With Labor Costs on the Rise, Getting the Most Out of Your Staff is Critical to the Success of Your Wash-Dry-Fold and Commercial Laundry Business
As a small-business owner, you’re very likely aware that there’s a movement in cities and states across the U.S. to increase the cost of labor. And municipalities are achieving this in numerous ways, not just by raising the actual pay scale. They’re also implementing various benefits programs, mandating paid time off and so on.
As a laundry owner, you should be asking yourself how you’re going to absorb these higher labor costs and still afford to pay your employees.
Some owners have actually switched from running fully attended mega-stores to automated attended laundry operations. And these businesspeople are doing so strictly due to the increased cost of labor and legislation requiring paid time off for their employees.
Of course, as a wash-dry-fold operator, you need to think hard about this trend and how you’re going to cope with it and compete. After all, you can’t provide a full-service product without labor.
Therefore, your first questions should be: What is your plan? How can you deal with this situation? And what are the specific obstacles?
The first obstacle quite simply is the rate of pay. What does it mean to your laundry business if, for instance, your city, county or state implements a $15 minimum wage – which we’re seeing in several municipalities across the country? How will that impact your actual cost of providing a wash-dry-fold service?
At my business, we consistently evaluate the costs of production. For us, 33 pounds an hour is a benchmark and a great way for us to examine our production rate. That poundage, by the way, is the average of all our attendants participating in the process.
For instance, a good employee who is focusing strictly on the folding process likely can produce about 50 pounds of finished laundry in an hour. The 33-pounds-per-hour statistic factors in separating the clothes, washing them and moving them to the dryers – so that figure, in essence, encompasses the entire process at my store.
It would be wise to come up with an average number of pounds processed per hour for your particular business so that you can accurately budget for any potential labor cost increases and set your pricing accordingly.
Is 33 pounds an hour the best you can do, especially if you’re truly in “production mode?” Maybe not.
As your wash-dry-fold business grows and you add more attendants, there are additional factors to consider as you develop your pricing menu. Of course, breaking down jobs and being more specific with the responsibilities of certain positions will help – as will doing that production work at times that are less intrusive to the customer, which is something we’ve always been very conscientious of at my store. Those are two great ways to attempt to increase productivity.
After all, when your employees are on the floor and there are customers in the store, this situation can become very detrimental to your attendants’ production rates. This is because many customers will notice your store’s employees working and want to interact with them; these customers are waiting for their clothes to either wash or dry, and a lot of them have nothing better to do than start up a conversation with your staffers.
As a result, trying to get wash-dry-fold production work completed when you have small number of customers in your store becomes critical. My friend and fellow laundry operator, Ron Lane, once told me that he would schedule his wash-dry-fold and commercial laundry team to begin work as much as two hours before his store opened – trying to get as much of that work done and processed before 10:00 a.m.
At The Laundry Doctor, we’ve adopted a similar practice – understanding that our attendants’ productivity truly is the first step to being able to pay these employees more and being able to absorb the impact of these new wage laws.
What’s the next step? For us, it is preparing for paid time off and other potential benefits that could be legislated into our business model.
Starting next year, the St. Paul city council has passed a law that provides paid time off for any employee who works any amount of hours, based on a percentage of the number of hours he or she has worked. And those hours will accumulate whether the employee is full-time or part-time.
You can simply look at this type of wage law as an additional cost that you’ll have to consider, similar to vacation pay or any other cost. However, what’s more important is how you plan for this as a factor of your business’ labor cost. No doubt, if you have a consistent flow of wash-dry-fold laundry or commercial accounts that you’re processing through your store, this can seriously impact your business.
How do you plan your staffing around this in order to deliver a finished product in a manner that satisfies your full-service customers?
Again, at my business, one of the things we’re implementing to compensate for this new law is to convert our staff to more part-time employees and less full-time attendants. In addition, we’re in the process of changing how our employees get compensated – going from a standard hourly wage to being paid “by the piece.”
These are just a few potential solutions that might work for your self-service laundry business. Clearly, there are several other options that could be implemented in creative ways to help combat this new trend in labor costs – while, at the same time, enabling you to remain competitive with your residential wash-dry-fold and commercial laundry products.
[Editor’s Note: If you’re interested in learning more about what The Laundry Doctor and other leading laundry owners across the country are doing to fight back against the trend toward rising labor costs, be sure to attend The Clean Show next June in Las Vegas. The show’s educational schedule will include a session on “Maximizing Labor Efficiency in Your Wash-Dry-Fold Operation.”]
