Cleaning Services Sector Snapshot

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1 Cleaning Services Sector Snapshot Sources: Commercial Cleaners Domestic Cleaners N7311 Commercial Cleaning Services in Australia Industry Report, IBISWorld, Oct 2014 Increased outsourcing of cleaning services by governments and businesses Franchising is increasing, including for household cleaning services Increasingly provided to major clients on a total facilities management basis Steady revenue and value added growth in the past five years IBISWorld, Oct 2014 Job Roles: Two broad areas: General cleaning: domestic cleaner, hospital cleaner, commercial cleaner, commercial plant cleaner, steam, pressure and chemical cleaner, and window cleaner Carpet cleaning: carpet and upholstery cleaning, fire and smoke restoration, water damage restoration and forensic cleaning Products and services segmentation ( ) 6% Other cleaning services 6% Street and road cleaning services 9% Residential cleaning services 42% Interior building cleaning services 10% Industrial cleaning services Total $7.9bn 13% Exterior building and window cleaning services 14% Washroom services Source: CPSISC - ENVIRONMENTAL SCAN : APPENDICES

2 Number employed Employment in growth or decline Majority employed in small / medium or large businesses DoE reports that this is a very large occupation, with 156,000 in November Industry employment is expected to remain solid, but mostly for parttime or casual employees. IBISWorld estimates that employment will increase at an annualised 1.6% over the next five years. IBISWorld reports employment numbers as lower than the DoE figures, at 121,820 in forecast to rise to 131,660 workers in Such growth will include more reliance on casual and part-time staff to meet expanding client needs and maintain employment flexibility. This will also keep wages low. Demand is strong and stable, driven by business numbers and outsourcing. With an increasingly casualised workforce, employment of workers remains growing in demand. Outsourcing of commercial cleaning allows organisations to concentrate on their core business and seek out cost efficiencies. Demand for residential cleaning is reinforced through high and dual-income households and the ageing of the population. Several in-home aged-care programs now offer cleaning services, particularly for disabled people. The industry is forecast to continue growing steadily over the next five years, with revenue rising at an annualised 1.7% to reach $8.6 billion in This growth is lower than in the previous five years because the industry will continue to mature and high competition will limit pricing growth. Employment in large companies with national contracts through to one-person operators or employment within organisations such as hospitals as staff members. Workers are predominantly employed by small companies, commonly family-owned, or in some larger companies (ranging from multi-million dollar Australian and overseas companies). Many are sole-traders, being the majority of carpet cleaners. Bundling of cleaning services for full residential or commercial asset maintenance and support will condense the number of businesses in the future, which is more likely to be in the commercial cleaning sector. Franchise and licensing arrangements are likely to grow at the same rate (as advised in the E-Scan). Predominance of larger operators is expected to rise slightly over the five years through due to mergers and acquisitions. The industry will largely remain highly fragmented with a significant smallbusiness orientation. CPSISC - ENVIRONMENTAL SCAN : APPENDICES 191

3 Majority employed in regional and remote or urban areas Proportion male to female workers Strategies to encourage female workforce participation With the main market segments for commercial cleaning being commercial building and office operators, education and medical providers, retailers, industrial companies, governments, households and hospitality operators, the majority of work is found in cities and urban areas. Predominantly located in NSW and VIC due to the concentration of population and the higher share of businesses, government, educational, health care and other institutions. In QLD, the number of operators is significant, although employment figures indicate these as mainly small operations, largely due to the geographic size and dispersion of the population. The number of firms operating in WA has increased over the past five years due to the mining boom. There are larger-than-average sized operators in the ACT, mainly due to the concentration of large government offices and other administrative offices, and the fact that households have higher than average incomes. The majority (58.6%) of Commercial Cleaners are female. The DoE reports 19.0% full-time female workers, and 19.3% full-time male workers. 39.6% of the sector are female part-time workers and 22.1% are male part-time workers. The carpet cleaning sector is dominated by males, making up around 90% of the workforce. There are very low numbers of women in permanent management positions and this is a key issue for the sector. Gender (% share) Commercial Cleaners All Occupations % Males FT Males PT Female FT Female PT The graph shows the share of employment (%) for males and females, employed full and part-time, compared with all occupations. Source: ABS Labour Force Survey, annual average Estimates have been rounded and consequently some discrepancies may occur between sums of the component items and totals CPSISC - ENVIRONMENTAL SCAN : APPENDICES

4 Proportion full-time to part-time workers Proportion of industry that have completed Certificate III or IV Reliance on large numbers of part-time and casual employees with much work especially in commercial cleaning taking place out of business hours. Less than half of workers in this sector work full-time (38.3%). Average weekly hours for full-time workers are 39.8 (compared to 41.1 for all occupations). The most common level of educational attainment is Years 11 and 10 (31.4%). 14.2% of workers in this sector have completed at Certificate III or IV. Educational attainment (% of employment) Commercial Cleaners All Occupations % Post Graduate/ Graduate Diploma or Graduate Certificate Bachelor Degree Advanced Diploma/Diploma Certificater III/IV Year 12 Year 11 and 10 Below Year 10 The graph shows the highest educational attainment (% share of employment) for this occupation compared with all occupations. Source: ABS 2013 Survey of Education and Work (SEW). The measure of overall educational attainment is the ABS HEAP variable, which regards successful completion of Years 12, 11 or 10 of school as a higher attainment than a Certificate II coupled with any lower level of schooling. Estimates have been rounded and consequently some discrepancies may occur between sums of the component items and totals. rd&tab=stats&cluster=&code=8112&graph=ep Current economic impediments for this industry Demand for cleaning services is driven to a large extent by trends in commercial construction activity and outsourcing cleaning services by governments and businesses which are looking for operational cost efficiencies. As contracts are often of a three year duration (or less), the industry is highly impacted by the current economic climate, with high competition for contract renewals and low profit margins. CPSISC - ENVIRONMENTAL SCAN : APPENDICES 193

5 Impact of globalisation Impact from technology The influx of international students has become a key recruitment source for many commercial cleaning companies. With its minimal barriers in terms of compliance, qualifications or establishment costs, the cleaning industry has always been an attractive sector to new migrants, and this trend continues. The cultural standards and skills of cleaning differs considerably in countries where migrants originated from several decades ago, to where they are coming from now, and is a challenge for the industry to ensure it maintains its high standards. The sector has a low globalisation level as most cleaning companies are Australian-owned and earn most of their revenue from domestic activity. Some Australian-owned players operate internationally. The number of foreign operators in Australia will increase competition for larger cleaning contracts, and lead to some reduction in profit margins for major operators in Australia. The use of mobile communication equipment is required to stay in contact with workers, contractors and clients. There is expected to be ongoing changes and improvements to cleaning products and chemical compounds, particularly in environmentally-friendly products, although far less innovation with cleaning equipment and technology in future years. A cost of using new, and possibly more expensive, cleaning chemicals and equipment is weighed against the cleaning results required and acceptable prices. Overall, cleaning is labour-intensive and will remain so in future years, with some innovations to increase labour productivity and efficiency ahead. Environmentally friendly chemical products have made significant impact, although this is applied unevenly across the industry. Water and energy use are also becomingly increasingly important. New chemicals and advances in machinery (such as new functions to vacuum cleaners and innovative mechanical equipment that replace chemicals) are also minor changes in technology. Ageing workforce concerns The main age group is years (26.7%) and the median age is 47 years (compared to 40 years for all occupations). Impact from population growth and / or demographics High proportion of disadvantaged workers, including migrant and international students with poor English and literacy skills. The ageing population and the Baby Boomer generation moving into retirement may see a greater demand for domestic cleaning services, which may in turn be beneficial to the community with less aged moving into supported care if they are able to remain in their own homes. 194 CPSISC - ENVIRONMENTAL SCAN : APPENDICES

6 Strategies to encourage Indigenous Australian participation Changing profile of the learner at work This remains an area that requires better reporting through to the industry association. Existing knowledge of initiatives creating employment in this sector for Indigenous Australians relate to large mining projects, such as NGarda in WA. ( ) As the cleaning industry is unregulated, there is less incentive for cleaners to receive formal training. The majority of cleaners still have little or no formal qualifications, relying instead on skills and knowledge gained through on-the-job training and experience. It is estimated that the majority of the workforce is untrained, especially in the residential, window and automotive cleaning areas. This under-development of cleaning staff will increase with concerns on recent withdrawals of funds for training. Current and emerging skill gaps Currently there is a low level of publicly funded training in the sector and difficulty in identifying the full use of the qualifications by the sector. 49 Those that engage in publicly funded training are the public sector cleaners and larger contractors, whilst the micro-businesses usually only participate when required by regulatory or technological change (mainly new chemicals). Traditionally this sector has been of low status and low pay, with few barriers to entry. The normal drivers of training include: Task-specific training Health and safety, particularly relating to chemicals and detergents, and working at heights New chemicals and equipment Contractual obligations to clients The cleaning industry is affected more by recruitment and retention issues than skill shortages although there are skill gaps to be addressed by on-the-job training. Without access to WHS training from professional trainers, a supervisor s ability to ensure compliance with current regulations while delivering onthe-job training and monitoring of such workers, will be impeded, thereby putting vulnerable workers at risk. Language and literacy limitations of the workers and prospective recruits is a factor and needs to be dealt with through enhanced training given the safety issues affecting many aspects of the work. More emphasis on the need for qualified personnel is required to build up the skills base by training to meet anticipated growth and need for quality service. Customer service and employability skills have been identified as major skill gaps. Educating small business owners to value training outcomes in terms of increased productivity, reducing/recycling waste, and customer satisfaction are key issues. 49 A significant reduction of public funding and its impact on the cleaning services industry is addressed in Section 2 Identified Workforce Development Needs of the E-Scan. CPSISC - ENVIRONMENTAL SCAN : APPENDICES 195

7 Ways to boost skill levels to meet any skill shortages Workforce priorities Anecdotal notes on workforce development needs BSCAA is advocating that that the role of cleaning operator should be re-instated on the National Skills Needs List (NSNL) so that employer incentives would encourage businesses with tight margins to re-invest in training and support further pathways through national qualifications. BSCAA tells CPSISC that the Certificate IV and Diploma level traineeships have helped to improve retention rates and close a documented managerial skills-gap by offering existing workers a career pathway. BSCAA says that this trend could now be reversed and once lost, the cost to rebuild this momentum would be far greater than maintaining it. To maintain industry standards, online training mapped to units of competency is becoming a trend due to the closure of RTO training facilities as a result of funding restraints. Recognition of LLN issues that are experienced by many within the workforce Support for many workers to perform effectively without direct and constant workplace supervision Focus on workplace health and safety Need for supervisors with skills across a broad range of areas including providing input to the quotation process, coaching and mentoring, fostering teamwork, effectively planning the work, time management, industrial relations issues and customer management Adaptation to use new materials and tools that emerge through technological development, such as use of microfiber, other low water cleaning systems, steam cleaning, application of green and other environmentally sustainable practices, such as the use of fewer chemicals and lower impact chemicals along with reducing use of water Understanding and applying correct cleaning techniques to newer technology surfaces Support for management of infection control, in all industry settings Support for management of security, especially in the commercial, institutional and government sections Application of personal safety practices in the workplace Application of safe work practices, including new restrictions on working at heights Ability to access skills for specialist cleaning areas, such as air conditioning, cleaning and waste management Cleaning is highly labour intensive and skilled work and the industry is extremely competitive. Standards of cleaning work required can change according to site requirements, such as health and hygiene implications at hospitals or food preparation facilities, or public facilities or an innercity luxury apartment complex where clients expect facilities to look brand new. Skills therefore may not differ greatly across worksites or contexts, but standards expected and risks associated may differ. Cleaners are generally required to do routine and repetitive work with some tasks needing an eye for detail and presentation, and others that can be demanding and confronting. 196 CPSISC - ENVIRONMENTAL SCAN : APPENDICES

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