lead to missing out on the technological advances that can help reduce maintenance costs and provide a better experience for the tenants.
Adaptability is another benefit that many small to middle size private companies pride themselves on. This refers to the company’s ability to quickly read and act on signals of change. This may include adapting a new technology that ensures that an employee clocks in/clocks out at the right locations or complying with the latest law requirements in a timely manner (AB 1978). Being adaptive can be difficult for large public companies with set hierarchical structures and permanent routines that fail to strive for better. For the facility maintenance teams, this often means settling for outdated processes such as paper clock ins and even paying monetary penalties for non-compliance.
Bonus: Along with the three critical points mentioned above we want to address a common misconception that national public service providers can offer a better pricing. This is not entirely true as many large janitorial companies treat regional accounts as discrete performance units even if they are united under the umbrella of a national contract. What does this mean for facility teams? Treating each of the regions as a separate account requires a specific level of profitability in every district. This does not leave any room for subdivision performance variance. Viewing an account with multiple regions as one single effort has significant benefits. This enables the service provider to allocate resources based on the client needs at each of the facilities.