Figures published by the Association of Directors of Environment, Planning and Transport (ADEPT) for the week commencing 22 June showed only 65% of local authority commercial collections services were operating as normal (see letsrecycle.com story). In the private sector, while there was something of a mini-boom for parts of the skip sector during April/May from householders having clearouts, skip orders are said to have fallen back and commercial waste volumes for larger businesses are still reduced.
Data today (14 July) from the Office for National Statistics shows the economy has shrunk by 24.5% since February – and grown by just 1.8% in May – which is seen as highlighting that some further difficult decisions may have to be made in terms of company structures and workforce levels.
Challenges
Jacob Hayler, executive director of the Environmental Services Association (ESA), told letsrecycle.com: “The coronavirus crisis has undoubtedly caused commercial challenges for the resources and waste sector, as it has for other sectors across the country.
“Although our sector provides an essential service to society, operators are not immune to the financial shock waves caused by the closure of large sections of the economy and the services provided to commercial and industrial customers have been hardest hit.”
Employment-oriented social network LinkedIn has seen a huge number of former waste sector employees reporting their jobs have been lost and that they are looking for work. This includes people at some of the larger waste management businesses.
The redundancies are reported to have occurred as a result of the pandemic and business restructuring.
Furlough
Though a feature of the pandemic has been the recognition of the work of refuse crews as essential, several companies have had to use the government furlough scheme.
Mr Hayler said: “The furlough scheme has been very useful in protecting employees and companies through this period of difficulty and the flexibility it provides means that operators can begin to bring staff back gradually as more and more businesses re-open with the easing of restrictions.”
But, he would not be drawn on when he thought the sector might recover. “The long-term financial health of commercial and industrial waste operations will largely be determined by the success of the wider economic bounce-back and corresponding waste volumes. It is too early to tell yet whether overall private-sector waste volumes will return to pre-Covid levels in the long term, but we can expect volumes in the very near term to continue to be down on previous years due to the overall lower level of economic activity at present.”
Recruitment
Bobby Benson, director of Robert Adams Search & Selection, a recruitment consultancy specialising in the waste sector, told letsrecycle.com that his company had seen an increase in approaches from candidates looking for work.
“The heads of those on high salaries might have to roll”
Mr Benson told letsrecycle.com he thought most employees in the waste sector had not been furloughed as they were needed to deliver frontline services. Local authorities had been particularly busy, he said. “The local authority waste market is robust. I think local authorities are more stretched than they have ever been.”
Those that had been furloughed, Mr Benson said, include salespeople, some people in operations and account managers. He commented: “Some more senior people have been furloughed by those companies that have financial problems. While there aren’t a lot of senior people who have been let go, the heads of those on high salaries might have to roll.”
Mr Benson said he believed the waste sector would recover and that the reopening of shops and the hospitality sector would help contribute towards the recovery of the economy as a whole.
‘Pleasantly surprised’
Others within the industry appear more upbeat. Jacqueline O’Donovan, managing director of London-based family-run O’Donovan Waste Disposal, told letsrecycle.com she was heartened by the sector’s resilience. She said: “I’m pleasantly surprised our industry is not the first to be impacted and last to recover, as we often are.”
Dealing predominantly with construction waste and operating around 5,000 skips, O’Donovan was less likely to feel the impact of the reduction in commercial waste, she explained.
Ms O’Donovan told letsrecycle.com there were no plans for redundancies at the company, and that she saw no reason for that position to change in future. “Some larger companies may realise they could be more productive with less staff,” she said. “They might find three people could do a job previously worked on by five.”
Demand
O’Donovan has actually experienced an increase in business, Ms O’Donovan said, and ran out of skips last week, something which had never happened before.
The furlough scheme had been invaluable for O’Donovan, she said. Two-thirds of those who had been placed on the scheme at the firm had gone back to work, while another third is still to return. She said: “The scheme has been a life-saver. I take my hat off to Rishi and Boris.”
Ms O’Donovan believes it could be October before some sort of normality returns. And, she was pragmatic in her assessment of those companies who may fail as a result of the pandemic, saying: “The weak will fall by the wayside and the strong will get stronger.” This may lead to a streamlining of the waste management industry, she added.
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