Over the last two years, I have hosted eight live workshops for janitorial contractors covering high-level sales and operations concepts. Questions that I repeatedly gets asked include: “How do I decide what the workload should be for each of my area managers or supervisors?” “How many buildings or employees is a reasonable management load?” “How much total revenue should be under their care?”

These questions, and others like them, are not easily answered. There is no rule of thumb, as each management circumstance is so different. However, there are a few considerations to help guide your decisions: first, look at the cost of the area manager and the accounts they are managing as an individual profit-and-loss center. The total profit from the accounts minus the expenses associated with the manager should still yield a healthy margin. Ideally, this profit (after manager expenses) should be around 25-30 percent.

For example, let’s say the total cost of a manager — including salary, taxes, benefits and vehicle — comes to $60,000. The total annual revenue for the accounts this manager oversees is $600,000, with an annual profit of $210,000 (35 percent). If you subtract the manager’s cost from the total profit, you end up with $150,000. This means that after manager expenses, you profit 25 percent on all accounts.

When deciding how large the account load should be for each manager, make sure that when all is said and done, an adequate margin remains. Some groupings of accounts will be more profitable than others, but all of them should fall within a similar range.

The next thing to consider when assigning accounts to area managers is geography. The more geographically dispersed the accounts become, the more windshield time the manager will incur. Therefore, you want your accounts to be grouped as tightly as possible. A radius of 20 minutes would be ideal, but 30 minutes is acceptable. Sometimes you will have an account or two that is remote, perhaps an hour away. These accounts will work if they do not require too much attention from the manager.

Finally, looking at existing manager loads can help you gauge the appropriate range. At our company, we have nearly 30 managers, some managing single accounts and others overseeing as many as 25 buildings. Eleven of these managers oversee multiple buildings. Of those, the average monthly revenue they oversee is $51,200. The average building count is 16; the average number of employees is 29; and the average man hours per week is 830.

Using the profit-and-loss method, combined with geography considerations and industry averages, you should be able to come up with a good benchmark for area manager workload in your janitorial company. While it may seem complicated, the goal is simple: satisfied customers, profitable accounts, and optimal manager efficiency.

Jordan Tong is a BSC consultant and founder of Elite Business Coaching, in addition to being a third-generation owner of Frantz Building Services based in Owensboro, Kentucky. For more information on his coaching services, visit www.elitebusinesscoaching.net.




POSTED ON: 3/15/2022