Denmark’s ISS cleans up China

The Danish company, ISS A/S, is not very well known around the world, but the facility services provider has two very impressive qualities. The first is that the company is the world’s fourth-largest employer.

The second is that it has an employee turnover rate of only 42%, lower than the average 65% seen in the facility services sector, according to the Chinese-language Global Entrepreneur magazine.cleener

Facility services, in which cleaning services comprise a large part, have a unique characteristic: the average age of employees stands at nearly 50.

“Many workers in the industry would leave their job at a moment’s notice for a job in another company with a wage of only 100 yuan (US$16)” because they need to feed their family, ISS China vice chairperson Wu Yanhong told the Global Entrepreneur.

However, the company needs experienced workers because experience breeds efficiency; in other words, they can finish their work within a shorter period of time compared with inexperienced workers, Wu noted.

Therefore, ISS devotes itself to maintaining a low employee turnover rate, which is now at 42%, more than 20 percentage points lower than its competitors in the market, she said.

The ISS, founded in Copenhagen, Denmark, in 1901, is one of the world’s leading facility services companies. Its operations include cleaning, support, property management, catering, security, and facility management.

Cleaning may not be an ideal job for most people, but the business has in recent years been regarded as a gold mine for global venture funds.

Due to investors’ high interest in purchasing ISS shares, the company’s value surged from US$3.9 billion to US$8.5 billion in seven years, making it the world’s largest facility services provider. Before that, ISS recorded an average 35% growth in its annual revenue from 1998-2000, the journal reported.

In 2009, ISS merged with the Shanghai-based Hongren cleaning services company to set up ISS China.

Facility services can’t generate fast money, but it is a business with a stable improvement in revenues and profits and with abundant cash flow, Global Entrepreneur said, noting that ISS’s operational cash flow has been maintained at more than 3.6 billion krone (US$657 million).

“What makes the business unique is its stability, despite a relatively low profit margin. It is rarely affected by periodical financial crises,” ISS China country manager Jack Zhou stated.

Source: Want China Times

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