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Reducing work uniform costs

CCM saves 23% on uniform expenses for security business

employee-work-uniforms
Employee uniforms can be both a high-value and high-cost proposition – especially for companies in industries like food service or small parcel shipping, where the percentage of employees required to wear a uniform may be greater than the number of employees who don’t have this requirement.

Work uniforms deliver many benefits to employers:

 

  • Brand extension – employees in uniforms are like walking billboards! Perhaps no company has done this better than UPS with its ubiquitous “brown” presence in its uniforms, trucks and advertising messages.
  • Employee professionalism – uniforms ensure that all employees look polished and professional, especially important for those with customer-facing jobs, like front-line employees in retail financial institutions.
  • Employee visibility – uniforms ensure that employees are quickly recognized and highly visible, which is important for roles like security guards.
  • Customer satisfaction – according to research done by JD Power and Associates (2008), 75% of people surveyed preferred employees in uniform, believing they were more competent and professional.

Generally, companies that mandate work uniforms provide them free or at cost, with some companies providing a clothing allowance. Employers have a strong incentive to keep uniform costs low, for the employee’s sake and because the business benefits are too great to eliminate this expense altogether.

Employee benefits of work uniform requirements

The employees required to wear uniforms enjoy their own benefits – for example, the savings in work-related wardrobe expenses, a greater feeling of pride, and a stronger sense of authority and responsibility on the job.

US federal regulations regarding business uniform expenses

The Fair Labor Standards Act outlines regulations for work uniforms, stating essentially:

“The FLSA does not require that employees wear uniforms. However, if the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer.”

Additional rules are mandated by the Occupational Safety and Health Administration (OSHA) Uniform Law. OSHA requires employers to pay for “personal protective equipment” for certain workers, more commonly referred to as PPE. OSHA requires PPE (such as helmets, work shoes, and goggles) for specific industries and hazardous jobs, to protect the employee from serious injuries or death.

Making sure work uniform benefits outweigh their cost

I mention these benefits because, while they are quite valuable, they represent soft dollars. Meantime, uniform expenses are a hard cost. As an indirect spend category, work uniforms are becoming significant, especially, as I’ve already mentioned, in industries with a high percentage of uniform-wearing employees, like shipping, private security and travel and entertainment.

At CCM, work uniforms are a rather recent addition to our indirect spend management portfolio. We became involved with a company that provides private security guards.  This client had been buying uniforms from a variety of local and regional companies, as well as trying to find online resources and “deals.”  This led to a variety of different uniform looks rather than a branded, customized approach for all employees across the country to wear the same uniform – even the same color! More importantly, it also meant that some regions were paying significantly more than others.

By consolidating their total spend with a national supplier, CCM worked with the vendor to help the client create a consistent, branded look – and we were able to save the business 23% on their annual uniform spend.

The cost of work uniforms can be reduced without jeopardizing quality or creating unwanted outcomes. In addition to our spend management methodology that involves assessment of savings opportunities, benchmarking, vendor evaluations, monitoring contracts and invoices and other tactics, following are a few cost-saving ideas that have enabled us to reduce employee uniform costs from 15% to 25% on average.

Work uniform vendors

In some situations, we find that the uniform vendor chosen by a client is not the best match – not just due to pricing, but also because the customer service options are not well-suited to employee needs. Sometimes, certain vendors lend themselves to serving specific industries. Smaller companies can do well by using a regional or local vendor. Because the industry is so fragmented, expert opinion and advice from spend management specialists like CCM, as well as our “vendor-neutral” approach, can make a noteworthy difference.

Work uniform fabric, design and construction

work-uniform-fabricThe design, fabric and construction of the uniform are all factors that affect pricing. If the products are made or even partially assembled in the United States, the pricing can vary widely. Yet, because uniforms are an extension of your brand, it’s important to strike the right cost / quality to balance the needs of all stakeholders for utility, branding, employee satisfaction and other requirements.

Logos and other customizations

Since branding is a major reason businesses adopt work uniforms, customization is a key factor, yet customization drives up costs. Determining just how much is needed, and knowing the options can make a difference here. For example, advances in printing technology have driven down logo customization expenses.  Another cost saving option is to purchase a number of customized company logo patches that can then be sewn on to stock shirts as needed.

Buy versus rent

Uniforms can be rented, though it’s less expensive in the long run to purchase them, and most companies choose that option. Yet depending on your situation, renting employee uniforms may be an option. For example, rental companies handle cleaning and upkeep, removing it from employee responsibility and ensuring the most professional appearance in all cases. This is the route often chosen by companies whose employees have a high likelihood of damaging or soiling their uniforms while on the job, such as certain manufacturing or machining operations, stadium concessions, conference and entertainment venues, hospitals, food service organizations and correctional facilities.  In addition, if you have other rental needs like rugs, floor mats and shop towels, large national rental companies like Cintas and Aramark can offer bundled deals.

Work uniforms have become a necessity in many industries, earning them new status as an indirect spend category with many opportunities for savings. And while uniforms seem relatively simple and straightforward, that’s not always the case. Uniforms are one spend category that necessitate input from a variety of decision-makers, such as facility and marketing managers, not to mention the voice of the employees themselves.

For example, while American Airlines is not a client, the company is facing a current uniform issue that illustrates how uniform decisions can impact a business across many different levels. In this case, it may be what led to the resignation of a key marketing executive involved in the decision. After its merger with US Airways, uniforms were updated for 70,000 pilots, flight attendants and customer service representatives. Soon after, complaints started coming in about reactions to wearing the uniforms such as hives, rashes and breathing problems. While this is an exceptional case, it illustrates how complex uniform decisions can be and why it is worthwhile to take the time to get product samples and test them for fabric content, usability and overall look with some subset of employees.

The value of employee uniforms does outweigh the cost for many businesses. Yet taking a closer look at how to reduce work uniform expenses and manage the uniform procurement process is becoming top-of-mind for finance professionals in industries with high uniform utilization. Employee uniforms are an underserved spend management category, and one in which CCM has some experience and capabilities to balance all the needs and nuances.

Natalya Berdzeni

Natalya Berdzeni

Natalya Berdzeni is Executive Vice President for spend management services at LAC Group. She oversees operations and client development, including the execution of spend programs and their operational support, with responsibility for the company’s financial growth and profitability.
Natalya Berdzeni

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