Anticipating and Preparing For The Impact of The Minimum Wage Increase International Facility Management Association San Diego Chapter July 8 2015 Todays Agenda Who is this guy and why is he here ID: 210638
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“Sleepless in San Diego”
Anticipating and Preparing For The Impact of The Minimum Wage Increase
International Facility Management Association – San Diego Chapter
July 8, 2015Slide2
Today’s Agenda
Who is this guy and why is he here?
Why is this important to a professional Facilities Manager
What to expect going forward.
Feel free to interrupt!Slide3
Expense Reduction Analysts
700+ Consultants (30+ countries) negotiate terms and pricing with hundreds of suppliers every year.Our world-class category experts specialize in dozens of common overhead cost categories.We’ve completed more than 14,000 cost-reduction projects in the last 19 years with average savings across all categories of 20%.www.expensereduction.comSlide4
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Where Are We Today?Slide6
California Minimum Wage
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Consumer Price Index
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How Did We Get Here?
MinimumSlide9
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Blue collar jobs provided middle class income opportunitiesSlide10
Global
Economic RealitySlide11
The result: A shinking Middle ClassSlide12
Today’s RealitySlide13
Why the movement for increasing minimum wages?
V-O-T-E-S. Slide14
Overall Impact Positive or Negative?
Difficult to quantify:Will higher pay result in less turnover (reduced training costs, reduced recruitment costs, improved expertise)?2006 case study for Costco pointed toward less shrinkage, fraud and errors.Higher paid workers may feel the pinch as scarce resources are redeployed.When low income families earn more, they spend more.Slide15
The OpportunitySlide16
“It is what It is …”
The train has left the station on theMinimum Wage. That being said, there are some things that wecan do to minimize the impact of the impending increases.
Let’s discuss some options we CAN control:Slide17
1) Work with Your Service Providers to Examine and Adjust your Scope of Work or Specifications Documents
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Example: Tips to reduce solid waste costs.
How often are your current trash bins picked up?What’s in those bins? (“Wet” trash? Mostly paper? Recyclables?)How full are the bins?What size bins are you using?
If recyclables were segregated (which would require some internal training and separate bins) what impact might that have on “regular” trash?
Could a compactor be used effectively?Slide19
It’s Not Garbage Anymore …
CA AB 1826: Mandatory Recycling of Organic Waste – food, green, landscape & pruningBeginning 4/1/16, all businesses that generate 8 CuYds/week require one large bin for
organic
recycling.
By 1/1/17, 4 CuYds/week, one regular recycling bin.On-site or organics pickup service for compost, mulch or anaerobic digestion for enery or fuel
Currently >30% of landfill waste and major contributor to greenhouse gas global warmingSlide20
2) Revisit Market Prices!
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3) Evaluate your service provider’s capabilities objectively
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4) Calculate potential cost increases accurately.Slide23
Identify Offsetting Cost Reductions in Other Expense Areas
Janitorial Supplies
MRO Supplies
Landscaping Supplies/
Chemicals
Alarm Equipment Maintenance
Physical Storage
What
about areas
not
typically under Facilities?
Wireless Telecom
Office Supplies
Payroll Processing
Packaging Materials
Shipping CostsSlide24
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“The Show Must Go On”
Sports Franchise Case Study – Service First, but cost a close secondSlide25
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Client Profile
Major sports team and their facility.
Approximately 1,000 employees.
Besides the sports team activity, the facility hosts numerous events
Long-standing vendors for over 10 years.
Service was the most important factor, price a close secondSlide26
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Maintenance / Janitorial
One vendor supplied half of entire spend
Vendor quickly realized we knew what the benchmark prices were
Vendor was able to renegotiate with his suppliers saving our client 30% and his other clients also!
The other half of spend included 8 vendors
Able to consolidate with one buying group saving 20%
Soft cost savings – only dealing with one vendorSlide27
Q & A
Gregory Brown, DirectorExpense Reduction AnalystsGbrown@expensereduction.com858-538-0462 (O)858-531-2775 (C)
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