The productivity of a residential cleaning business’s workforce plays a key role in profitability and success. Increasing productivity allows a cleaning company to increase revenue without increasing headcount. Companies that are highly profitable in the residential cleaning industry are also highly productive.
Productivity in the residential cleaning industry measures your cleaning technicians’ ability to complete their assigned tasks in the assigned time. Most of us measure that in terms of allowed hours, or the number of hours you assign to clean a job. You want your employees to be at or under the allowed hours.
If your workforce is hourly then going over the allowed hours and reducing productivity are directly related to lower profitability. In fact, you are effectively generating a lower hourly rate.
For example, if you have a home that you charge $50 per hour for, and it is scheduled for 3 hours, but it typically takes your team 3.2 labor hours to complete it, your team is at 93.75% productivity. And this effectively makes your hourly rate $46.88. And your wages will also be increased by 6.25% over budgeted time as well.
That may not seem like a huge difference, but in an industry that often measures profits margins in the single or low double digits, it can be a significant difference and drag on your profitability.
Many companies pay commission or allowed hours in the residential cleaning industry, meaning that the technicians get a fixed amount of pay for a cleaning. For instance, it is very common to pay a percentage of the job, say 40%. So on that $150 job earlier, even if your employees went over by .2 hours, they would still make the same amount of money, $60 at 40%.
Your effective hourly rate went down, but it did not cost the company anything extra, right?
Wrong. First, there is the lost opportunity cost. Teams that tend to go over on jobs tend to clean fewer homes per day on average. They request help from other team members to pick up jobs they can’t complete, and overall this is a drag on your company’s ability to schedule as much revenue as you would be able to with more productive employees.
Companies that are commissioned-based with high productivity create better-paying jobs for their employees as well. These employees tend to buy into the system and clean more homes per week. It is not uncommon for the average technician at one of these companies to average more than 2 homes per day, even as high as 3 homes per day. The overall effect is that you can have fewer employees cleaning more homes. Even if payroll might be similar, you will have lower costs in terms of turnover, recruiting, and more.
MaidCentral helps you measure the productivity of every employee, the overall productivity levels at every home, and your company’s productivity as a whole. What get’s measured gets managed, and you need to keep a constant eye on your company’s productivity.
- Productivity is a key to a cleaning company’s profitability and success.
- Higher productivity can lead to higher wages for your employees.
- In a constrained labor market, higher productivity means fewer employees are able to do the same or more work than their competitors.
- Technology can enhance productivity by giving your company and your employees the right metrics to be working toward every day.