NORTH AMERICA
The North American textile services association, TRSA, recently held a series of five virtual regional ‘Town Halls’ which highlighted two things pretty much everyone attending could agree on. First, attendees expressed relief that the economy in most parts of the US has begun to emerge from last year’s Covid-19-related shutdowns. Second, there were widespread concerns that a severe labour shortage could stymie the recovery.
Among the roughly 215 linen, uniform and facility services operator and supplier partners who attended five, 90-minute online TRSA Regional Town Hall sessions on 30-31 March and 1 April, one TRSA supplier partner form the south west said: “The labour issue is the big elephant in the room for us and for most of the people we talk to.”
That view was echoed by attendees at each of this week’s Regional Town Halls, beginning on March 30 with sessions focused on TRSA members from the Northeast/Mid-Atlantic and a second session for members from the Midwest. The following day, two more Regional Town Halls were held for members from the South/Southeast and the West/Northwest. A separate Town Hall for Canadian members is slated for 7 April. Click here for information.
TRSA president and CEO Joseph Ricci and vice president of government relations Kevin Schwalb moderated each session.
Attendees predicted that the labour shortages could begin easing this September when additional unemployment relief provided in President Joe Biden’s recently approved Covid-19 aid bill expires. A big part of the problem with recruitment/retention is that government aid is discouraging people from paid work, several attendees said. Examples of how operators are addressing the labour shortage include:
- Reducing people to part-time: One operator said with reduced demand from restaurant customers, he’s cut employee hours sufficiently that they can still qualify for unemployment benefits.
- Expanding onboarding programmes to foster teamwork, coupled with in-depth exit and ‘stay’ interviews to get a better handle on what’s working and what needs to work better to satisfy employee needs. One attendee emphasised that the challenge is not just hiring but avoiding a “Tsunami of turnover” in staff.
- Enhanced flexibility: This means showing that you care, especially for employees required to work overtime due to labour shortages, by providing pizza parties and other perks, plus paid time off for Covid-19 vaccinations or other personal needs.
- Increased pay, including retention bonuses: Many companies have already done this, but the problem is the difficulty of passing these added labour costs on to hard-hit customers such as restaurants and hotels that are themselves struggling with labour shortages and trying to survive government-mandated Covid restrictions that limit capacity to 25%-50%. Industry supplier partners face similar recruitment/retention challenges in terms of boosting pay for staff at a time when many laundries have cut capital spending due to reduced sales. One supplier described a “catch 22” situation in which material costs, such as steel, keep rising, yet it’s extraordinarily difficult to pass any costs on to customers.
- To the extent that companies can retain staff, they are taking advantage of Employee Retention Credits in combination with Paycheck Protection Program loans. In earlier versions of this programme, you couldn’t take advantage of both programmes at the same time. In the latest Bill from the Biden administration, you can pursue both simultaneously.
Town Hall attendees reported some positive aspects one of which is that the labour shortage for laundry operators in the hospitality sector is that it’s pushing hotels to close their on-premise laundries due to the difficulty of keeping them staffed. The pandemic has accelerated an ongoing trend in favour of hotel laundry outsourcing, several operators said. One noted that in most cases he’ll decline to take on OPL work – unless the hotel agrees to close the facility permanently in favour of outsourcing their laundry operation.
Another positive consequence of the pandemic, reported TRSA, is that it has increased the focus of laundry customers in all sectors, but especially healthcare, hotels and food processing, on ensuring textile cleanliness. This, in turn, has enhanced the value of programmes such as TRSA’s Hygienically Clean program. The third-party auditing of laundry hygiene that this programme provides to linen, uniform and facility services companies confers a sense of ‘validation’ to customers. That means customers know their textile provider follows best practices for laundering, including periodic testing of textiles to ensure that they are safe for use by staff and the public.
One factor that makes Year II of the Covid-19 pandemic a continuing challenge for operators is the uncertainly that goes with it. With each succeeding ‘wave’ of Covid cases, one operator commented that the unpredictability factor of where, when and if these will hit, aggravates planning efforts.
TRSA reported that participants indicated that the wide variation in government rules related to the pandemic aren’t helping either with States like Florida and Nebraska largely wide open for business, while others, such as California and Michigan, are nearly as restricted as they were a year ago.
However, most attendees still said they’re better off than they were a year ago. Industrial operators said their sales are near the level of pre-Covid, with extra demand for facility services products helping to make up the gap with customers whose uniform business is down. Some industry segments such as clean room and food processing also are experiencing brisk growth.
Healthcare, too, has largely recovered, according to participants of the Town Halls, but not completely. Hospital flatwork business is typically at about 90% of pre-Covid levels, and operators speculated that a combination of Covid patients, who typically use fewer linens, and patient fears about going to the hospital, have contributed to the downturn. Most said that outpatient medical business had recovered to pre-Covid levels.
As more people get vaccinated for Covid-19, a robust recovery and a loosening of business restrictions could follow this spring. And while there are no easy answers for the recruitment/retention issue, most operators and suppliers will settle for any sign of progress. Said TRSA. “We’re still scratching our heads on labour,” one operator said, adding: “I’d still rather take this over last year.”
