The top ten ways pests can affect your bottom line

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    14-Jul-2015

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The Top 10 ways pests can affect your Companys bottom line.

1. Illness:According to Gallup polls, 131 million days were lost due to sickness absences in the UK in 2013.So what? What does this have to do with pests in the building?

The public health industry often go on about all the terrible diseases that you could catch from pests but more often than not, you dont get these. Thats not to say it doesnt happen but the illnesses that are more commonly spread are non-lethal flu-like illnesses where your staff have to have a few days off or stay at work feeling awful. Rodents are particularly good at spreading these illnesses. Basically, if you think you might have mice and your team are starting to become unwell and it becomes clear that something is going round, youll be losing money through all the hidden costs of lost capacity, hidden HR costs including return to work interviews, cleaning costs and missed opportunities.

2. Damage to property:

This is a biggy according to a Guardian article, if youre trying to sell your house and the prospective buyers notice evidence of a rodent infestation, if they want to buy, they will negotiate an average, a 9% reduction in asking price equivalent to almost 22,000 off the average asking price for a UK property! We worked with a Nursing Home many years ago in Northampton that had squirrels in the loft. Basically it was a case of too little too late. The cost of damage to plumbing, electrics, roof timbers ran into tens of thousands of pounds. In the end, roof had to be replaced and because their insurance didnt cover pest activity, they had to call in administrators and declare bankruptcy. A company turning over a 7 seven figure sum went to the wall because they hadnt installed measures costing a few hundred pounds when they first saw the problem. Oh, and I havent even mentioned the amount of fires rodents start every year on farms: 20%. 20% of what I hear you askingwell 20% of the 1700farmbuildings and 66000 areas of grassland that are destroyed byfire every year. That is 340 buildings per year. Average cost of a barn? Anyone? I guess its more than a tenner? Anything for 5000 for a tiny kit barn up towell, way past 100,000 + insurance costs, legal costs, productivity costs, stock costs and on and on.

3. Damage to stock:

200 rats are able to consume nearly 1,100kg of feed in a year. Ok, so I can hear you saying that the price of wheat is only (at the time of typing) 120/ton. Thats not so bad is it, Dan? Well, today wheat is grown on about 2,000,000 hectares with a value of about 1.2 billion. There is a lot of real estate for then to go at. Alongside the threat they pose to feed stocks, they also carry infectious diseases such as Leptospirosis (Weils disease) which is spread through infected rat urine, and is a very serious health risk to those who work on the farm. They can also carry disease from unit to unit, when searching for nesting sites and food sources. The estimated cost to UK farmers from rodent damage is up to 25 million every year. Margins can be extremely tight for farmers and a serious rodent infestation can be the difference between break even or not. A Grain shipment only has to have the slightest sign of rodent damage for it to be busted down from for human consumption to animal feed or simply rejected completely.Haulage costs, lost opportunity costs, time costs, labour costs, wear and tear of machinery, seed costs, cost of buying harvesters, tractors etc. A serious amount of filthy lucre.

4. Damage to Reputation:

The UK is quite straight-laced when it comes to pests being seen in business premises. In Australia and the US, things can be a little more relaxed due to the climate but, in a nutshell, a client seeing a pest in your UK premises can ruin your business overnightor at least as fast as it takes to get round social media these days. Occasionally the local media will report on food business that have, shall we say, not exactly made pest control a priority. So, thousands of paper reports go into circulation as well as an electronic presence appearing about your business that can NEVER be erased. The fallout of loss of business can be catastrophic. Most regional restaurants, hotels and other food businesses rely on the new word of mouth that the internet provides and Trip Advisor and similar testimonial sites will instantly pass the bad news around. How much business do you think you would lose if one of your prospects or clients saw a rat in your premises? What if it was just one client that you lost? How much do they spend every year? Take that number and multiply it by 25 (average client lifetime) and then multiply that by 100 (average number of people they know).

Im guessing thats a large number? So is it worth risking a cockroach infestation? Or fleas?

5. Your top talent leaving.

Ive seen companies who say they pride themselves on looking after our staff lose their apparently beloved employees because they just couldnt bear being in the building any longer. It mainly happens when there are fleas in a building but we did once see it in offices on a farm. Bluntly, your top employees are your money earners and they know it. They also know that their skills are equally useful to the competition and if you cant be bothered to keep pests out of the building, theyll go somewhere else. A friend of mine who works as a sales trainer says that the cost of hiring the wrong person can make or break an organisation if they turn out to be a wrong hire.A report carried out by Oxford Economics reveals that replacing members of staff incurs significant costs for employers: 30,614 per employee on average. This includes opportunity costs, training costs, time costs etc., etc. Also, you sales staff are those who bring the money in. If your top performer left tomorrow, what potential deals has he/she just taken to your competitionbecause they got bitten by a flea? 1000? 10,000? 100,000? 1 million?

6. Losing Industry AccreditationsYou may or may not know that BRC Accreditation is all but mandatory if you want to be considered a serious player in the food industry or its related supply chain. I once had a facilities manager say they needed to put some insect monitors put in. Nothing so very strange about that. In fact, that is fairly common. Theyre relatively cheap for this 1.3 billion company. I started to ask what would happen if we didnt put in the 80p monitors.Client: Well, we could lose our accreditation with BRC!Me: Meaning?Client: Meaning, Dan, that wed lose our contracts with (insert 3 very famous food brands)!Me: Which would cost?Client: About 5 million a year in addition to redundancy packages to half our staff at this plant. Oh, and the dormant multi-million machinery of course and etc., etc.Accreditations can make or break a business and if auditors see pests in your company, they can and will remove your accreditation to protect the end users in the supply chain.

7. Trying to solve it yourself.

The average spend is 500 with wasted time, financial outlay and further pest damage incurred during the time that youre trying to fix the problem yourself. You are also, Im guessing, not a pest control expert. You may run a successful IT company, manufacturing business or nursery, but Im willing to guess you dont have your RSPH Level 2 in Pest Control? The time youve spent (note that word) trying to fix your problem would surely have been better spent focusing on your own business. You may have missed a crucial deal or opportunity while you were trying to kill bedbugs, booklice or squirrels. Its also rare for over-the-counter treatments to completely cure your problem. And there you were thinking that you were saving money.

8. Potential legal action against your business.

How much would it cost you to close your food business or food supply chain business for one day? I dont mean for a weekend. I mean in the middle of the week because a Chartered Institute of Environmental Health Officer (EHO) has served a closure notice on your business. Im guessing that figure is high or at least higher that youd be happy to accept.What would happen if it escalates and your company either gets sued or taken to court for infraction of relevant hygiene legislation? The fines may be relatively small for a first offence but the fallout will be huge. There is compensation to be paid to anyone becoming ill. There are legal costs in addition to the fine. Even if you settle out of court, youre still going to have to pay some money to settle. Then there are the ramifications set out in point 4 above. However, were getting ahead of ourselves; it rarely gets to that level and the EHO will normally just serve a 24 or 48 hour closure notice in order for you to get the problem sorted out. So, how much would it cost you in lost business and those counter measures that you still havent implemented?

9. Low morale and worry I liked working here until the rat came in. Now I just panic all the time I sometimes hear this sort of comment. If you worked somewhere where pests were in the building, how would you feel? Its a fact that were less productive when were stressed out or our morale is low. We cant focus, we hate our jobs at that moment and we turn out substandard work. Its estimated that the UK economy loses 29 billion per year due to low morale and dissatisfied employees. If your team is working below par due to the presence of pest species, how much more effective do you think theyd be if they had a clean, safe working environment? How much more would they add to your bottom line? How much are you losing because theyre unmotivated and skiving off? How much of that 29 billion are you missing out on.

10. Other contractors refusing to work with youWe get this a lot! Plumbers, electricians, builders, roofers, air conditioning engineers, telecoms engineers, decoratorsIve had then all be the reason why a prospect has called us to have something removed. A person turns up on site and will refuse to carry out their work as the site is either unclean (vermin) or unsafe (wasps, bees, hornets). To be honest, its hard to blame them. Would you go into a space with an active wasp nest or a small areas that reeks of rodent urine? No, and neither should they. The problem is though is that, if theyre a company with self-respect, theyll have charged you a callout. And still not done anything. Theyll then have to charge you again if they come out. It can all start to add up if your property has pest problems.

If anything in this blog strikes a chord or if youre worrying or unsure about what to do, why not call us to discuss whether it makes sense to look at your problems. Call us on 0800 092 5259 or 07989 422469 or why not visit us at www.acclaimpest.co.uk. You can also email me at dan@acclaimpest.co.ukAn original blog by Dan Gaskin, Acclaim Environmental 07989 422469.