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Higher Unemployment – Less Candidates?

Earlier this year I was in Phoenix, attending the annual Tech Summit for our laundry industry. The small talk always seemed to lead to the same question, “are you flooded with candidates these days (with the current economic climate)?” Actually the answer is no, for several reasons.

Decreased laundry plant revenues, or for that matter decreased hotel occupancy rates/hospital census rates tend to impact employment initially at the non – exempt level. Route based plants providing food & beverage linen service or uniform rental will first look to “cut out a route” and laundries in general may cut back to a 35 hour work week. What is more noticeable is the lack of management candidates who elect to make a career move for the traditional reasons. Year after year the reasons are always the same.

There will be individuals at the larger companies who don’t like the GM who has transferred in or, at the independents, the manager who feels uneasy with the ever evolving dynamics of too much family mixing it up. Then there are the potential candidates who feel stagnant in their current positions and want to spread their wings. Sometimes it is a personal family issue – the employee has aging parents in a different part of the country who would like to see their grandkids more. Historically, in a slow economy, potential candidates will “sit tight” and not take the inherent risks that go along with a change in scenery. They will put up with the boss they don’t like or designate their vacation to see their aging parents.

The House Anchor

I would point to another more significant reason why there appears to be less “available” candidates - the slow real estate market. Of the placements my business made during these past ten years 57% involved candidate relocations, and 35% of those were home owners. As you would think, there is a natural tendency during a management search to hire a local candidate. Legally a prospective employer cannot ask whether the applicant owns or rents a home. The truth be known however, an employer can have as many sleepless nights as the newly hired manager who still has his home for sale 6 months later, and the home is an airplane flight away. It is not just the extra expense of temporary lodging and return trips home the employer is concerned about, it is knowing the distraction may be affecting the performance of their talented new hire. My relationship, however, often starts out more as a career counselor; giving advice and helping the individual strategize about their next career move.

Delaying the career move for the summer months when school is out, or when the youngest child has graduated high school, or keeping the existing home as a rental income property often is part of the career discussion. Unfortunately in our industry any one town or city may be limited to the number of career opportunities, and sometimes non compete employment agreements discourage an experienced manager from walking across the street to a direct competitor. Factor in slow moving home sale listings in most towns and neighborhoods and you may have a candidate looking at local opportunities outside our laundry industry. Owning a house may have helped build equity in previous years, but in our current real estate climate, it can serve as a bit of an anchor for the laundry industry manager who is motivated to make a career change. Some homeowners have gotten over the bitter pill of losing equity with fire sale pricing by hoping they can “steal” a house in the new location. But even with reducing the listing price there is still the hurdle of finding a pre-qualified buyer who can get a mortgage approved. If you do and you can orchestrate the home sale then you are home free, although you may have to jump through some hoops to qualify for a home at your new location, since you will be starting new employment.

The Renter's Advantage

All this may come as no surprise to potential candidates who are currently buying their home and considering their career options. But here is the hidden secret to those who are currently renting and contemplating a career move – you have much less “competition” than you normally would within the laundry industry. Where typically a candidate may have to compete with 5 or more candidates with industry experience, now the interview process may have only 2 or 3 candidates on the “short list”. This could apply to your local area where out of town home owning candidates are minimized, or to a location somewhere in the US you would like to move to. Keep in mind most employers will assist in the expense of moving your household goods and the temporary living expense. If you are in fact renting, then there is nothing illegal or unethical about mentioning it during the interview process. On the other hand, if you are a home buyer but have a strategy in mind of keeping your home as a rental, or staying with extended family in the area until your home sales then volunteer that information to your prospective employer.

Superior Talent Seldom Seem

If you are the employer perplexed about the short list being too short, then this could be a time when you take a closer look at management candidates without laundry industry experience. There may be local management candidates recently laid off from manufacturing plants with credentials seldom seen in our industry. If you ask the right interview questions you may indeed spot superior management skills, the ability (and preference) to work effectively in a stressful environment, routinely leading safety meetings, and a strong focus on production efficiencies.

How Long Until The Good Old Days?

How long will home listings languish in the 4 plus month average? The peak selling season of April and May 2009 will be a barometer, my guess is we will not get close to the 60 – 90 D.O.M. (days on the market) until the spring of 2010. Until then, good luck and good interviewing!

Quick Rinse - News From Around The World

Faultless Laundry Spending $12 million on New Plant

ST. LOUIS, Mo. — Faultless Laundry Co. is spending almost $12 million on a facility to accommodate its growing St. Louis business which has grown from 28 million pounds to 36 million pounds due to a new contract. Faultless serves more than 30 acute hospitals and over 400 retail medical locations in the St. Louis and Kansas City areas.