Outsourcing is not a new phenomenon. Companies have often relied on external staff to fulfil contracts or even entire functions. However, in the last few years, there has been a significant increase in Dubai hospitality companies, particularly hotels and resorts, outsourcing large portions of their housekeeping departments to specialist providers such as Isnaad.
Here we examine the reasons why outsourcing housekeeping staff can have a significant positive impact on the bottom line, the potential trade-off and how to mitigate this.
Seasonality
The Dubai hospitality and tourism industries are clearly seasonal. The hot summer months see a downturn in activity, whilst for 7 to 8 months a year Dubai becomes a bustling city full of holidaymakers and events.
Therefore, staff levels need to adjust to these circumstances. Of course, this could be managed somewhat by annual leave within the property itself, however this is not normally sufficient to cover the full 4 to 5 months of reduced demand.
The reality for staffing providers such as Isnaad is different. By holding contracts in other industries, such as office buildings, which require a steady level of staff all year round, they are able to send staff on holiday across all contracts and rebalance accordingly, with excess staff drawn from hospitality venues being allocated to other sites.
Isnaad is also able to leverage its size (over 3,200 employees) to efficiently recruit temporary employees for peak season. Whilst the primary solution is to use excess hospitality staff to cover annual leave on other sites (as explained above), the reality is that some additional staff are recruited on a temporary basis. Recruiting a large number of temporary staff leads to a lower effective cost per person in terms of management time and recruiter fees.
Saving on Management Time
Managing large numbers of staff is time consuming and requires specialist knowledge, care and attention. Larger suppliers are able to dedicate managers with the requisite language skills and cultural knowledge to effectively manage employees. Moreover, there are economies of scale in implementing processes, managing transport, looking after accommodation issues and more. This is particularly relevant when you have a large staffing provider servicing a smaller hospitality client.
Purchasing Power
Specialist companies are also able to pass on savings to their clients when buying equipment and products, uniforms and other ancillary items. Again, this is most relevant when considering a larger supplier and a smaller client. However, aside from cost, because suppliers like Isnaad operate across a variety of sites, they are able to move their own equipment from site to site when required. This saves clients from paying expensive rental costs or buying equipment that sits unused for large portions of the year and provides insurance against emergency situations which require quick action.
Another important saving can be seen in accommodation costs. The per person cost when operating an accommodation facility housing thousands of staff is significantly lower than renting rooms for 50 to 100 staff in a smaller or shared building.
Training and Best Practice
One area that could be described as a potential risk when outsourcing staff is maintaining consistently high standards. In reality, this risk can be high when using smaller suppliers who cannot afford to train their staff or do not have the means to do so effectively. Isnaad is BICs (British Institute of Cleaning) certified and places an emphasis on continuous in-house training and development.
In fact, larger suppliers are best placed to keep on top of industry best practices and innovations, giving their clients an extra layer of assurance and optionality. An example is Isnaad’s recent smart bathroom project which has been piloted in house first and shown to provide excellent benefits in terms of cost savings and increased service quality for certain types of facilities and scopes.
The Importance of Scale
As can be seen in all the points above, the common denominator for the outsourced staffing model to work is supplier scale. This allows effective management without creating an unworkable cost base, drives purchasing power and allows mitigation of performance risk through effective in-house training.
Isnaad has focused on creating this scale through taking on large anchor hospitality clients such as the QE2. By successfully executing on this project and others that have followed, Isnaad has been able to build a portfolio that allows the outsourcing business model to function.