If they have not already done so, more and more hotels in North America are considering outsourcing services that once were provided by in-house staff and this includes hotel housekeepers. While we cannot point a finger as to when and where this first started happening, it likely started when hotel properties decided it was to their advantage to have a private vendor handle their laundry needs.
But since then, hotel managers have gained experience – often successfully – with outsourcing services of all types. For instance, at one time years ago it was believed the reservation function in hotels was a key service and marketing opportunity that should be handled by in-house hotel workers specifically. However, some hotels have turned this over to outside services, essentially eliminating their reservation departments by outsourcing, and once again, many properties have found the move very successful.
Some observers say that more hotels are outsourcing services, including housekeeping services, every year in the hospitality industry. Because of this, astute hotel housekeepers should be aware of these trends, why outsourcing services is at least being considered if not adopted in so many properties, and what housekeepers can bring to the table to help protect their positions and their jobs.*
Outsourcing Advantages
As you probably already know, the top reason hotel properties consider outsourcing services is to save money. According to Thomas Morone with Warnick + Company, a Los Angeles-based advisory group for the hotel industry, “Payroll is the largest cost center for almost all functions within the hospitality industry…any opportunity to outsource functions that can be performed off-property [or at] a lower salary….is attractive.” He adds that anything that saves labor is also viewed highly in the hotel business.
We should note that even if the outsourced vendor pays their staff the same hourly wage that the displaced hotel housekeepers were being paid, it is still a savings to hotel owners. This is because along with the hourly wage, the hotel must pay payroll taxes and benefits for the hotel housekeeper. In some cities, such as New York, as much as 40 percent of a housekeeper’s paycheck goes to pay these costs.
But there can be other cost savings and benefits as well, for instance:
- In most cases, the vendor handling the housekeeping duties will bring their own cleaning equipment and products. While these are not necessarily a large expenditure, by outsourcing services the hotel avoids these costs.
- At some properties, the highest staff turnover is in the housekeeping department. Every time a new hotel housekeeper is hired, the new staffer must be trained on how the guest rooms and other areas of the hotel are to be cleaned and familiarized with the cleaning equipment to be used. This takes time, and in any business, time is money.
- There are vendors that specialize in providing services for hotels, including housekeeping. Often these are referred to as “plug-and-play” vendors because they can start on any given day and begin work without any special training.
- Should the hotel decide to terminate a hotel housekeeper for any reason, there often is some type of severance pay agreement established by the hotel. This would not be a charge if an outsourced vendor is handling the housekeeping.
Related to this last item, if hotel management is not satisfied with the cleaning, finds another vendor who can do the same work at a lower price, or decides to change vendors for any reason, in most cases all they have to do is notify the vendor. Outsourcing services helps eliminate the difficult task of letting people go and, as we just mentioned, any related costs associated with terminations. **
Drawbacks
Not all programs for outsourcing services work out well or they may work out well for a while only for their benefits to deteriorate over time. A perfect example is how many manufacturers outsourced their manufacturing production to overseas companies. The cost savings were often immediate and very welcome, but over time quality control issues surfaced; language and even the ability to explain problems became an issue; cultural differences impacted production; but the big “killer” was the fact that the cost benefits initially realized began to erode.
Similarly, in the hotel industry a number of properties that outsourced housekeeping and reservations, as we mentioned earlier, brought them back in-house. Usually this happens due to declining service levels.
But if costs are the big plus for outsourcing services, control or lack thereof is the big drawback. The hotel housekeepers in an outsourced situation are employees of the outsourced vendor, not the hotel. It is the vendor that has control and supervision over their work. Hotel administrators are also hesitant about attempting to control, or should we say instruct, these outsourced vendors because there can be tax implications. If the hotel is instructing the worker, then the IRS could interpret this to mean the housekeeper is actually a hotel employee.
An issue that also can surface is security. A hotel property, for instance, many employ far more stringent background checks on anyone hired, more thorough than that performed by the outsourced vendor.
The Housekeepers’ Ace
So now that you have an idea of the pros and cons of outsourcing services and why your employers may and do consider this practice, it’s time we discussed the “ace” hotel housekeepers have and that is ownership. As employees, hotel housekeepers have a sense of loyalty ownership which is expressed in how well the property is operated, how clean it is of course, and most important, ensuring that guests are comfortable and enjoy their stay at the hotel. While an outsourced vendor’s staff may provide satisfactory service, ultimately it is just a job for them. There is no sense of loyalty or ownership to the hotel.
To ensure that administrators are aware of this, I suggest that hotel housekeepers start getting the word out about their interest in the hotel. The following are some of the suggestions that have worked in facilities and properties in which I have consulted:
Start communicating. Initiate some type of newsletter or communications program to share housekeeping information with other hotel staff and especially with hotel managers and owners.
Say it but don’t shout it. Let others know about your special services in the hotel but in a very tactful way. For instance, make sure everyone is aware that all common area hard surface floors have been stripped and refinished, a major time- and labor-consuming job, and that steps have been incorporated to reduce refinishing cycles. This helps reduce costs for the property and protect the indoor environment.
Be your own “Yelp.” If guests have noted or commented on how happy they are with the appearance of the hotel, guest rooms, or the work of a specific hotel housekeeper, add this to the newsletter. What’s interesting, I have discovered, this feedback builds on itself and encourages other hotel housekeepers to take the necessary steps to earn similar recognition.
Get to know the boss. Few hotel housekeepers have actually met top executives and managers of the hotels they work in. It’s very important for top executives to get to know who you are and understand how crucial your role is
Become a suggestion box. If you see ways the hotel can save money, be more energy and water efficient, reduce waste, etc., don’t keep these things to yourself; add them to the newsletter and discuss them with the key executives and managers of your property.
Ron Segura is president of Segura Associates. His company works with all types of buildings and organizations to streamline their cleaning and building operations so that they function more effectively and efficiently and realize a cost savings. He can be reached through his company website at https://www.seguraassociates.com.
*The greatest amount of outsourcing occurs in non-union areas of North America and where workers are not part of a union.
**In most cases, outside services will have a contract that may run on an annual basis or longer with their hotel client. However, invariably there are clauses that can end this arrangement, especially if the termination is due to dissatisfaction with the work performed.
