Employment and Jobs

Well-Paid Maids: Startup Advances Social and Business Mission

November 14, 2017  • Amanda Newman & Mark G. Popovich

The home cleaning industry has a reputation for squeezing profits out of low-wage labor. But Aaron Seyedian is turning this model on its head, offering higher employee wages and better benefits. He is gambling that people will pay more for a cleaning service that does good by its workers, and that he will pick up clients new to the home cleaning market along the way.

How Are They Run Chart

Well-Paid Maids is Seyedian’s freshly-minted home cleaning service company based in Washington, DC. One key differentiator for the firm is its guarantee to pay workers $16.00 per hour—well above the national minimum wage of $7.25 per hour and the DC standard of $12.50 per hour.

Offering much higher pay and better benefits does increase business costs, but Seyedian is committed and already seeing results, as noted in an early September article in The Washington Post:

In the business’s first week of operations, Well-Paid Maids scheduled at least two cleanings per day and had more than 30 customers schedule services, with some booking multiple appointments, Seyedian said. It was especially encouraging that so many customers were willing to try out a brand-new cleaning service that at that point had no reviews, recommendations, or references. “For people to kind of make that leap just because they believe in what we’re doing…I think that’s a good sign,” he said.

The Economic Opportunities Program’s Good Companies/Good Jobs initiative is learning about companies that achieve great outcomes financially and for frontline workers. By studying companies like Well-Paid Maids, we hope to document and disseminate case examples to help other companies, investors, and lenders understand what it takes to match these top-level performers that produce outstanding economic outcomes for both their frontline workers and their business’s bottom line. We plan to track Well-Paid Maids’ progress over the course of its first year, following its successes and challenges. Time will tell if Well-Paid Maids has the formula for success in a highly competitive market. To get a baseline view of the startup, we recently sat down with Seyedian for an interview.

What are the origins of your new business, Well-Paid Maids?

I was working in public-sector consulting when I came up with the idea. The premise was that we could offer a living-wage maid service to customers who would feel good about using and supporting our business. I had used a residential cleaning service, and the process was not very transparent—particularly regarding treatment of workers. There seemed to be an opportunity to introduce a more ethical alternative in the domestic cleaning market. I saw an appetite for a service like that in DC. Besides this, labor is an issue that has always been very important to me, having grown up in a steel town. I have been interested in the labor movement for a long time, and I wanted to make a career change to do something closer to that type of work. When I decided to take the leap and start the business, I used my savings for start-up costs including website, licensing, supplies, and marketing.

Can you explain your wage and benefits structure?

I knew that I wanted to offer a living wage and started looking at different guidelines. We use MIT’s Living Wage Calculator because it has a transparent methodology that includes typical expenses such as food, transportation, childcare, and housing. We currently offer an hourly wage of $16.00 per hour based on what it costs for a single person to live in the DC area. I’d like to provide wage increases in the future. In that sense, our company name is still aspirational. After all, a living wage is just the minimum needed to live without public assistance.

Seyedian is turning the home cleaning industry model on its head, offering higher employee wages and better benefits.

Our employee health care benefit is a platinum-level plan off the DC health care exchange. The firm pays 80 percent of the premium for employees and their dependents and 50 percent of the premium for spouses. I chose a plan without a deductible and low co-pays because, in some cases, our workers are comparing our plan to coverage they may already have through Medicaid. We also offer 17 days of leave (two weeks of paid vacation and seven paid holidays) and five paid sick days.

My goal is to have all employees work full-time, but if an employee’s hours dip below 40 per week, they still accrue time off based on the number of hours they work. Finally, since all of our workers are employees, we offer workers’ compensation for on-the-job injuries in line with legal requirements. My goal is to expand disability benefits to offer coverage for off-the-job illnesses or injuries as well since this is something I have benefited from personally.

How will you grow your business while sustaining wages and benefits?

A living wage and benefits are part of our brand. It is the right thing to do and the value we’re delivering for customers. We’re currently working from a fixed price model that is more expensive than our competitors. This model allows us to put about half the cost of a cleaning back into wages and benefits. As a startup, most of our profits go back into the business.  Based on the response so far, I expect we’ll reach a point of sustainability in the next several months. Right now, we have one full-time and another part-time employee. Based on our current growth trajectory, we should be able to have three full-time employees soon.

Marketing that emphasizes our living wage and benefits is key to growing our customer base. We advertised with a local online publication, and our story was also featured by The Washington Post. We’ve also tackled more targeted advertising through different online platforms. This investment continues to pay off in attracting more customers and booking more and repeat cleanings.

What have you seen already as the business benefits of your people practices?

It’s a great way to differentiate in a saturated market. We’ve captured a part of the market that had an appetite for a living-wage cleaning service. People have bought in and feel like they’re not just customers, but supporters of an idea. I’ve heard from folks who hadn’t considered using a house cleaning service in the past because they were uncomfortable with how people were treated. So we’ve found the market is bigger than what other firms are competing for right now. That’s been an immediate financial benefit to us. Additionally, we’ve seen a benefit in our ability to attract quality workers. In our first round of job postings, more than 1,000 people reached out for possible employment with Well-Paid Maids. That’s certainly an advantage. The employees we’ve hired have been dedicated and loyal so far, and I believe this approach will pay off for customers. I expect this model of work will deliver better results. If that proves to be the case, then we’ll be offering a better service that also has a positive community and worker impact.

What other plans are you considering for Well-Paid Maids and beyond?

I would love to take the model to other places that likely also have a market for a living-wage cleaning service. An alternative would be to remain local and expand to an adjacent area such as landscaping or lawn services.

Well-Paid Maids is trying to provide a market-based solution to a social problem, but there are limits to our approach. Obviously, workers who aren’t employed by Well-Paid Maids aren’t benefiting from our wages and benefits. However, if the model is successful, there may be an ability to cause some change in the local cleaning market by fostering competition. Optimistically, if our business becomes big enough, we may be able to affect the wage floor for domestic cleaning workers. Finally, I would like to use profits from the business to advocate for more living wage standards and an accreditation program. I think that, for labor, there’s every reason to think the living wage could become as important a standard as organic is for the food industry.

Related
Employment and Jobs
The Retail Marathon – People, Practices, Power, Performance
September 18, 2017 • Mark G. Popovich & 1 more

Amanda Newman is a research associate with the Good Companies/Good Jobs Initiative. Mark G. Popovich is the director of the Good Companies/Good Jobs Initiative.