CHICAGO — Many changes have taken place in the laundry and linen services industry over the past few years.
And many challenges have appeared and are ongoing.
So, what is the state of the industry today? What could happen in the future? Where is the industry strong, and where does it need to improve?
American Laundry News communicated with three operator representatives to find out their insights, hopes and concerns for their businesses and the industry.
Those involved in the discussion included Bryan Bartsch, president of EcoTex Healthcare Linen Service in British Columbia, Ontario, Washington, New Mexico, Oklahoma, Nebraska, and Iowa; Eric Yeakel, vice president of administration for Hospital Central Services Cooperative Inc. serving New York, New Jersey, Pennsylvania, Maryland, and Delaware; and Asit Goel, vice president of marketing for UniFirst, one of the largest workwear and textile service companies in North America.
The past few years have been challenging, to say the least, and the challenges continue. Start by sharing a brief look at the status of your business today.
BARTSCH: Ecotex has experienced growth during the pandemic, adding new accounts and new products. We have also experienced a 6% volume erosion from current customers who restricted the hospital capacity to manage COVID and are dealing with their own staffing shortages. I expect demand for our reusable products will remain strong into the foreseeable future.
The current challenge we are all facing is with staffing. The backbone of the laundry industry is the large workforce that serves customers each day.
Currently, all laundry operators are challenged with the low workforce participation and increased wage rates. Right now, there are two jobs available for every person who is seeking employment and the workforce continues to shrink as baby boomers retire.
The underlying supply of workers needs to be addressed. Increasing eligibility and immigration are both immediate ways that the government could improve the workforce situation and help businesses fill the many vacant service sector jobs.
The laundry industry requires more access to service sector workers and further plant automation into the future.
YEAKEL: Hospital Central Services Cooperative has been, and continues to be, a leader in healthcare linen rental services throughout the Mid-Atlantic region of the United States. We differentiate ourselves through our top-tier quality and service programs, which are instilled in our mission statement of “Partnering Together to Enhance the Patient Experience.”
We have five linen processing plants operating in Pennsylvania, New Jersey and Maryland. Our newest plant in Camden, New Jersey, was built during the height of the pandemic through our partnerships with JENSEN and ARCO/Murray.
We currently serve 135 acute care hospitals and over 2,200 outpatient centers through our Ambulatory Care division.
GOEL: UniFirst continues to have stellar performance in terms of overall revenue and continues to be financially strong with no debt. This means that we can invest in the future and in continuing to build out our service capabilities for our customers.
Yes, the last few years have been challenging, first with the COVID-19 pandemic and now an increasingly inflationary environment. We are thankful to thousands of our team partners, who continue to deliver for their customers, their teams, and their communities.
Our main focus is and will always be to be there for our customers as they build their businesses in these challenging market conditions.
What crisis has been most challenging for your operation to overcome? Why?
BARTSCH: Early in the pandemic we faced immediate labor shortages because of the uncertainty related to safety. That initial fear was replaced by countless government programs that made employment situations worse for essential service companies.
A survey conducted by the U.S. Chamber of Commerce reported that 70% of the respondents who used employment insurance programs during the pandemic made more money by not working. Currently, the low unemployment has made it difficult to fill open positions and we are seeing greater quit rates.
Parts and equipment availability issues have been challenging over the past six months from some of the key equipment.
YEAKEL: This is difficult to answer because there are so many different variables at play for all of our operations. I’ll focus on the human resources piece.
We went through a “Great Resignation” with some of our local office staff while enduring months without anyone filling out applications for our open production positions. There was a severe lack of CDL-A drivers and a very small pool of mechanics with acceptable qualifications.
Most of these jobs are union positions, so to be competitive with wages, we needed to open up collective bargaining agreements (CBAs) and renegotiate.
GOEL: In my opinion, the impact of the pandemic has been the most challenging crisis. Virtually every business on Main Street across North America was affected. The pandemic and the resultant supply chain issues hit every business hard.
This reminded us that because we serve essential businesses and workers, be they vaccine manufacturers or be it Aunt Amelia’s trattoria down the street, the work we do here is essential because our customers depend on us for critical uniforms and services to do what they do best.
What steps did you take to overcome that challenge?
BARTSCH: We have needed to be resourceful in finding sources to hire staff. Ecotex carried larger stocks of parts and linen inventory to help mitigate delays that impact our customers.
YEAKEL: We viewed the wage piece as an opportunity to extend union CBAs, keeping most language discussions out of the narrative and focusing on increasing the hourly rate.
We were successful with this strategy. The employees had the immediate gratification of a wage increase, and we avoided negotiating more vacation and personal time, among other things.
We started getting more applicants through the door via word-of-mouth and referrals, which was a win-win situation.
GOEL: We remained successful as a business throughout the entire pandemic and remain successful today as we are navigating a post-pandemic world.
This is because we continue to listen to the business needs of our customers and have a strong service culture in our team partners all over North America. This allowed us to focus on the basics of taking care of the customers and providing them with what they need exactly when they need it. Period.
Read the conclusion Tuesday when the insiders share about business in 2022, the challenges to come and how the industry has changed.
Have a question or comment? E-mail our editor Matt Poe at [email protected].