How the Labor Crisis Has Impacted the Laundromat Industry – And How Owners Are Coping and Adjusting Their Operations
As the economy continues to awaken from an 18-month, pandemic-induced slumber, the job market seems to be shape-shifting in ways many small-business owners have rarely, if ever, experienced.
Job seekers are ignoring positions they once jumped at. And employers are straining to attract new hires, as they try to gauge whether the difficulties are temporary or signify a more lasting situation.
Nearly 80 percent of laundromat owners responding to a recent Coin Laundry Association survey indicated having a “difficult” or “very difficult” time finding and hiring new employees.
Of course, a “labor shortage” would imply there aren’t enough available workers to fill open jobs, but that’s not the case. National unemployment in June was 5.9 percent, up from 5.8 percent in May, according to data from the Labor Department.
Millions of Americans are seeking work, and the Labor Department is reporting the highest number of advertised job openings in 20 years of data.
Economists seem to concur that it’s just a matter of time before open roles are filled, and the most undesirable jobs with the lowest pay and least benefits will be the last to go. They don’t see the job market as a sign of shifting economic forces unleashed by the pandemic, or of a workforce made comfortable or lazy by stimulus payments.
Yet, some trends are clearly emerging – one being that the struggle to fill jobs is hitting smaller businesses disproportionately.
“It’s certainly impacting the entire economy more generally, but specifically for small firms,” noted Holly Wade, executive director of the National Federation of Independent Business’s Research Center.
Forty-eight percent of small businesses surveyed by the group have an open position they’re unable to fill, according to a recent NFIB report.
“We’re far beyond the average tight labor market, and it’s only getting worse,” she explained.
This month, a number of laundromat owners and industry distributors explain how this current labor crisis has impacted their businesses, as well as how they’ve adjusted their operations to cope and what they’re doing to attract and retain quality employees:
Yvette Morton Williams
Wash & Spin Coin Laundry
Atlanta
Staff: 21 employees, across three locations.
The current labor crisis and worker shortage has been challenging for us. I’ve never experienced a time like this during my more than 11 years in the industry. We’ve had a more difficult time attracting and retaining new employees.
We’ve noticed that prolonged recruitment efforts are required to fill open positions. We’ve had some periods in our self-service-only locations where we’ve had to operate unattended for more hours than normal. We’re fortunate to have this option and thank our guests for their patience, as we’ve had moments where the service level was not at historic levels.
To attract employees, we use online recruitment tools, as well as referrals from current team members and current customers. I like hiring upbeat customers who are familiar with our facility and whose temperament is already somewhat known by our current team.
We’ve been fortunate to have amazing team members who have pitched in to cover any openings. We recognize the importance of showing our level of appreciation for their efforts. Just as it’s more cost-effective to retain existing customers than to obtain new ones, it’s far better to hold onto good team members. This should be at the top of all employment efforts. Increasing our pay rates, providing bonuses, offering paid time off, and written and verbal acknowledgement of team members’ efforts are all more necessary now than ever before.
Alex Harris
Professional Laundry Systems
Deer Park, N.Y.
Fortunately, all of our employees have maintained their positions within the company. The shortage we’re experiencing is more so with outside sources, such as drivers for freight companies and technicians at supply chain companies.
In the distribution business, our adjustment has been with supply chain issues, such as longer than normal lead times. We’re coping by increasing inventories and finding new suppliers.
However, I am seeing some laundromat employees going to higher-paying jobs, such as Amazon, due to the demand. As a result, many laundromat owners are now forced to pay higher salaries, thus increasing their expenses and reducing their profits.
I’d suggest store owners look carefully at their P&L statements these days. Perhaps it’s time to adjust the pricing structure at some laundries. This labor crisis has created a situation where labor rates go up, so costs go up; in turn, prices will increase to the laundromat patrons who just received a pay increase.
Robert Maes
Express Laundry Center
Houston
Staff: We operate four fully attended laundromats and employ four to five staffers per location. In addition, we share one supervisor and one repair technician between the four locations.
The current labor shortage is nothing less than a crisis for our laundries for the following reasons:
1. Additional time and resources required for recruiting. We find many candidates are typically hesitant to seek work, and those who do have a tendency to not come in for interviews, even after confirming they will do so.
2. Employees must become reacquainted with a working lifestyle. We find many candidates are accustomed to not working, and when they start working again, they may be deficient in basic needs required to work – such as transportation, child care, personal discipline or motivation.
3. High turnover. Due to all the renewed competition for general labor employees, we find competition to be fierce and employee turnover to be exceptionally high.
4. Wage inflation. When we do find qualified candidates, we typically have to pay higher wages than in the past.
5. The situation is unprecedented. Most of us haven’t faced a global pandemic in our lifetimes, so the current labor shortage is truly unique. There’s no textbook answer to the current labor crisis.
We’re working harder to find qualified candidates who typically are not prepared to go back to work. And, when we do find them, we’re faced with paying them higher wages, still with the risk of even greater turnover.
The result is that we are spending more time recruiting, we are paying more for our labor, and the quality of our service is dropping. And, because of the pandemic, no one knows if this phenomenon is temporary or permanent – so tackling the crisis has been a challenge.
If laundry owners believe it’s permanent, they may have to change how they operate their businesses. But, if it’s temporary, there may be some “stop-gap” measures owners can take until the crisis improves.
We’re taking a more temporary approach to the problem, which means we’re managing quantity versus quality. We’re temporarily throwing more resources at the problem, as opposed to permanently raising wages – because we expect the problem will eventually go away, and we don’t want to be caught with higher-than-market labor costs. This approach is admittedly harder, but will hopefully pay off in the long run.
One example of this approach is offering a wage bonus based on attendance, as opposed to a permanent wage increase. If an employee shows up on time when scheduled and follows basic procedures, he or she most likely will receive a bonus. If we determine that market wage increases are permanent, we may decide to eventually eliminate the bonus and instead implement a permanent wage increase.
To improve our recruiting effort, we’re using more online resources like Craigslist, Indeed, Facebook and Snagajob. Based on experience, we’ve found that success rates with these “job boards” can change – what worked a year or two ago, or even a week ago, may no longer be that effective.
Bruce E. Rocha Sr.
Mattapoisett Laundromat
Mattapoisett, Mass.
Staff: Six employees, with two extra staffers during the summer
The labor crisis and shortage of extra help have added stress to our current team members. We’ve had to extend shift hours for those on staff to make up for shortage.
To offset the situation, we’ve contacted the local guidance offices at area schools – which have been helpful for attracting summer workers – and placed extended help wanted ads in local publications. In addition, we’ve been targeting seniors as job candidates, which has proved to be our best option.
Ken Barrett
Washin’ Coin Laundry
Oxford, Ala.
Staff: One employee
I recently sold my laundry services business – which handled wash-dry-fold and commercial accounts – due to a few reasons; however, the current employee situation was the tipping point for us. I had received a lot of job applications, but few candidates actually showed up to the interviews and no one would accept the position.
Right now, I have just one employee who works whatever hours she chooses, up to 25 hours a week. I allow her to set her own schedule around any childcare issues or other appointments that may arise.
Her main responsibilities are to keep the vending machines fully stocked and to deep clean my five unattended laundromats.
Peter Mayberry
Anytime Laundry
Papillion, Neb.
Staff: 30 employees
This has been the hardest time to hire employees since I started my company. It’s also the first time as a store owner that my employees have asked me to lay them off so that they can collect federal government benefits.
We’re constantly “hiring,” but the talent pool is just not there. Moreover, only one in 10 people typically show up for the job interviews.
As far as finding new employees, word of mouth has worked best for us – as well as the fact that we’re starting new hires at $4 above the minimum wage.
We’ve had to keep employees that we typically would have let go, just because of the difficulty in finding quality candidates. We’re running leaner, but still managing to keep our stores staffed. And I’m definitely trying not to push our exceptional employees to the point of burn out.
Milton Espinoza
Laundromat@Fairview
Fairview, N.J.
Staff: Three employees
There isn’t a labor shortage, there is a wage shortage. We have to stop contributing to poverty and pay our employees a living wage. This is a “good jobs crisis.” And I mean jobs that don’t pay poverty wages.
This situation has been created by low wages and a lack of benefits, combined with the fact that many workers are unwilling to put themselves at risk due to a pandemic – along with a lack of affordable childcare to help working people get back to work.
We need to talk about things like raising the minimum wage to a living wage, affordable healthcare, paid time off, retirement savings, affordable childcare and so on.
Dave Menz
Queen City Laundry
Amelia, Ohio
Staff: Typically, about 40 employees
We’ve always felt hiring was a strength of ours, and it’s currently very difficult to find qualified team members. This is a problem for a growing business with an already-limited staff, due to the pandemic lingering for 18 months.
We’ve tried everything to attract employees with virtually no luck. We’ve increased compensation, despite already being very generous, and offered signing bonuses. Neither have moved the needle
As a result, we’ve had to lean on our existing team more than we’d prefer, including overtime and limiting our “attended” hours. We’ve always been fully attended, but we’re now operating more and more as unattended.
This has overworked the staff and impacted morale. We’ve also been forced to stop all marketing across our company. We simply cannot service the customers we have.
I certainly hope this situation is short-lived. However, as long as people don’t need to work, most will choose not to.
Sally Anderson
Super Clean Laundromat
Southbridge, Mass.
Staff: One employee
COVID-19 has impacted my business more than the labor shortage. I changed my business model when the pandemic first hit. I figured the government wasn’t going to help me, so I cut my business hours to reduce costs. I gave the wash-dry-fold business to an employee. And I kept one employee on staff to clean.
Basically, we’re now an unattended laundromat. My costs are less – and I have more time and less headaches now that the wash-dry-fold business is gone. I’ve lost revenue, but it was a worthwhile tradeoff for me.
The best way I’ve found to attract new employees has been through word of mouth and in talking to my regular laundromat customers.
I think this labor situation will be short-lived. Right now, people are reassessing what they want to do, especially with the current lack of affordable, assessable childcare. I believe childcare facilities will open up again by fall, and life will get back to normal.
Stephen Gramaglia
CleanFresh Laundromat
Yonkers, N.Y.
Staff: We currently employ six wash-dry-fold attendants and two overnight cleaners. We’ve been looking for another WDF attendant.
The labor crisis has had a slight impact on our wash-dry-fold turnaround time. If we could fill our current open position, we’d be better able to accommodate certain expedited orders and not be as backed up during peak times.
We’ve been searching for a WDF attendant for more than four months. We post ads on Craigslist and Facebook, and we have a sign in the window of our storefront. We’ve also asked our existing employees if they have any friends or family who may be looking for work. Although we’ve had a few applications come in, those applicants either didn’t show up for interviews or they didn’t respond to any communication.
We set the customer’s expectations at the time of the drop off, depending on our labor situation for that day. For example, on days we’re short-staffed, we let customers know their orders will be ready by a certain time. Thus far, the labor situation only impacts us a few days a week, and for the most part, our customers have been understanding.
We’ve also had to increase our hourly pay to try to attract more applicants and, in turn, we’ve also raised our prices.
Unfortunately, the pandemic relief packages have created unemployment benefits that currently exceed minimum wage – so there is a whole sector of the workforce that’s able to stay home and make more money than if they were working.
I feel that, as states begin to roll back the unemployment incentives little by little, the applications will start rolling in. I recently spoke to an owner in Texas, and he said he received 25 applications in one week after the governor there eliminated the incentives. So, there is a light at the end of the tunnel.
Larry Adamski
Muskegon Laundromat
Muskegon, Mich.
Staff: Five to six employees
It’s very difficult to attract qualified applicants and maintain a full staff these days. I’ve had to increase my advertising budget for help, as well as increase our starting wage from $10 to $12 per hour.
In addition, I’ve enhanced day-to-day operations by employing a general manager to handle oversight of the daily operations. I’ve also increased our attended hours on Sunday afternoons by adding an additional employee from noon to 6:00 p.m.
What’s more, within the past six months, I’ve increased vend prices on all washers – except my 20-pound machines – and all dryers to help pay for the severely increased labor costs.
I feel the labor situation has been caused by enhanced unemployment benefits, a relaxing of the requirements to actively seek re-employment, and politically inspired handouts and benefits. This worker shortage appears to be a short-term situation with long-term consequences.
Art Jaeger
Santa Clarita Laundry
Santa Clarita, Calif.
Staff: We normally employ 28 people for our stores and home-delivery service.
Unfortunately, the difficulty in replacing and hiring additional workers has changed our business plans and made operating our existing businesses more difficult. To be fair, a contributing factor over the last 18 months has been the hours lost while workers were recovering from their bouts with COVID-19, for which we also had to scramble to cover.
We had intended to further expand our home-delivery service by adding additional territories and taking on more commercial accounts. Not being able to attract new hires beyond replacing our regular turnover placed those plans on hold. It was difficult enough to maintain a consistent headcount, much less trying to expand beyond that.
Every day, we are on the lookout for new candidates and are constantly recruiting. There’s been no one method of finding candidates that can be consistently relied upon. We have in-store and storefront signage. We offer referral bonuses to our employees. We utilize Indeed and ZipRecruiter with enhanced positioning at further cost. We’ve also engaged outside employment agencies; posted on Twitter, Facebook and Instagram; and put up flyers at churches and similar community meeting places. All of these methods have garnered candidates of which some have been hired. But none have been sufficient to maintain a full workforce – and certainly not an expanded one.
To adjust for open positions and employees on medical leave, we’ve had managers take on additional shifts; scheduled employees to work in stores other than their normal home stores to cover open shifts; provided employees with just one day off each week, rather than two; have had many days of operating the store with two team members splitting the day, rather than our usual three shifts; and paid more overtime hours to motivate our staff to take on those extra hours.
We’ve also taken on and trained workers provided by temporary employment agencies at a much higher per hour cost. And, at the height of the pandemic, we closed our stores two hours earlier than usual.
There are several contributing factors to the labor shortage. People have been ill, needed to care for at-home children with schools closed and other family members, or moved out of the area. Also, many individuals were happy to stay at home, where they felt safer and were subsidized by enhanced unemployment insurance benefits and not concerned about losing their apartments or homes with non-eviction rules in place.
When non-essential businesses started to open up again, we were in competition with the hospitality, restaurant and retail industries for a now smaller pool of workers. Many of the people who might have considered our positions a year and a half ago are now searching for jobs that offer more benefits and higher salaries.
I feel this is a short-term problem that will begin to equalize during the fourth quarter of this year. During this time, schools will open on a full-time basis, enabling parents to better plan their personal schedules. Childcare centers will once again become operational, providing parents with a safe place to care for their non-school-age children. Higher-paying positions with benefits will become filled, and candidates will start to look at minimum wage positions again. Enhanced unemployment benefits will end, and regular unemployment will once again require recipients to perform job searches as a condition of receiving benefits. And non-eviction rules also will come to an end.
The part that’s harder to predict is the long-term effect of the many corporate businesses raising their hourly wages to $15 per hour on a national basis. This will add pressure on finding qualified workers for smaller businesses, as many of these positions also feature medical and other benefits, and their positions will appear more attractive than those our industry has to offer.
Announcements of these increases have already been made by Costco, Walmart, Chipotle and McDonald’s. Others national businesses are sure to follow. For those operators whose employment strategies already include being above their local minimum wage laws, this may place additional pressure on them to attract and retain employees.
Tom Cuthbert
Suds R Us
Clanton, Ala.
Staff: 10 to 12 full- and part-time employees
The labor crisis has made a bad situation even worse. It has been years since I’ve had a full staff of people that I could be proud to call my business’s public representatives.
I pay competitive wages with a split on wash-dry-fold income. My operation features all small laundromats, where the staffers must work by themselves. If they don’t do the work, it doesn’t get done.
To attract new employees, I’ve raised the starting salary by $2 per hour. We’ve also adjusted the operation, having one team member cover two stores, with shorter hours at each location.
I think the current labor shortage has been caused by the constant pushing for a minimum wage of $15 an hour. If the minimum wage were $15, I’d have to raise vend prices by more than $1 to compensate my employees who already make well over minimum wage.
Here in central Alabama, I believe we’re stuck with labor problems. We have businesses relocating to the area, bringing in a much higher base wage, causing many of us to be priced out of the labor market. Raising prices only works up to a point – many of my customers live on fixed incomes, and when prices get too high, they simply do without.
Craig Dukauskus
Commercial & Coin Laundry Equipment Co.
Gulf Breeze, Fla.
The labor crisis has impacted us with regard to some of the services we offer, as far as our turnaround times and also in planning store installations. Our service backlog is quite intense, and our delivery times have been pushed out due to this worker shortage.
The laundry business has been growing. There are a lot of good things going on in our industry, with many new investors coming in to look at the laundromat business since the pandemic – and now this worker shortage is causing us all some issues.
For some current store owners, the longer lead times on equipment have affected their plans to retool and reinvest in their businesses. Also, for those with fully attended laundromats that offer wash-dry-fold services, it’s been difficult to find employees to fill many of those positions. It’s been a domino effect nearly throughout the entire industry.
At my company, we’ve looked at ways to help us run more efficiently – whether that’s new policies and procedures, or investing in new technology. For example, we’ve invested in new software that enables us to track and manage our parts business much more efficiently.
The silver lining to all of this is that it has helped us all get leaner and more efficient. Whether you’re a store owner or distributor, you’re looking at your business, seeing that the marketplace has shifted and asking yourself what you can do.
With that said, I see the labor shortage as a short-term event. We were doing very well before COVID-19 hit. People were working, and I feel they’ll get back to work. People will begin to feel comfortable from a health and safety standpoint again – and comfortable getting back out there into the workplace.
