Outsourcing And Privatization — It All Depends On Your View

If you are a contractor or building owner, outsourcing is good news; business prospects are looking up and opportunities for profit and cost reduction are on the horizon.

If you are an in-house manager, supervisor or cleaner, you probably see outsourcing as a threat to your livelihood, something you''d just as soon not think about, let alone experience.

Even though outsourcing is on the rise, and has been for the last 30 years, it''s not the end of the road for in-house operations.

An in-house operator should see the trend as a wakeup call providing the motivation needed to reorganize your department and make it more competitive in today''s cutthroat marketplace.

There are many reasons why companies, organizations and the government outsource cleaning services.

Here are some of the common "whys" I hear:

1. Cost savings: Normally, a 30 percent to 40 percent reduction in labor costs is what is sold and often realized
2. Technical expertise: Let the experts do what they do best, allowing in-house staff to focus on the core business
3. Liability: Shift the responsibility for such things as lawsuits, claims and complaints to the contractor
4. Responsibility: Place the responsibility for hiring, firing, managing and union issues on the contractor
5. Cost control: Paying a set amount each month allows for better budgeting, and depending on the agreement, if the contractor goes over budget, our costs remain the same
6. Financial management: We use the contactor''s money for labor, equipment and supplies for 40 to 60 days, interest free
7. Equipment financing: The contractor owns and maintains the equipment
8. Education: The contractor knows the industry and is required to train and certify their staff
9. Less management time: We have one contact person to deal with and get one invoice each month.

There are also many reasons why companies, organizations and the government keep cleaning services in-house.

Here are some of the common "whys" I hear:

1. We don''t want to lose control over internal operations
2. We don''t want outsiders in the facility
3. We know our needs better than anyone else
4. We can do it as good or better than anyone else
5. Union objections and internal politics are a hassle
6. We use the custodial department as an entry level-job and promote from there
7. We''ve always done it this way and our people have been with us for many years
8. We could end up with no staff, no management and no equipment or cleaning program, and going back in-house would be very difficult and costly.

Reality

It''s a mixed bag; every situation is different.

There is no reason an in-house operation can''t be as competitive as an independent contractor.

There are no secrets today; the same equipment, chemicals, training and expertise is available to everyone.

Often, the problem is a failure on upper management''s part to understand the true value of the cleaning and maintenance functions in their organization.

The next problem is hiring a qualified management team that is capable of putting a professional cleaning program in place and running it in an organized manner.

Hard choices are often required, and some companies and individuals just aren''t comfortable making those choices.

Another issue faced by many larger companies is the union contract under which they operate.

There can be unrealistic and nonproductive requirements to which management must agree over the years that limit hiring, staffing and wages, which make it difficult to implement the changes needed to be competitive.

Not all contractors do a good job; some are poor managers, some are dishonest and some don''t have any idea what they are doing.

Some companies, after a bad experience with contracted services, go back in-house with their cleaning operations.

A blended option is another possibility where a contractor is used for some, but not all cleaning tasks.

This is common in health care and hospitality industries, where patient and guest rooms are maintained by in-house staff while common areas and periodic tasks are contracted to firms that specialize in jobs.

Keep it clean out there.

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Wm R. Griffin is president of the International Custodial Advisors Network Inc. (ICAN) and owner of Cleaning Consultant Services Inc. ICAN is a non-profit association comprised of industry consultants with a wide range of expertise in building management, indoor environmental and service disciplines. This network provides free janitorial and building maintenance consultation service to the industry through the Cleaning Management Institute (CMI). Comments to Griffin are welcome: (206) 849-0179; WGriffin@CleaningConsultants.com.