"We use social action as leverage for successful business"

The cleaning company ProfilService is an essential supplier of quality cleaning and window polishing on Sjælland. The company has always had long-term customer relations with both businesses and the public sector, and the built-in growth engine in the stomach of the two directors has always been reflected in great numbers on the bottom line.

ProfilService also has a tradition of a high proportion of people from other ethnic backgrounds among employees who, due to language difficulties, have had difficulty entering the labour market.

There is nothing special about that. The same applies to many other cleaning companies. But if you take a closer look at ProfilService, you will soon find out that this is a company that stands out.

"Social responsibility is part of our values and culture. It's a powerful motivator for our identity and a growing competitive parameter."

This is what ProfilService's Social Development Plan anno 2021 says.

 

We have an ambition for growth and to further increase our social responsibility, including through a more efficient organization of efforts with a goal of becoming a leading role model for socially responsible companies in our market segment," says Steen Meedom, CEO of the company.

Chairman of the Board and now former principal owner Per Jens Nielsen elaborates that social responsibility is demonstrated by the efforts the company makes to integrate and retain its employees:

"With us, you don't just get good at cleaning. It is actually the smallest part. We spend a lot of resources on our middle managers having close contact with the employees and helping and guiding them with everything you need to be able to do to be part of danish society. It can be to get a Nem-ID, to register the child in kindergarten, to read his or her tax return or to contact the municipality."

Training to be part of society

In order for the middle managers to carry out this task, ProfilService has set up a "Profile Academy", where you get the skills necessary to guide employees on general societal issues.

”Our middle managers have to be able to help employees with everything. Therefore, we have created the "Profile Academy" where they learn about the danish society and building relationships. It has nothing to do with cleaning, but when you have a staff where 90 percent are of different ethnic backgrounds, then relationships and being able to commit oneself in a society are the most crucial things," says Steen Meedom.

For that reason, ProfilService has more middle managers than other cleaning companies. 

”In other cleaning companies, a middle manager typically is responsible for 50 employees. Our middle managers have maximum 30 jobs and thus also fewer employees. It pays off in the end that they have more time for every employee. You cannot integrate, if you do not have the time,” says Per Jens Nielsen.

Retention brings gains on multiple bottom lines

The remuneration of the higher number of middle managers should mean lower earnings. But that's not the way it works:

"In the industry in general, there is a 50 percent annual change among cleaners. With us, it is less than half that. A big part of the explanation is that the employees are happy with the close contact with their manager. And that is where the equation is solved. Because while it is more expensive to pay more middle managers, we save money by having fewer replacements, as it costs 6-7000 kroner every time you have to hire a new employee. When we did that math, we thought there must have been a mistake. But there is not. It is clearly worthwhile to have increased management. This gives benefits on both the financial and social bottom lines", says Per Jens Nielsen.

Investor with same mindset

However, over the years, ProfilService’s social efforts have been more culturally-borne than formalized. Therefore, Den Sociale Kapitalfond Invest was just the right match when the company was recently looking for an investor.

"Den Sociale Kapitalfond Invest has the same mindset as us in creating attractive financial returns with positive social impact. Therefore, we had no doubts at all when we met Mads and Lars from Den Sociale Kapitalfond, and now we have high expectations for the cooperation to develop, among other things, social agreements, engagement and clauses. In other words; to have our social focus further developed and put on formula so that we can also measure it, tell the outside world about it and attract both new customers and new workers," says Steen Meedom.

Den Sociale Kapitalfond Invest bought 57.5 percent of the shares in December 2020. The fund is built on a philosophy that social responsibility and impact are good business in more than one sense – and that the successful companies of the future are measured not only by profit or economic growth, but also by the ability to contribute to solving societal challenges.

"From our perspective, social contributions and social responsibility are increasingly a key to attractive workplaces, good reputations and strong customer relations. It is not just common sense, it is good business. Therefore, ProfilService is an exciting company to become a part of," says managing partner, Lars Jannick Johansen.

Strengthening competitiveness

He adds that the starting point for the fund is always to look at where the company is going commercially together with growth and market potential.

"So, when you have a company such as ProfilService, that has a great potential in regards to social responsibility, we believe that we can strengthen the competitiveness by developing and making the social responsibility visible for the costumers of the company,” he says.

And that's exactly the next step for ProfileService. Backed by Den Sociale Kapitalfond Invest, ProfilService will develop and win new customer tasks based on competence, price and social engagement, as well as developing social partnership agreements with existing customers, half of whom are private companies and the other half are public workplaces, schools and universities.

"We have already announced to our customers that we will be working even more with the social profile, and we have only met positive attitudes about this. Now the next step is for our customers to become active participants in the collaboration on social responsibility and thus contribute to the spread of more people doing more together. And that even more workplaces can and should see potentials in hiring marginalized people,” Steen Meedom explains.

Many interested investors

The interest in ProfileService among investors was clear when the company announced that it was looking for an investor at the end of 2020.

"There were a lot of investors who wanted to get on board. And it would probably have been easiest just to pick an industrial investor. Then we would have just fit into their portfolio and we could have taken the money and run," Per laughs.

"With Den Sociale Kapitalfond Invest, we have entered into a binding cooperation, where much is required of both us and them. We are being held up to the fact that, as we develop financially, we are also creating social results. So we are really happy that we did," he says.

Neither Per nor Steen knew much about Den Sociale Kapitalfond Invest when they contacted ProfilService.

"When Den Sociale Kapitalfond Invest came up we looked at each other and thought, what is this? But we took a meeting with them, and not many half-hours went before we realized that these gentlemen had gotten really familiar with our business and our industry. It gave a lot of respect," Steen Meedom says.

SDGs create a stronger focus

For ProfilService, hiring marginalized people has been a natural thing from the very beginning of their collaboration in 2014, when Steen bought into the company. But in the time since the creation of the UN Sustainable Development Goals in 2015, it has become clear to the two directors that society is calling for just the innovation they stand for.

"The adoption of the SDGs has given companies a common language and a platform for action that has created a new way of doing and talking about business."

However, even though the premises of good business practice have changed, we can only achieve the SDGs if we also translate them into good business. If we create a positive effect for society, which we use as leverage for a successful business. And again, this is something we can see that Den Sociale Kapitalfond has a long experience in contributing to," says Steen Meedom.

The important relations

Steen Meedom and Per Nielsen have long experience in creating long-term relationships with customers by delivering a good job and having an ongoing, honest dialogue about the company's service solutions and its possible development opportunities.

"When Steen joined the company in 2014, economies of scale were leading the way in our industry. But we went the other way. We would rather have fewer customers, and then time to look after them and visit them. Follow up on appointments. Be in dialogue. And we wanted to be good at dealing with our employees so we could keep them. The better the retention and stability, the higher the service our customers get. These were the main headings of our concept.

Good relationships and a large and well-developed network mean that ProfilService does not use canvas sales.

"It is a great advantage that we have such a developed network that people talk about our company. Both when we offer tasks and when we have to look around for new employees," says Per Jens Nielsen.

A strong pioneering spirit

Although retention is an important theme in ProfileService, where there is a particular focus on developing skilled and ambitious cleaners and possibly train them to be middle managers, it is also important for the two directors that employees who have the ambitions and qualifications for it move forward in the labour market.

the potentials you have. So being in ProfilService can be a good starting point where you can learn the language and commit yourself it in society. But we are pushing for those who have ambitions to do so to come out and train or take other jobs," says Steen Meedom.

For Steen and Per, the mission of retaining, training and later helping those, who are ready to do so, into the labour market is one of the most important parameters in good corporate governance.

"A strong pioneering spirit and the strong commitment and unity of the entire employee group are crucial to ensure our continued development and good results," says Per Jens Nielsen.

In order to also strengthen the commitment of managers, middle managers and other key employees, ProfilService has just introduced a model where you are offered co-ownership by the company.

"At ProfilService, we take ownership seriously. We see it as another important tool to attract and retain skilled profiles that can help develop ProfileService in the years to come," says Steen Meedom.

It is precisely the corporate culture, such as that in ProfilService, that determines whether Den Sociale Kapitalfond Invest sees a good investment.

"If there is anything we have respect for, it is precisely culture and organization in small and medium-sized enterprises. And we believe that there is an often overlooked factor in what potentials a company has to grow," says Lars Jannick Johansen.

ProfilService

• ProfilService was established in 1992.
• Per Jens Nielsen bought 20 procent of the shares i 2008 and the remaining in 2014.
• Per Jens Nielsen knows Steen Meedom from earlier emplyment in the cleaning industry and contacts him for a potential partnership. 
• Steen Meedom joins the company in 2014.
• Den Sociale Kapitalfond Invest buys 57,5 procent of the company shares in January 2021.
• Den Sociale Kapitalfond Invests' investment in ProfilService takes place as part of a generational change, where Per Jens Nielsen thrushes down. Per Jens Nielsen will continue to own part of the company and become chairman of the Board of Directors. Steen Meedom will continue as CEO.