Are Good Times Ahead? Ask the Janitor
As reported by CBS and BNET.com.
If you want to know whether your company — or your clients — are experiencing solid, long-lasting growth, one place to look for a clue is the janitors, the security guards and the parking lot attendants. Are they hiring or firing these ancillary staff?
Henrik Slipsager, CEO of ABM Industries (ABM), which provides cleaning, security, and parking services, says revenues at his company will increase in the fourth quarter of 2010 for the first time following 18 months of declining sales. The rest of the economy began growing in the third quarter of 2009, so why was ABM so far behind?
It’s because ABM is one of those companies that is a lagging indicator for economic growth. Companies tend to make choices about office-cleaning and parking staff late in the chain of decisions they go through whenever they shrink (in recessions) or grow (during booms), Slipsager says. If a company needs to reduce its staff from 30 salespersons to 20, there still needs to be a janitor emptying the trash cans at night, even if there’s less trash. Similarly, the parking lot booth requires an attendant whether it’s empty or full.
This makes ABM a recession-resistant company, says Slipsager, who appears on CBS’s Undercover Boss this Sunday at 9 p.m. ET/PT. He told BNET:
"Well, I think you can see on our numbers, the background, that we are pretty resistant to recessions. You see it in the bottom line and the major impact was a 4 percent downturn on the top line, I think we’re very pleased with that. Most of it was us canceling accounts before they went bankrupt, so we were pretty proactive from that perspective. What symbolizes our business is that we are a needed service, so we are recession resistant and normally when we get hit we get hit a little later than anybody else."
On the show, Slipsager tried his hand as an airport driver, a window-washer and an elevator operator and a janitor — yes, he cleans toilets — and discovers that the jobs are trickier than they look. And that he’s not very good at them.
ABM emerged from the recession a little later than everybody else. Companies can add on dozens or hundreds of new employees before they need to open a whole new office or site that would require extra security or cleaning staff, Slipsager says:
"They’re hiring, things are going good, they’re hiring the sales people back, they’re hiring other people back. But before they get us back up to the level we were before, it takes time. We’re the last one where they adjust. So it’s just a delay more than anything else."
Slipsager’s company ended a salary freeze in January this year and he’s begun adding to his 91,000-strong workforce again:
"This quarter we have told the world that for the first time in, I think, six quarters, we have year-on-year increases. We expect year-on-year increases in sales, on a same-store basis. Which is a good indication of a turnaround."
Disclaimer: Please note that Facebook comments are posted through Facebook and cannot be approved, edited or declined by CleanLink.com. The opinions expressed in Facebook comments do not necessarily reflect those of CleanLink.com or its staff. To find out more about Facebook commenting please read the Conversation Guidelines.