Renting vs. Purchasing
Employees of public agencies should feel confident and comfortable in their uniforms, whether it’s a construction worker who needs to remain highly visible to work safely or maintenance personnel who need durability while managing their grounds. However, public agencies also need cost-effective solutions for their uniform needs.
In the current economy, many public and government agencies have had to reduce their spending budgets and often consider uniforms as a place where cuts can be made. Agencies therefore look to rent uniforms instead of purchasing as a cost-saving solution. However, renting might require agencies to sign up for a lower-quality product and might involve unforeseen higher costs.
A standard-term contract for an industrial laundry uniform rental program is a five-year commitment. If an agency is unhappy with their service, it can be difficult and expensive to break the contract. The terms of a rental contract might specify the laundry is entitled to multiple percentage price increases during each year of the contract.
Unplanned added costs can have a dramatic impact on the total cost for renting uniforms. Most bids compare the financial impact of a uniform program using only unit pricing. However, as much as 20 to 40 percent of the annual costs for rental uniform programs come in the form of ancillary charges, which can cause agencies to exceed their uniform budgets year after year.
Let’s compare the average flat rate garment costs for renting and purchasing uniforms solely from a monetary standpoint: An estimated average flat-rate garment cost for renting five changes of standard 65/35 Poly Cotton uniform pants and shirts is about $6 per week per employee. This would be $312 per employee per year.
To purchase these same five new pants, five new long-sleeve, and five new short-sleeve shirts would cost about $135. Cost savings would therefore be $177 per employee per year or 57 percent.
One common add-on cost of a rental program is for new employees. There is normally a prep or setup charge to add each new employee hired during the term of the contract. This is an added cost for the laundry to pull garments out of inventory and add a laundry tape to each garment. Five changes of pants and shirts require 11 sets to be used. An average setup charge is $1 per garment. Twenty-two garments at $1 each results in a $22 setup charge per employee. Purchasing uniforms often eliminates this added cost.
There may also be oversize charges, and an agency may be charged as much as 20 to 30 percent for sizes above XL. Many purchasing contracts guarantee a customer will not pay extra for any oversize or non-stock size uniform.
A fee of $1 to $2 per garment may also be charged when an employee requests a change in size during the term of the contract. A rental contract ranges from three to five years, and almost all employees have at least one size change during that time span. Purchasing uniforms means that each employee gets a new uniform each year and can order his or her correct size without penalty.
Another add-on charge may be for wastewater or special energy costs passed on to the agency. Also, most rental contracts state that their own pickup count is the proof of lost or damaged garments. The agency is not made aware of a loss of garment add-on charge until they are invoiced for the replacement garment, which are usually billed at full retail price.
Button replacement and other repairs are also billed at full retail price as an added charge. Depending upon the contract, it may cost as much as $3 to $5 to have a button sewn on.
One of the highest ancillary expense costs when using a rental uniform contract is to pay for something called under-wash. Under-wash refers to an agency being charged fees for weekly rental and cleaning services that are not performed because employees did not turn in their uniforms to be cleaned. Many employees forget to bring their uniforms in or are sick or on vacation on pickup day. Many more employees prefer to wash their own uniforms at home for personal hygiene reasons. It is reported that the average number of employees within rental uniform programs who do not turn in their uniforms for cleaning ranges from 30 to 33 percent. This means that as much as a third of the cost of a uniform rental contract may be billed to agencies with no return for that investment.
If an employee’s job function includes daily exposure to heavy soil, grease and oil, then a rental uniform program may be needed. If not, purchasing uniforms will generate the highest value and use of taxpayer revenues.
About The Author
Jim Burnett is executive vice president and chief development officer of SMS Holdings Corp., parent company of ServiceWear Apparel, which distributes a comprehensive range of high-quality uniforms and work apparel from leading brands and is the exclusive supplier partner of uniforms and work apparel to U.S. Communities.