Manpower restructures
Published:Friday | January 28, 2011 | 12:00 AM
Deepens footprint in placement market
Regains footing with 4 new cleaning contracts
Avia Collinder, Business Writer
Janitorial and maintenance management company Manpower and Maintenance Services Limited has put in place a "modest" marketing budget of J$10 million to promote its training and placement services, for which there has been increasing demand, the company has said.
The new spend builds on investments of J$15 million made over the previous two years, 2009 and 2010, in hiring HR professionals, setting up new office space in Montego Bay and paying for a new information technology platform, said chief executive officer of the 20-year-old company, Audrey Hinchcliffe.
Manpower has also added 60 new workers to service four new janitorial contracts at a bank, a new shoe company which is coming to Jamaica, and a new development in Falmouth, starting this January.
The only shoe company reported to be coming into the market is US company Payless ShoeSource.
These latter developments will go far in replacing revenue lost since mid- 2009, which fell at a rate of around J$15 million monthly, according to Hinchcliffe.
Hinchcliffe said the business contracted 25 per cent over five quarters up to the close of calendar 2010.
The loss of business translated to the erosion of J$3 million of profit, the Manpower CEO told the Financial Gleaner.
The losses were partially due to increased competition and the termination of three large contracts in 2009 and 2010, as well as cut-backs by clients seeking savings in their companies.
Hinchcliffe said it forced her company to become much smaller but "more efficient".
"Following the loss of major contracts we brought in consultants, looking at our organisational structure, policy and procedures, and to rationalise the operation which had become top-heavy and inefficient," said Hinchcliffe.
"We had the same fixed costs while we had lost revenue. The restructuring involved a new organisational structure, reassess-ment of roles, new titles and retraining. We had grown just too big. We were not happy with either management or productivity," she told the Financial Gleaner.
It also led her to seek out new income streams.
The company registered a new subsidiary, Manpower Placement Agency Limited (MPAL), during the period of the recession to manage growing business in placement services and human-resource management for Jamaica and within the Caribbean.
'Significant' over time
While saying that it was early days yet to say how much the building out and promoting of its placement arm would possibly add to revenue, Hinchcliffe signalled that she expected the contribution to be 'significant' over time.
Under local labour laws, workers are charged J$500 annually for placement services, and the equivalent of one week's pay after placement.
Where a company or employer has requested the placement, the rate is negotiated.
Other companies have asked MPAL to manage their entire human resources needs including the organisation of insurance and other benefits to workers, the Manpower boss said.
Demand for job placements has been growing across Jamaica and in The Bahamas, and placement ofservice information on Facebook and Twitter has also brought enquiries from North America and other countries, Hinchliffe told the Financial Gleaner.
The company is also looking at expanding placements to the Cayman Islands.
The company trains and places executive housekeepers, land-scapers, pest-control workers, among others. It is excluded from placing farm workers and hotels workers in the United States and Canada, as per restrictions imposed by the Ministry of Labour and Social Security (MLSS), which keeps that business for itself.
"We are doing well. Our last report to the MLSS showed placement of over 100 workers out of 300 who signed up with us," said the Manpower CEO.
For its janitorial arm, Manpower now has 1,200 full-time and 200 part-time workers, and services between 180 to 190 client locations monthly.
Its chief clients include, corporations with multiple locations, hotels, hospitals, the wharves and airports.
To overcome the contraction in business from contracts lost, Manpower began to reshape its operations, asked staff to take pay cuts and reduced benefits.
The company turned to renting office space, specially for training by other organisations, cutting back on its own operations both in Montego Bay and Kingston in order to do so. It also sold older vehicles owned by MML and bought bikes for transport, instead.
The use of new software has added to efficiency, according to Hinchcliffe who says that WinTEAM, an integrated labour, operations and financial-management solution, provides timely information, enabling quicker decision making.
The company also renegotiated loans with its financiers, asking for reduced interest rates and longer payment periods, which they got in all cases, Hinchliffe said.
She also negotiated price reductions with suppliers and asked creditors for time extensions in making payments.
"We still had fixed costs. We had to find ways to reduce our expenses," said Hinchcliffe.
"Our payments were maybe a little later, but we never defaulted on anyone. We have emerged with our good name intact."
Manpower did not cut staff, but it also did not replace workers who left the company. Those who stayed got cut wages, and additional duties, and the lunch subsidiary disappeared with mutual agreement — altogether saving the company J$1.7 million monthly, Hinchcliffe said.
Surviving the recession, she said, was done "on the back of workers" and patient creditors. But with new business flowing in, Hinchcliffe says she plans to reward workers who stayed through the bad times with a new incentive scheme.
Incorporated on May 4, 1990, Manpower was established primarily to provide janitorial, building and grounds-maintenance services to health-care institutions. Its services now include carpet care, pest control, landscape design and maintenance, maid service, plumbing, carpentry, the cleaning of entertainment venues, and provision of washroom supplies.
The company owns property at 1 Eureka Avenue and on Collins Green Avenue in Kingston; and at 16 East Street in Montego Bay, where offices and warehouse space on the first two levels and training facilities on the third, are leased.