How PEAK Helped a Healthcare Laundry Company Save 10% Annually on Contingent Labor

Healthcare laundry service providers, which handle medical linens, demand stricter hygiene standards and specialized training and safety protocols than the average cleaner. As such, these companies often struggle with high labor costs and elevated turnover rates. However, standard cost mitigation options—especially automation and outsourcing to commercial laundries—come with their own challenges.

PEAK recently partnered with a national healthcare laundry client to initiate a Managed Staffing Program (MSP) solution to reduce labor costs without sacrificing quality of work or safety and hygiene standards.

The Challenge: High Labor Costs

Healthcare laundry is a particularly labor-intensive line of work. Beyond the standard laundry tasks, niche requirements like infection control protocols and specialized handling require additional training and can lead to burnout—both training and retention are costly.

Many healthcare laundry providers turn to automation and outsource their workloads to commercial laundries. However, these options are not without their own risks. Implementing systems like RFID tracking, AI sorting, or automated folding requires significant upfront investment that may not create a return for many years. Outsourcing to commercial laundries also has risks: quality control, vendor reliability, and hidden costs that may negate any potential savings.

Faced with these challenges across multiple locations and child companies, our client needed to cut costs—and fast. Rather than overspend or choose a subpar cost mitigation option, the healthcare laundry company partnered with PEAK to look for a more strategic solution.

PEAK’s Strategic Solution: A Comprehensive Contingent Labor MSP Solution

After engaging with PEAK, our client realized that the comprehensive MSP solution offered an ideal solution to their staffing and cost challenges. PEAK’s end-to-end program extends far beyond individual placements to include talent fulfillment, account management, maintaining a staffing supplier network, ongoing analysis and consultation, optimized pricing, and compliance and risk management.

Shifting to a contingent workforce is not without its challenges: Compliance gaps, potential disruptions to the operation, and additional onboarding to ensure adherence to safety and compliance standards can create a difficult transition. Zero-tolerance for hygiene lapses—not to mention regulatory scrutiny—also deter healthcare laundries from leveraging contingent labor.

But PEAK’s strategic solution is built to mitigate that risk and give clients complete confidence in the results. Key elements of PEAK’s MSP solution, which were tailored to the healthcare laundry company’s needs, include:

• End-to-end management of contingent labor—a single point of contact for both the customer and suppliers
• A systematic approach to addressing hiring needs—bringing structure to the hiring process while eliminating unnecessary effort and cost
• Complete visibility and transparency throughout the process
• Emphasis on increasing recruiting effort and candidate quality at the same time
• Enforced compliance with industry standards (especially critical in the healthcare linen space)
• Reduced fill time

Our client was so confident in this solution that they authorized PEAK to onboard all their locations and incumbent suppliers into the program. Additionally, PEAK sourced 22 additional suppliers to help the client meet their cost savings goals faster.

Impact and Outcomes: $600K+ in Annual Savings

PEAK fulfilled its promise to achieve significant savings through the Managed Staffing Program. Not only was PEAK able to exceed the client’s staffing goals—increasing headcount by 71% since inception—but PEAK instituted a mandatory cost reduction after an employee has worked 560 hours, garnering cost savings between 10-26%.

The cost savings program saves approximately $12,000 per week. Given that the client is on pace to spend $6M on contingent labor this year, that amounts to approximately 10% in annual savings.

Conclusion: PEAK’s Contingent Labor Solutions

PEAK’s MSP solutions focus on rapid fulfillment of high-quality contingent labor talent under a predictable cost model. Because PEAK manages the end-to-end process, we are able to identify and pursue opportunities for continuous improvement in quality, efficiency, cost, and risk.

All our clients receive supervisory, operational, administrative, and systems support to streamline their entire requisition and placement process.

Are you dealing with a similarly complex staffing challenge and need a strategic, comprehensive solution? Contact PEAK today to see how we can help.