The risks and benefits of outsourced staff

Outsourcing has been around for many many years now, and if used in a sensible and monitored manner it is a good thing for both the supplier and the hotel operator.

There are hotels that rent all bedlinen, towels and all room materials, and this includes the washing. There are hotels that receive all their food needs from outsourcing and just need to serve it to their guests.

But I am not here to discuss these services nor argue their merits. They are excellent tools in the right hands.

What I would like to write about is the outsourcing of staff and the extremely negative impact that this has had on independent hotels, and all hotels that abuse the service.

Of course it is great that you can call upon temporary staff that are not employees, that you have no employer – employee relations with and that are just a phone call away. Yet there are many pitfalls to this system, both in fractious relations between hotel staff and the agency staff, as well as the ugly hit to the service standards.

To illustrate let me tell a story from way back when I was a ‘stagiaire’ in London following graduation from the Lausanne Hotels chool. I was given the title of Assistant to the VP Food and Beverage manager. My main responsibility back then in the winter of 1973 was to replenish the tea and biscuit cupboard for the board members and executives, but of course no one in the other hotels knew that I was on my ‘practical’.  I enjoyed tremendous privileges when out in the hotels we owned at Norfolk Capital Hotels.

I remember one particular time when visiting a large hotel that we had just purchased. It was a hotel with a tremendous name for good service, loyal staff and ever returning guests.

The last owner happened to be on property and he invited me to sit with him for a while and enjoy a cup of tea with him.

“Why,” he asked me, “have you fired so many staff since the takeover?” “We caught them stealing Sir.” I replied. His next words amazed me, especially since I was staring out on my career and was still rather ‘green’. “Oh,” he replied casually, “I know they stole. I knew that the bartender stole, that the room maids were not averse to lifting some stuff, that the waiters sometimes stole.

I knew this, but I also knew how much they stole and kept it in check. This was my way of incentivising them, and they stayed loyal, of course. Not only loyal, but there to receive the returning guests and greet them with personalized service for which we were known. I was happy with the yearly results, they were happy with their jobs and ‘rewards’, and that is a win – win.”

I learned a few lessons from this encounter. Of course I am far from advocating that one lets employees steal. All employees must be of high personal integrity, certainly.

But what it did teach me is that hotels must find ways to keep staff loyal and on board for many years. What we had done is not thinking things through and we did not plan other ways to keep those staff in the hotel, and we lost reputation fast. We also entered a period of high staff turnover, impacting the service and driving out loyal clientele.

So now let’s go back to the outsourced staffing.

Many independent employers have got used to solving all their problems by hiring from agencies on a daily basis. Need staff tomorrow? Not a problem. Day after not necessary? No problem either.

When outsourcing service staff becomes habit, that is when the erosion picks up pace and the real damage starts to impact service and damage reputation.

What happens is the following:

• Long term and loyal staff realise that they are being paid much less per hour than the temporary agency staff.
• Agency staff are very basic and unprofessional, just hired hands.
• Agency staff are here today, replaced tomorrow.
• Agency staff are hard to train due to daily replacements.
• Agency staff have absolutely no loyalty to any hotel they work in.
• Agency staff give a level of service that is unacceptable.
• Agency staff are notorious for unpredictability, not showing up.

This leads to long term staff leaving to join the ranks of the agencies to earn more, and this in turn leads to more dependence on outsourced service personnel.

The vicious cycle has begun and it is difficult to break out of it.

Since agency staff are so much more expensive than your hotel staff this leads to:

• Considerable increase in personnel expenses.
• Considerable time wasting in outsourcing on a daily basis.
• Downgraded service.
• Increase in complaints.
• Increased compensation levels.
• Lack of control of outsourced staff, especially in housekeeping.
• Ignorance of agency staff towards hotel guests regarding hotel information.
• Ignorance of menus, foods served.
• Increased security risk, theft.
• Depreciation in numbers of returning guests.

In the long run turning to the idea of increasing your service staff by hiring temporary workers will turn out badly in many ways.

You will find it difficult to hire hotel staff due to reputational problems.

As with so many other subjects, used in moderation and when really necessary, agency staff is a good solution.There is always a good balance between your own hotel staff and the need to bolster them in high traffic times.

If you go all out on agency staff you are liable to get sucked into a whirlpool from which it is very difficult to escape.

So many hotels are the same today, but what differentiates them are the service standards offered by each different department, the level of warmth and professionalism that only loyal hotel staff can offer.

If you go all out on agency staff you will soon find yourself in a strong whirlpool from which it is difficult to escape.

You will be turning your back on the only ones that can save your hotel and make it thrive.