PEO Helps Cleaning Company Get Their "Shine" On
How A PEO Can Help Commercial Cleaning Companies Shine
Do you work in an office building? If not, take a visit any busy business district with office buildings, especially late at night, and you’ll probably see a bunch of cleaning company vehicles parked outside the building, or a cleaning company staff moving quickly while busily cleaning everything in their path, emptying trash cans, replacing liners, scrubbing toilets, spraying down windows, sanitizing heavy contact areas, and polishing floors. There is no shortage of demand for commercial cleaning services.
If it seems like these cleaning crews are everywhere, you would be correct, they are literally everywhere – the numbers back it up too. In the U.S. alone, there are more than one million commercial janitorial services businesses in action and as of May 2020, they employed nearly two million plus janitors and cleaners. But wait – there’s more! and no, it’s not a SHAMWOW!! The commercial cleaning industry is expected to grow at a rate of 5.4% percent annually through the year 2025, meaning that the demand for qualified employees will continue to rise.
Therein lies one of the main issues for the commercial cleaning industry and its companies, according to Patrick Moraites, a partner and vice president at Tampa-based Axis Group.
“Many commercial cleaning companies initially subcontract out a lot of their work and then come to find out the quality of cleaning isn’t to the specifications of the client,” he said. “Or they end up discovering that one of their subcontractors took an office key, made a copy and handed it to someone else who wasn’t vetted by the client. Those things can really hurt you in terms of client retention.”
Plus, on a more serious level, there is an inherent risk when it comes to hiring subcontractors because majority of the time, the cleaning company isn’t confirming that the subcontractor has the appropriate insurance coverage or that the people the subcontractor hired are legally allowed to work in the United States.
“From a legality and compliance standpoint, if a cleaning company was to be caught by the Department of Insurance or the Department of Labor with an illegal employee, or improper insurance coverage, the fines they would incur would be hefty,” Moraites said.
“So in a nutshell, while you may think you’re doing yourself a favor by outsourcing the actual cleaning labor and saving a little bit of money on insurance, it could really end up backfiring costing you exponentially.”
In an ideal world, cleaning companies would hire their own W2 employees so everything would be on the up and up legally, but many company owners feel like it’s just not possible or too expensive to do so. What they may not realize, however, is that help is out there and it comes in the form of a PEO.
A PEO, or Professional Employer Organization, is a single source provider of integrated services that allows business owners to outsource a number of their administrative and employee-related functions. Additionally – and this is huge – PEOs can help cleaning companies get workers’ comp coverage from leading carriers at affordable rates.
“It’s not uncommon for there to be injuries from slip and falls when you’re cleaning floors or standing on step stools to clean windows,” Moraites said. “With a PEO, you can have the appropriate insurance in place to help protect you and that gives your clients peace of mind that you’re not going to come after their general liability coverage.”
In addition to securing insurance, PEOs can support cleaning companies in a number of other ways including:
- Assisting with tax forms such as W2s
- Setting up payroll processing
- Checking that new employees have proper documentation to work in the U.S.
- Handling unemployment claims
- Conducting background checks and drug screenings
- Ensuring labor law compliance
By hiring a PEO, cleaning companies are covering themselves legally but at the same time, they’re making themselves more attractive to potential clients.
“If you can go in and say that your cleaners work for you and you’re not contracting out the work, you can guarantee that you have quality control measures in place,” Moraites said. “That will often make clients, especially the bigger ones, feel a lot more comfortable about doing business with you.”
Wondering if a PEO could be the right solution for your cleaning company? To learn more about your options, contact the team at Axis by clicking here.