CHICAGO — When it comes to vision, it doesn’t get much better than 20/20.
But in business, sometimes it isn’t easy to see the road ahead. Wouldn’t it be nice to have a clear view of what’s coming in the year 2020?
Organizations that represent different parts of laundry and linen services have their fingers on the pulse of the industry and can see what might happen in the year to come.
In the conclusion of this series, Joseph Ricci shares what TRSA, the association for linen, uniform and facility services, sees coming for laundry/linen services in 2020.
Joseph Ricci, President & CEO
We expect 2020 to be remembered as the start of a decade in which linen, uniform and facility services operators worked more closely than ever to find short- and long-term solutions to recruit and retain employees.
We also anticipate the 2020s to mark more business information-sharing internationally, as TRSA highlights global issues such as environmental stewardship, evolving hygiene standards, benefits of outsourced linen and uniform services, and other common challenges to facilitate recognition of opportunities to address these similarities.
In July, the U.S. economy notched its 121st consecutive month of growth, the longest expansion in American history, breaking the record set from 1991 to 2001. This year, the inevitable slowdown has occurred; GDP fell in Q3 2019 to 1.8% from 2% in Q2. For the year it will be around 2%, down from 3% the year before.
In 2020, economists expect 2% again. Unemployment is expected to grow marginally (3.6% to 3.7%), portending industry operators having continued difficulties finding and keeping staff. In response, TRSA is cultivating additional education programs for linen, uniform and facility services supervisors, managers, and executives, particularly for developing an industry career path of ongoing professional development and recognition.
These programs will build the industry’s job candidate pool, aid in operators’ development of policies and procedures for hiring and on-boarding staff, and improve engagement in laundry workplaces.
At the core of all three of these types of efforts will be operators’ communications to employees throughout their tenure that they build skills at work every day. This starts with recruiting of high school students that promotes the industry as a viable and rewarding long-term career choice because of advancement opportunity.
Such advancement will be increasingly fostered through formal recognition, such as TRSA certificate programs for production, maintenance, safety and route management.
Candidates will learn that when they are hired, their skills will be assessed to place them in positions they are best equipped to handle. This builds their confidence that they can advance. Employers benefit from placing new hires properly (increases productivity) while reducing on-boarding time and expense. New management hires whose skills are not a perfect match for a position they are fairly well qualified for will receive relevant, accessible training and onboarding content.
More use of training videos is anticipated, and TRSA plans to be a hub of knowledge and information sharing, cultivating a culture of learning and recognition among its members. During the next 18 months, TRSA will work with its volunteer leaders to develop short role-playing videos for supervisors that will facilitate interactive, plant-based training.
These “micro learning” initiatives will minimize time away from the production line and offer industry-specific training for supervisors and managers focusing on “soft skills,” such as conflict resolution, coaching and employee evaluation.
All these efforts will elevate the industry’s ability to recruit, assess, train and retain the best, more engaged talent.
This vision emerged from the input of more than 200 individuals who participated in 2019 TRSA benchmarking interviews, focus group discussions (at the Human Resources Summit and Clean Show) and a survey.
Also examined were organizations in other industries with effective education portfolios aimed to move “front-line/production” workers into supervisory and managerial positions. This revealed success by associations that leveraged partnerships for funding and content to emphasize the importance of elevating the industry and building out the candidate pipeline.
As one TRSA research participant noted regarding current industry practices, “We promote an individual when someone is reaching 100% of their production target, but that’s the wrong reason. If there were a formalized program to prepare someone to go into that supervisory role, that would be a benefit for the whole industry. It’s good for retention for people to see there’s upward mobility in that you can be promoted from the inside.”
TRSA’s emerging Core Curriculum Certificate Program consists of online modules and testing for skill development. The Production Management Certificate program is now available online.
To develop its Maintenance Management counterpart, a Maintenance Manager Job Analysis Advisory Task Force has met. Culled from Maintenance Management Institute (MMI) faculty and graduates, this group is working to identify and gather resources, develop surveys and guide the overall process of documenting the maintenance manager’s roles, responsibilities, skills, tasks and knowledge.
Identifying, recruiting and retaining maintenance personnel, particularly skilled, knowledgeable managers, is one of our industry’s most troubling issues. Through the task force’s work on the certificate program and other assessment tools, TRSA will further assist companies in developing the skill sets and improving retention of these valuable positions.
To accelerate worldwide information sharing, TRSA has engaged the Economist Intelligence Unit (EIU), the research and analysis division of The Economist Group, the sister company to The Economist magazine. Given EIU’s understanding of the complexity and nuance of international markets, the firm will provide unmatched expert commentary, interpretation and forecasting on how our industry and its trajectory will be shaped by macroeconomic and demographic forces.
Operators in the United States, Canada and Mexico will benefit from nation-specific forecasts and will gain from learning about the other 10 countries covered as well. Findings are expected to reveal approaches that can be emanated anywhere to address worldwide industry opportunities such as improving quantification of the value of linen, uniform and facility services (reversing the perception of the business as a commodity) and better analyzing economic data to improve customer service and drive additional revenue.
EIU’s research is covering uniform rental, linen supply and facility services, examining five key demand sectors: healthcare, hotels, construction, energy (oil and gas) and manufacturing.
Using growth-related and financial-performance-based indicators, market sizes of these sectors in each of the 13 selected countries will be analyzed and forecast, linking these outlooks to our industry’s growth in each country. Expert interviews will provide qualitative insights on sector linkages and key trends. Ten public companies from the industry will be profiled.
Key questions to be answered:
- Where will demand for linen, uniform and facility services come from over the next five years?
- Which countries will present the greatest opportunities or challenges?
- How large are the demand sectors and which are the fastest growing?
- How will megatrends such as sustainability and digitization impact the industry, and how will this differ across countries?
The research will be presented at the World Textile Services Congress (WTSC) June 18-19, 2020, in Frankfurt, Germany, immediately prior to Texcare International. Details of the WTSC and the International Textile Services Alliance (ITSA) are at www.itsa-alliance.org.
In addition to providing insights valuable to every operator in setting individual priorities for expanding services and offerings, research findings will guide TRSA in developing industrywide programs. TRSA Board of Directors members’ companies collectively operate in nearly 50 countries, covering every continent. These board members are based outside the United States:
- Randy Bartsch, CEO, Ecotex Healthcare Linen Service Corp., Mississauga, Ontario, Canada, a member of the TRSA Executive Committee
- Jose Luis Jacques, CEO, LAVARTEX SAPI de CV, Miguel Hidalgo, Mexico
- Juha Laurio, president and CEO, Lindström Group, Helsinki, Finland
- Chris Sander, industry relations ambassador, Johnson Service Group PLC, Preston Brook, U.K.
- Joe Sullivan, chairman, Spotless Facility Services Pty. Ltd., Melbourne, Australia
Associate Members (suppliers to the industry) who serve markets around the world will be key contributors as well. They account for half of the 26 global region experts EIU has targeted for interviews.
U.S. Forecast. We anticipate linen, uniform and facility services sales to continue outpacing overall economic growth in 2020 (GDP, projected around 2%) as our industry’s operators pursue targeted growth opportunities.
Presenting at the recent TRSA Annual Conference in Boston, investment analyst Robert W. Baird & Co. estimated that uniform rental and related product lines have reached only about two-thirds of their potential. Linen supply is less than 80% penetrated.
Linen and uniform supply companies excel in recognizing businesses with growing needs to control their costs and improve the convenience of providing reusable textiles to their employees and customers.
TRSA members have stepped up in the past year to promote the industry to such businesses, and while we expect industry revenue to grow across the board in the marketplace, we’re especially excited about these niches:
Long-term Care. These providers are under great pressure to investigate opportunities to save time and money while maintaining effective patient care.
In 2019 TRSA invested in an outreach program to increase awareness of the favorable economics to long-term care providers to begin outsourcing laundry. More than 700,000 impressions were generated from ads in long-term care business media and nearly 3,000 professionals from the industry engaged through e-mail blasts. These are being culled for sales leads that will be available to all TRSA members who serve healthcare customers.
The campaign drove viewers to a web utility (www.trsa.org/oplsavings) that calculates potential annual savings according to a facility’s number of beds. This utility, still operating, is tied to a geographic directory of members, also generating leads. Long-term care operations’ savings from outsourcing have been well into the double digits in percentage; even the smallest can experience five-digit savings in dollars.
TRSA will again invest in communicating with long-term care facilities to generate interest and leads for its members.
Hotels and Resorts. U.S. hotel executives’ priorities in recent years to reduce operational costs and improve resource conservation are prompting them to take a closer look at laundry efficiencies.
Recognizing the opportunity to guide them as they consider more effective practices, TRSA has initiated a Hotel and Resort Laundry-Linen Community. (TRSA has used this tactic in recent years to create a Healthcare Community of more than 2,500 of that industry’s professionals.)
The hotel community kicked off in August with the launch of a benchmarking survey that will improve their appreciation for linen consumption and laundry metrics. We’ll report on this effort’s progress at our 2nd Annual Hospitality Conference in February in Las Vegas.
Our membership recruiting continues to reflect the expansion of this market as half of our newer operator members are relatively recently founded businesses that serve hotels on a customer-owned goods basis.
Facility Services. While the industry’s core products, linen and uniform services, will grow in 2020 in line with the economy, it’s more likely that facility services will grow faster.
Mat rental may represent the greatest opportunity, with members indicating good potential for additional placements on current customers’ floors. As customers’ buildings and equipment get busier, they need to be cleaned more, requiring more mops and towels.
Operators are increasingly recognizing that servicing hygiene products, including restroom soap and paper, as a good fit in their business models.
TRSA is responding to their interest in finding new ways to maximize revenue per account with a Workwear and Facility Services Conference in September in Chicago.
Pressures on the industry likely to become significant in 2020 include publicly owned treatment works (POTW) activity related to microfiber and per- and polyfluoroalkyl substance (PFAS) discharges to sewers. In California, a bill was introduced to require laundries to install microfiber filtration. That measure was dropped, but the state is planning to study microfiber discharges in laundry wastewater.
TRSA’s Environmental Committee is quantifying the extent to which PFAS are used in our industry’s supply chain (flame resistance, waterproofing), recognizing we could be targeted as federal EPA develops a PFAS threshold for drinking water. Whether it’s microfiber or PFAS, linen and uniform services represent a relatively small volume of discharges compared with other sources, especially home laundries, so TRSA will continue to note this difference in our advocacy efforts.
Similarly, ridesharing services (Uber, Lyft) are crowding highways in urban areas, but authorities see commercial trucks as a greater potential source of revenue that cities can tap to solve the problem. New York City’s congestion pricing plans are certain to be emanated elsewhere. TRSA is active in the Big Apple and is monitoring the issue’s expansion.
Another vehicle-related concern: new emission-control measures that will create cost pressures related to vehicle inspection, maintenance, smoke opacity, emission-control devices, carbon intensity in fuel, low-NOx engine design and more.
California remains at the forefront of such regulation; TRSA’s continuing contact with the state’s Air Resources board (CARB) aims to ensure fair treatment of our industry under rules emerging there so we can establish precedent when this issue arises elsewhere.
Regarding potential industry consolidation, we expect some, but not as much as in the past 15 years or so. From 2006 to 2016, the U.S. linen and uniform supply industry lost more than 100 business establishments per year—including laundries, offices, depots and distribution centers. But more than 93% of this loss occurred from 2006 to 2011, as opposed to the latter years.
In 2020, the economy may not grow as much as in recent years, but most economists do not expect a full-blown recession, nothing like the economic downturn during the transition years from the 2000s to the 2010s. Also, the linen sector was responsible for just 3% of the lost establishments back then.
Given that most linen suppliers are independently owned and operated companies, serving more recession-proof customers such as healthcare and foodservice, we are confident in their ability to withstand a downturn. We feel the same about industrial/uniform companies with U.S. employment expected to remain strong in 2020.
Miss Part 1 with thoughts from the Association for Linen Management (ALM), the American Reusable Textile Association (ARTA) and Hohenstein Institute America? Click HERE to read it.
To read Part 2,with insights from the International Association for Healthcare Textile Management (IAHTM) and the Textile Care Allied Trades Association (TCATA), click HERE.