ALEXANDRIA, Va. — April 8, 2021 — 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 March 30, 31 and April 1, pretty much everyone could agree on two things. First, they’re relieved that the economy in most parts of the U.S. has begun to emerge from last year’s COVID-19-related shutdowns. However, there also were widespread concerns expressed by each of the U.S. regional town halls that a severe labor shortage could stymie the recovery.
Attendees at this week’s Regional Town Halls (Northeast/Mid-Atlantic, Midwest, South/Southeast, West/Northwest and Southwest) predicted that the labor 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 labor 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 programs 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 emphasized 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 labor 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 labor costs on to hard-hit customers such as restaurants and hotels that are themselves struggling with labor 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 program, you couldn’t take advantage of both programs at the same time. In the latest bill from the Biden administration, you can pursue both simultaneously.
One upside of the labor 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 favor 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 favor of outsourcing their laundry operation.
Another positive consequence of the pandemic 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 programs such as TRSA’s Hygienically Clean program. The third-party auditing of laundry hygiene that this program provides to linen, uniform and facility services companies confers a sense of “validation” to customers. That means that customers know that 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 challenging for operators is the uncertainly that goes with it. No one can predict with any certainty what’s coming as far as the reopening of customer businesses or the imposition of new restrictions with each succeeding “wave” of COVID cases. One operator said this unpredictability factor aggravates planning efforts. Laundry operators long for a return to stability that can allow them to reduce costly overtime, and, in turn, lower, employee stress levels.
A related issue is the wide variation in government rules related to the pandemic. Attendees at the Town Halls confirmed that states like Florida and Nebraska are largely wide open for business, while others, such as California and Michigan, are nearly as restricted as they were a year ago.
Despite all these challenges, 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, but not completely. Hospital flatwork business is typically at about 90% of pre-COVID levels, several Town Hall attendees said. 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. “We’re still scratching our heads on labor,” one operator said, adding that, “I’d still rather take this over last year.”
Posted April 8, 2021