The AOP Buyer Power Score is a new content offering created in partnership with ProcurementIQ that rates the balance of power between buyers and sellers for a particular spend category
Today we are reviewing the janitorial services category.
The Numbers
The current Buyer Power Score for janitorial services is 2.9 out of 5, indicating only marginal buyer leverage. Because of the localized nature of this service, it may be difficult to stimulate sufficient competition to drive prices down among the available options. In addition, the increased sanitation requirements of the last year as well as labor shortages have driven up costs and increased demand, not just for services in general, but for the level of service required at each location.
How to Use this Information
If your contract(s) for janitorial services are due for renewal or re-sourcing, it may be wise to sign a shorter length contract based on current requirements and availability and then completely resource the category once the impact of the COVID-19 pandemic has abated to the point where demand stabilizes and longer term specifications and requirements are known. Otherwise, procurement risks committing to higher prices because of elevated requirements and short term labor cost spikes that will not be in effect through the likely term of the contract.
Dig Deeper
We have partnered with ProcurementIQ to dig into their treasure trove of over 1,000 indirect category intelligence reports, with new insights every Friday. To dig deeper into the janitorial services category, click here.
