Outsourcing Custodial Services: PROS and CONS
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1 Outsourcing Custodial Services: PROS and CONS
2 Custodial Benchmarking University Custodial Administrators Network of Ontario (UCANO) collects benchmarking data from universities across Ontario. 12 universities utilize APPA standards; currently ranging from 2+ to 5-8 universities currently have some form of custodial outsourcing in their portfolio
3 60,000 Average Cleaning Areas (SqFt/FTE) 50,000 40,000 30,000 20,000 10,000 0 A B D E F G H I J K L M N O 30 Average Sick Days FTE/year A B D E F G H I J K L M N o
4 About Wilfrid Laurier University Waterloo: 15,000+ students 2,400,000+ sqft building space 1,700,000 in-house, 700,000 outsourced 55 custodial staff, 2 Area Managers Brantford: 3,000+ students 500,000+ sqft building space, all in-house 10 custodial staff, 1 Area Manager
5 About Wilfrid Laurier University September 2013: 79 FTE 27,000 sqft/fte Average 19 sick days/fte Late 2015: 67 FTE 31,000 sqft/fte Average 19 sick days/fte
6 About Wilfrid Laurier University Mid-2016: Negotiated wording into the CA to reflect opportunities to outsource custodial services Intention to contract custodial services through natural attrition Late 2016: offered Early Retirement and Early Exit Programs to custodial staff 16 staff members accepted the offer
7 About Wilfrid Laurier University January ,000+ sqft outsourced Lengthy RFP process and contract negotiations Slow start, initial drop in cleaning levels/customer service After 2017 Unknown contracting out through natural attrition Reviewing existing staffing models
8 PROS Flexibility in cleaning schedules and frequencies Opportunities to create efficiencies over time Sick time coverage, only pay for work completed CONS Staff Turnover Onboarding and training for new hires Delay in services Operational Cost Savings?
9 Panel Format Each panelist will have an opportunity to present their outsourcing plan Questions will be held until the end of all presentations Questions can be directed to an individual panelist or to the group as a whole
10 Five Questions What led your institution to consider outsourcing? What model(s) did you consider and what lead to the decision? What challenges did you encounter in initial implementation? Are there ongoing issues (i.e. quality, cost) Lessons Learned?
11 Outsourcing of Custodial Services OAPPA 2017.
12 Campus Facts Over 3 million square feet of building space 52 buildings
13 Outsourcing Process Phase 1 Senior Administration was presented data and a high level plan of outsourcing in June Messaging ( theme of outsourcing decision), selection of buildings (3), communication plan and draft Request for Proposal (RFP) was developed July to November CUPE 1001 Union informed November 13, RFP issued, evaluated, and awarded end of December Vendor on site January 02, Plan of retirements / terminations was moving faster than anticipated. The 2 year no contracting out clause from the Union negotiations was expiring Summer 2015
14 Outsourcing Phase 2 Phase 2 of the outsourcing was implemented in October Phase 2 outsourced 6 more buildings, approximately 30% of the campus square footage is now serviced by the vendor.
15 Outsourcing Phase 3 Absenteeism continued to be a challenge. Implemented in May Phase 3 was the elimination of the midnight shift and moving all staff to days and afternoons to assist with this absenteeism.
16 What Led Your Institution To Consider Outsourcing? The role of Executive Director, Facility Services and Vice President, Planning & Administration each had a turnover in 2011, so change was prevalent.
17 What Led Your Institution To Consider Outsourcing? Dirty buildings Numerous customer complaints to Facility Services and the President s Office Cost Staff performance issues: o Attendance o Lack of motivation
18 Models Considered and What Led To Decision Made uwindsor was investing millions of dollars into establishing a downtown precinct of multiple buildings staff were required to be hired. Hire internally into a culture of high absenteeism and dirty buildings or take the opportunity to provide a different delivery model? Request for Proposal (RFP) was performance based and not strictly based on cost or a specific staffing level. A standard level of cleaning was requested in the RFP (APPA Level 2) and the vendor decided how many staff to employ to meet this standard.
19 Challenges Encountered In Implementation Short window to execute the hiring of a vendor. The Union was notified November 13, 2012 and the President was clear he wanted the vendor on site January 02, Facility Services finalized the Letter of Intent with the vendor on December 23, 2012 at 5:00 pm. Facility Services was on site New Year s Eve with the vendor allowing them access to the selected buildings and orientating them to the campus (keys, custodial storage rooms, etc.)
20 Challenges Encountered In Implementation Limited media coverage responded to by the President. Small rally of Unions (internal and external) at a Board Meeting in November The Union filed a Step 3 grievance which led to arbitration. Protection of Interest clause the employer can contract out provided no unionized member is on lay off. Arbitrator upheld contracting out, only item specified in the ruling was how existing staff would be re-deployed (by seniority).
21 Ongoing Issues None. When vendor arrived on site, level of cleanliness was challenged was easy for the vendor to make substantial improvements. Customers were forgiving early in the switch, now they have expectations which the vendor must meet consistently.
22 Lessons Learned Implement changes outside of any collective agreement negotiations. Need clear, concise messaging that all can adapt to quickly uwindsor had one word.students. Selection of buildings in all phases to be outsourced need to relate to the messaging. Who delivers the decision to the Union uwindsor President. A Phase 2 implementation was not clear in the original RFP, didn t cause major issues but needs to be refined.
23 Lessons Learned Negotiations with the Union in Summer 2013 were challenging, several Memorandums of Understanding were required, but no changes were made to the overall outsourcing plan. Negotiations with the Union in Summer 2016 were dramatically different. There is acceptance of the outsourcing, the Union proposed a 6 year agreement which was acceptable to Management. Union Management relationship has substantially improved, there is mutual respect, and the Union understands Management has options.
24 Statistics Pre and Post Outsourcing Effective Full Time Staff (EFT) Average Sick Days Estimated Yearly Saving $336, $200, $300, $237, Note; Estimated Yearly Saving is to provide a Level 5 cleaning, the saving would be much greater if a Level 2 was required. The contracted space is the Campus most user intense space, and about 85% of all event set-ups take place in those buildings.
25 Alternative Delivery Method- Custodial Services Currently have a blended service of in-house and contracted providers Contractor services are only delivered at our satellite sites Three satellite sites totaling 185,000 Sq. Ft. Decision to explore alternative services was based on financial reasons Contracted Services have been in place for 10 years and expanded two years ago with a new satellite building brought on-line. Contractor was selected based on RFP process which was advertised on MERX Services levels establish by University Five year contract 3 years + 2 additional years Average cost of contracted services $1.09/ sq.ft (gross)
26 Alternative Delivery Method- Custodial Services In- House Operation Basically in house services operating on Main Campus 1,822,444 Sq. Ft ,670 Sq. Ft. Residence Operate 3 Shifts 59 Cleaners, 13 Residence Cleaners, 4 floaters, 2 recyclers & 10 casual part-time cleaners (cover absences of FTE) APPA Level 2 to 2.5 Average Cost $2.46/ Sq. Ft. (Gross)
27 Alternative Delivery Method- Custodial Services Advantages of Contracting Out APPA Level 2 Cleaning Appearance will remain intact operating savings No new equipment or replacement equipment is required for the duration of the contract Supplies are provided by the service provider Supervision is provided by the service provided Absenteeism is a non issue continuous coverage provide QA and follow-ups conducted by service provider Flexibility in staffing/ hours of work/ split shifts Summer cleaning & floor restoration scheduled and provided by service contractor
28 Alternative Delivery Method- Custodial Services Disadvantages of Contracting Out If completed via Attrition, process is slow and in-house employees have to be relocated to other buildings, If the Bumping Process is used, will displace a number of custodians and these custodians will need to become familiar with their new assignment as well as become acclimatized to the changing environment. Casual cleaners ( part time) will be displaced and unemployed. Custodial Services will have an initial heavy training load with the new service provider Initially, there will be considerable labour unrest
29 Alternative Delivery Method- Custodial Services Challenges Encountered Collective Agreement job security of members no layoff or reduced hours as a result of contracting out. Grievances Arbitration Ruling In favour of the University RFP process time consuming to ensure all provisional items listed and scoring criteria
30 OUTSOURCING CUSTODIAL & CLEANING SERVICES
31 Terrence Donnelly Ctr for Cellular & Biomolecular Res (DC) 160 College Street Toronto M5S 3E1 UofT Building#: 160 Year of Construction: 2004 Leslie L. Dan Pharmacy Building (PB) 144 College Street Toronto M5S 3M2 UofT Building#: 161 Year of Construction: 2004 Gross Area: 16,832 Sqr Metres
32 Caretaking Budget Caretaking Budget Cost Breakdown 100.0% 90.0% 80.0% 91.4% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 5.8% 2.8% 0.0% Labour Supplies & Equipment Management
33 Staff Levels (FTE) Cleanable Space (Square Meters 000's) 450 Cleanable Space and Caretaking Staffing , , Fiscal Year Staff Levels (FTE) Extrapolated Staffing levels based on Space Increases Cleanable Space (Square Meter 000's) 0
34 IN-HOUSE LABOUR PRODUCTIVITY ,000 Productivity - Sq. Ft. per Day 35,000 30,000 25,000 20,000 15,000 10,000 5, / / / / / / / / /14
35 SQUARE FOOTAGE BY AREA TYPE 19% 18% Public Circulation - day / evening Teaching Space Recreational Space 10% Circulation space, elevators, stairs etc. Washrooms 6% 4% 2% 7% 12% 22% Libraries Teaching Labs Research Labs Offices
36 University of Toronto Cleaning Specifications APPA Levels 1thru 5 Task + Frequency Comparisons Task Frequency Key 260 = The task is repeated 5 Times Per Week 208 = The task is repeated 4 Times Per Week 156 = The task is repeated 3 Times Per Week 104 = The task is repeated 2 Times Per Week 52 = The task is repeated 1 Times Per Week 12 = The task is repeated Monthly 1, 4, 48 = The Number of Times Task is repeated Annually AREA TYPE TASKS FREQUENCIES Level 1 Level 2 Level 3 Level 4 Level Auditorium - Carpet Frequency Frequency Frequency Frequency Frequency 1 Trash - empty APPA - Clean trash containers - Classroom Dust and spot clean Furniture Dust ledges, pictures and moldings Vacuum - traffic lanes only Carpet Clean - Spot Shampoo Dust Low Only Damp dust APPA - Spot-Clean walls and doors - Auditorium Seating and Foyer Vacuum " Upright - full area Dust High only Dust baseboards Carpet Clean - Wet Extract Relamping (Daily Adjusted) Foyer only (20% of space) Auditorium - VCT 1 Trash - empty APPA - Clean trash containers - Classroom Dust and spot clean Furniture Dust ledges, pictures and moldings Dust Mop - 24" Spot mop Dust Low Only Damp dust APPA - Spot-Clean walls and doors - Auditorium Seating and Foyer Damp mop with 24oz mop/double bucket & wringer Dust High only Spraybuff w/20" rpm Machine & finish restore Dust baseboards Strip only Floor finish or sealer - Lay 3 coats Relamping (Daily Adjusted) Foyer only (20% of space)
37 DISTRIBUTION OF LABOUR BY AREA TYPE
38 Improve In-House Labour Productivity Training Program Biometric Attendance Monitoring Entrance Matting Ride-On and Walk Behind Scrubbers Wide Area Vacuums Robotics Floor Treatments
39 Cost Plus Contracts Contract Length Short Cancellation Clause Fixed Costs Adjustable Costs: Labour, Service Level
40 Contracting Out Calculate Savings Approach: Attrition Build Support Communicate Separation: Legal Contracts
41 Potential Issues Operational Effectiveness Supporting Documentation Prepare for the worst case scenario - Strike - Media - Backlash Clear Separation
42 Dollar Savings
43 Any Questions. Thank you
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