Outsourcing the House Keeping for the Hotel – “What a Stupid Idea!!”
The conversation went a little like this:
“Who’s idea was that, no one does that!”, “what am I gonna all day?” and “how we gonna know what goes where, like we do now!” “We gonna have to have double of everything”.
I think this person was having a bad anyway and I just added a little fuel to fire, but the point was simple, “outsourcing is not a compromise on quality, it should be an improvement in the three major business concerns, the cost, the quality, and the delivery (time).
Why outsource? And how does it work?
The reason to outsource is about performance which encompasses cost, quality and time. Can you outsource a task and improve one or all three of these concerns. If the answer is yes, what’s holding you back?
Competition for your Business
Outsourcing works because companies want your business, and they want your repeat business. Companies’ which can do the work for you have competitors which are innovative, and aggressive; here is your opportunity to make good use of their expertise, and their “hunger” for growth to improve your Hotel’s performance.
What is holding you back?
Trust, completely agree. Trust a huge component of this strategy, and trust is earnt not bought. Trusting a supplier will take time, supervision, and monitoring. You response might be “we might as well do it ourselves”, well no, because the supplier you choose will either pass or fail, with the pass then the strategy begins to improve your Hotel’s performance, with the fail, you terminate the supplier and start again.
Qualify the Supplier
Tell the supplier they are being tested, make sure you have an escape clause, put performance measurements, KPIs, milestones and anything you think is relevant to ensure a performance guarantee and/or an easy termination in any agreement. If the supplier is not keen, you have just qualified that supplier is not useful for your needs.
What should we outsource?
To begin, keep it simple, keep it slow; Start with a task that is easy to find suppliers for, so you can ascertain a market value for the work. Ask for a proposal/quote from the supplier, ask quotes from at least three supplier. Is this price at a lower cost than you or your staff doing the work, keeping in mind indirect costs such as admin and HR. Can you reassign your staff other work and make better use of their time while you road test the supplier. Measure, measure measure, you need to be sure, on all fronts your supplier is working for you and improving performance for cost, quality and delivery. Make sure all the legals, insurances and legislative compliances are in place.
This is what we are really talking about, “slowing down to go faster”, (I don’t know who said that but it make’s sense).
What we are saying is to take a little time out to invest in a few new or additional systems or process which will save you time; integrating an outsourcing strategy into your systems can ensure the benefit of performance improvement, but you have to measure it.
Here comes the sell from the guy writing the article, well, yes and no.
You have no doubt heard of this thing called the Internet, and no doubt you have had telephone conversations with various people whom work for large multi-national companies whom have thick accents and live in different time zones. So here’s the sell, well it’s not a sell, its’ fast becoming a fact of life. If you don’t get involved and your competitors do, you will be paying more when you don’t need to.
I’m suggesting, you need to grasp this with both hands, for example:
The day’s work load of the House Keeping department can be improved via using these same services the big multinational companies do, and there are local services as well. For example, you can organize a virtual “Personal Assistant” for as little as $5 per hour overseas, or $35 an hour locally. The benefit is you don’t have to find them 38 hours’ worth of work and they are easily terminated. The down side is you do have to train them to what you want them to do and how (don’t dismiss this and put it into the too hard basket!). These people overseas are not unlike our own colleagues, many are educated, and many have degrees and considerable experience in disciplines such as accounting, computer science and more.
Any task that requires a paper shuffling/data base type arrangement can be out sourced, for example, some financials and spread sheet work. Even document handling and typing. Record your document to your phone, send it to your virtual assistant to sort and type up a draft for you to edit. You just saved two hours of your time, the cost $10. (Check with your accountant but I think you’ll find there is no GST either)
Short Jobs Tasks – Outsource it
Those Jobs you away mean to get to but are always a low priority such as setting up a KPI list and monitoring with spread sheet, or developing templates and forms for staff to use, and so on. There are several web sites that can help for minim cost, you post your work to the web site, set a budget, and professional will bid on the work.
You can vet the people bidding, have a conversation and then choose. We were quoted work locally, went to one of these sites, and reduced the cost by over 70% and increased our input and control (the lady we used was in Texas). It takes a little getting used to, isolating and selecting a task that you can think you can outsource, but it is well worth it in both quality and cost.
Do the Math yourself
If you do the math over a 12 month period there is considerable time savings and less indirect time losses. There is a cost in setting this up, and the first virtual assistant may not work out, but you will get better at it and you will save money and time.
If you haven’t heard of this term by now you shouldn’t read any further, pack up and go home, but if you have, you will know this is a bottomless pit of useful opportunities which can link mobile devise to laptops, expedite data collection and so much more. Our point is that if you are not taking advantage of these time saving and information saving “apps” that are out there, then you’re losing money and making your life harder than you should.
Begin by thinking of task that could be improved, for example, work orders, then do a search on work order apps. There’s a lot of opportunity there, but you have to break the mold and take the time to investigate further, i.e slow down a little to make things go faster.
We would expect that as the Head of House Keeping, there are several specialist tasks which are already outsourced or sub-contracted, for example, the cleaning of the linen. Our question is, can these individual specialist tasks be grouped into a single contract and consequently offer one point of responsibility for you, the Head of House Keeping
The Benefit is fewer contacts to manage and reduced risk as the issue of performance is to the head contractor, the down side is there is likely an additional cost as the head contractor will charge a fee for this management and risk. Is this “fee” offset by the time saved for the you, and the House Keeping Team, Does the fee have consequential effect to the budget? Can you negotiate a reduction in this fee without effecting the quality of service?
Take the Cleaning under this discipline, there is the linen, towels, vacuuming, rooms, uniforms, guest dry cleaning and so forth. Putting this under a single point has clear benefits, including the reduction of risk, but there will likely be an additional cost for management, Can you negotiate these parameters?
Outsourcing is not just sub-contracting specialized tasks, there is more to it and there is considerable opportunity to save money if you are willing to slow down and investigate the possibilities. We would recommend, if you haven’t started a measurement and verification process in your systems, that you start as soon as practical, so you can see the benefits of any outsourcing you introduce. Every Hotel is different, every Hotel has it’s idiosyncrasies that need to be dealt with or complied with, and without measuring you don’t know if you have improved performance or not.
We have to clause this that our comments here are generalized, and every set of circumstance are different, for which individuals and businesses should perform their on diligence for their particular circumstances and viability.
Forte Asset Services
We wrote this article for which was also published in “Hotel Magazine” October 2014