I currently am a french student studying a purchasing degree and I have a project regarding in-house Vs outsourced cleaning...
From that subject I think I should cover and answer the following questions:
Why outsource cleaning? What are the benefits?
Examples if possible in hotel cleaning where an outsourced solution has been used and why?
What is the ‘world class’ cleaning model for hotel cleaning?
Any other examples where outsourced cleaning has been a success (different industries ie healthcare)?
Any financial models which have been used to prove that outsourced cleaning is a better more cost effective solution?
Anything that proves that a company should outsource- I suppose somewhere we should cover risks?
I think the two main advantages of outsourcing cleaning are cost cutting and increased efficiency.
My parents own a hotel in France and I am aware of how painful and time consuming dealing and managing its own cleaners can be.
Are there any of you that have experienced the process from in house to outsource cleaning?
If yes, I'd really appreciate if you could share your experience and thoughts about it.
Thanks very much.
I have been in healthcare for 35 years and we went to outsourcing for a short time. I will tell you that yes outsourcing can save you money, but as for increase effciency, no way! They will save you money on using cheaper cleaning products, paying cleaning staff cheap wages, no benefits for employees, working more part time vs full time, cleaning larger areas with less staff, etc etc. What you end up with is a dirtier place and constant turn over. You go though in some cases layers of management to get a change or decision made. The turn over I mention will also be in Supervision as the Supervisor are poorly paid and most of the time have little support and they do not stay long. Now they will tell you everything you will want to hear, thats their job, but you will find out just like we have, that there is no better way then, you hiring someone to manage your own staff. You have control over how you want to look. Is it easier for someone else to come in an do your job? YOU BET! But it goes to a saying you may not have heard before, You get what you pay for! If you want cheap, you can find it, but don't think for a minute it lets you off the hook for poor quality. I'm a Manager of Housekeeping an Laundry in a 186 bed hospital. For six years I worked for a well known cleaning company for six year at this hospital and they recently ended the contract and went back to in house. I left that company and now work for this hospital. It starts will the right person, running your cleaning staff. If that individual knows their job, they will save you money. I don't know if this helps, but good luck.
In reply to Donald Redman:
Thanks very much for sharing your experience and thoughts!
I definitely agree with you when you say that you get what you pay for but I think if you negotiate everything in the contract and that you define what performance criteria the supplier will be assessed against it would prevent from the buyer to be disappointed and the supplier would exactly know what he is expecting to do wouldn't it?
I understand outsourcing didn't work for your company but do you think that is a fact that outsourcing cleaning services cannot work or is that something that could be prevented?
In reply to ArthurF:
Your right about negotiating everything in the contract and the expectation of cleanliness you want and the penalty if you don't uphold the contract, BUT someone still has to manage the contract and its contents and so what have you gained? I have never figured out why outsourcing. If its to save money, then cut back your own staff, use cheaper products, shorten the hours and have your staff do more for less. Does it take an outside source to do that? What you get with outsourcing is a bunch of layers of Management, Supervisor, Manager, Regional Director, VP of Operation, President and Owner. Everyone has to have a cut. Yes they will save you money, Cutting hours, cheaper products, water down benefits, etc. The first thing they will do is say for example, you have 20 cleaning employees, we can do it with thirteen. Saving. We can save you for example by using a cheaper cleaning product. We will pay the employees with few benefits or none. Saving. I guess Arthur it boils down to one question. What are you really going to gain by outsourcing that you can't get with in house? I have been on both sides of this, and I believe what it really boils down to is who has or wants to manage their own employees, and who would perfer to have someone else do it and take on the liability. Its the old adage if you don't have the time to do it yourself, hire someone else. Arthur, does it work, YES it does because its a big business, but I have never understood why a company has to do what you should be able to do yourself inhouse. Just one man opinion. Thanks Arthur.
In reply to Linda:
I'm not sure what you mean by competitive advantage to outsourcing. I'm not sure how you outshine your competition because of outsourcing. Can you give me alittle more of what you mean? Thanks.
I agree with Linda,
doredman, I have seen nothing but good things come from outsourcing the cleaning part of a building. IF the right company is taking care of it, BUT that is the responsibility of the owner or the controller of the contract to make sure they are getting what they are paying for.
I just meant that I think outsourcing is advantageous when it allows a business to save time and money.
As a facilities manager in both healthcare and public schools converting and managing outsourced custodial grounds, and general maintenance services, I have seen the advantages and managed around the dis-advantages of outsourcing support services....custodial being the prime source of realized cost savings in the public sector. You need to be clear however on what your cleaning standards need to be to meet your customers/patrons expectations and how to define those standards in requesting vendor pricing and the contract compliance followup on meeting those standards. Although the hotel business is different than public schools, the cleaning methods are similar and integration of contracted services into your overall operational model just as important.
Outsourcing in the public sector can realize 25-40% costs savings over in-house staffing depending on overall salary levels as well as less headaches in managing the staff.
When considering outsourcing, I think you have to be very clear about the expectations. If you are vague, you'll get vague cleaning. Be specific and ask questions about cleaning products used and the paper supplies used. Most cleaning companies use quality products, not cheap ones. We want products that get the job done and keep facilities looking good. If we use cheap ones, the facility looks poor and we lose customers.
I think outsourcing is becoming more common, especially in educational facilities where budgets are being drastically cut. If you do your research, ask the questions and be clear about your expectations, outsourcing can be extremely benefincial for both parties.
I think it's also important to remember that outsourcing doesn't have to be seen as an all-or-nothing option where custodial and/or maintenance services are either performed in-house or
they are contracted out to a cleaning services company.I've seen situations where partial outsourcing works better than complete outsourcing. For example, the general cleaning function may be
retained in-house, while functions such as carpet cleaning, window
cleaning, or floor maintenance may be outsourced. It really comes down to what solution is going to best fit the individual needs of the business.
Historically, contractors have been able to lower labor costs. This is accomplished by increasing productivty and/or paying a lower hourly rate and offering fewer benefits. I favor utilizing technology to improve productivity. However, I worked for two major contractors in healthcare that wrote unrealistic task assignments based on questionable productivity rates. they also assumed that the worker would work at capacity 100% of the time. They typically don't account for much training time.
Unfortunately, the primary attraction for outsourcing in the US has been to decrease wages. Often times, colleges, hospitals and school systems don't want to go through the hassle of slashing wages so they bring in a contractor to do the dirty work.
That being said, there are times when things get so out of control that it may be beneficial to pay for the expertise offered by the contractor. They typically have more managers available. However, they are also notorious for moving managers in/out, particularly when problems arise. You'll often hear that the manager is the problem rather than them admitting that they miscalculated labor costs. Many times, they'll carry accounts that are loosing money with the hopes of negotiating a more favorable contract in the future.
Employees have dual loyalty. If you do outsource at the hotel, I would hope that you'd pay the contracted labor a living wage. this may be the standard. Unfortunately, this is not the case. Contractors here have led a race to the bottom with the front line workers and communities paying the price.
In reply to JKlenovic:
In my local area, I've personally seen success in a hybrid system. An in-house staff is responsible for and accountable to the peripheral services that their (outsourced) contractors provide. While I don't know the ratio or split of the workload, I would assume there is a varying degree of compensation based upon the duties.
Although the most common goal in outsourcing of services is cost savings, getting more value for the dollar is generally the secondary benefit with fewer management hassles closing in as number 3. How outsourcing is approached is decidedly different between the private and public sectors with the private sector making timely board room decisions where public sector decisions are often put off until there is no other decision to be made and deep hole has been dug.
School Districts are a prime example of where private sector expertise has been hired or brought in to make sound business outsourcing decisions, only to have the politics and public emotion of community or institutional cultural change kill or minimize the savings that could be realized. Some Districts made the decision to outsource 10-15 yrs ago when educational funding was last cut and are in a more flexible position today to make the additional budget cuts required while maximize value. Those Districts that have made outsourcing decision timely realized that custodial and many other services are commodities with pricing and wage rates driven by the labor supply market and that support services are not a social program providing jobs at rates above the market at the cost of classroom teachers.
A common factor of failure for outsourcing by School Districts is that they fail to invest the time and staff to follow the steps that facilitate the cultural change and alignment of community/staff expectations. Failure to invest the time follow the steps generally results from a failure to engage the staff and community in establishing performance standards early that a contractors provide pricing from and are evaluated on. Additionally, the overall service delivery model (in-house or contracted) is generally not adjusted to reflect contracted service delivery on the custodial standards. This leaves gaps in the overall service quality, savings not being realized, contract compliance not monitored, and no periodic staff expectation realignment follow-up. The responsibility of the success of outsourced services is shared equally between the District providing the standard and the contractor delivering on those standards.
T. Thetford FMA, email@example.com
I will keep my answer brief, but suffice it to say, this topic could be a multi-day seminar. At the end of the multi-day seminar you really are going to arrive at the same conclusion. There is no 100% fix. There are many factors which will effect the quality of the path taken.
In-house operations do typically run at an increased cost over what a contractor would do the job at. If there is not a clear cut and enforced contract detailing the scope of work and the service to be provided you WILLbe abused by your contractor.
Contractors clean for profit. That is not a bad thing. I have done it for 11 years. But as a result, the unfortunate reality is that unless the client outlines and enforces the expectations many contractors will abuse any latitude given. Not all do, there are many great service providers out there, but there are many pitiful ones as well.
So is it better to outsource? Maybe. But it will require a detailed scope of services, a clear understanding of how the expectations will be met, and some sort of system to manage the contractors performance. Also proper diligence must be done on who will be awarded contracts. Simply going with the lowest bidder will many times yield a story like the negative ones stared above.
In reply to Chris Terrell:
Mr. Terrell is right on the money about there being no 100% fix, outsourcing isn't allways the answer, and it would probably take more like a week to cover the subject in a seminar what many facilities managers like myself have learned over the last 25 yrs. Outsourcing is like solving an equation with 5 variables....they all have to line up to add up.
Clear standards of performance and followup are essential componants for even the most diligent service providers with the pitiful ones ideally weeded out in the bidding/proposal process....another one day seminar in itself. Generally speaking out of any 10 bidders for a service you will have a couple way high, a couple way low, and a cluster of reputable providers clustered pretty close together with very close total hours and staffing. Generally the best "value" will be with a vendor that is in the 25th to 50th percentile of that mid range group......and will likely be able to provide the contracted service.
The historical realities of going with the lowest bidder, unless you are buying a standardized commodity, is that the service provider never intends to give you the full level of service contracted for and will chippy you to make up the difference, hoping you dont figure out what they did with the skipped service by moving it around and not skipping the same thing all of the time....
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