INsourcing

Facility decision-makers often determine whether an outside cleaning business or an in-house staff cleans their buildings based on dollars and cents. For many, the lowest-cost option means going outside the organization.

Although some facility managers who’ve taken the outsourcing route are glad they did, others believe the best way to maintain clean buildings is to bring it back in-house.

“We call that insourcing,” says Ralph Rice, with consulting firm Housekeeping Systems Inc. “It happens more frequently than most people imagine.”

Housekeeping Solutions polled readers and found that facility managers from a range of building types — hospitals, universities, government buildings and schools — have insourced the cleaning function in recent years. The reasons are pretty much the same: To these facility execs, insourcing is a more cost-effective way to deliver quality cleaning services.

In with the in-crowd
St. Louis University had outsourced front-line cleaning workers as long as Charles Smith can remember — at least 25 years. Contracts with cleaning companies lasted about seven to 10 years. When contracts expired, university administrators would go through the bidding process all over again.

The last cleaning firm’s 20 percent employee turnover rate and the campus community’s concern for the cleaning workers were two driving factors in the university’s shift to an inside cleaning operation.

“Turnover should be the contractor’s problem, but we had people [cleaning buildings] who weren’t trained and that affected their ability to do the work,” says Smith, associate vice president of facility services.

The contractor did not take the time to do all the work normally involved in hiring new employees.

“Some of the companies were not doing their due diligence [with] background checks,” Smith says. “We would find out there were people who shouldn’t have been hired.”

Unhappy with the quality of the cleaning service, faculty, staff and students complained. Faculty and staff also weren’t comfortable with employee turnover. Campus employees generally liked to get to know the people who cleaned their areas.

“There were some people that, even though they did not connect with the employees, they were concerned that they were only making ‘x’ dollars an hour,” says Smith. “That was a driving force in bringing cleaning in-house.”

The campus community’s feelings were that the university should be doing something more for the workers, Smith says. Students, faculty and staff believed that custodians should be a part of the university family of employees.

Smith figured out what the university was paying the contractor in man-hours and concluded that he could pay in-house workers higher wages and offer a better benefits package with the same budget. A combination of better wages and a new absenteeism/tardiness policy would reduce employee turnover, he believed.

Smith already had a core group of university-employed supervisors, but created another level of assistant supervisory positions to help oversee the university’s 100 full-time front-line workers.

By taking on more employees, he took on more hiring, firing and discipline responsibilities. He also now handles product and equipment purchasing and worker training programs.

But three years into in-house cleaning, Smith can only point out positive results.

“We have employees who relate to the university and community and have a sense of ownership in their jobs,” he says. “We’re able to compensate employees better, decrease turnover rate, hire better employees and control our own destiny.”

Moreover, the campus is cleaner because cleaning employees are more motivated and happier, Smith says. Productivity has increased — the crew is cleaning more square feet per employee than the contractor.

“The tendency today is to outsource, but for us, it’s working in reverse,” he says. “This is not to say that contracting is bad. It’s just not the best for us.”

Contract cleaning hasn’t been the best for the Florence County (Ky.) Government Center, either.

Earlier this month, officials turned cleaning over to city employees after public services director Robert Townsend recommended the city council hire in-house workers. The city had contracted for the service since the building opened in 1998. None of the four companies the city used has provided adequate service.

“We had common problems with all four companies, including turnover and dealing with the learning curve of new employees,” says Townsend. “When a new contractor came in and they were not following specifications and tasks, we would do quality control and inspections. They would correct problems for a while and then go back to their old ways.”

Paying salaries and benefits costs the city a bit more than contracting out, Townsend says. But bringing cleaning in-house will bring benefits of its own.

“An in-house staff will allow for quicker responses to problems and we will have better oversight,” he says. “Some rooms in the building are used up to 11 at night. [New in-house staff] can help with audio/video equipment, room setup and other light maintenance because they will be second shift.”

Florence Police Department officers who work in the building also feel better knowing that cleaning workers are city employees. “We do extensive background checks and [in-house workers] see the building more as their own, so if they see a suspicious person walking around they are more likely to report it,” Townsend says.

A short walk outside
Although some cleaning managers help decide whether or not cleaning is outsourced, others have it thrust upon them.

If it were up to J. Wyatt Sasser, Virginia Tech’s campus buildings always would have been cleaned by his staff. But eight years ago, the then-governor implemented a hiring freeze.

The freeze prevented Sasser from hiring workers to staff vacant positions and newly constructed buildings, but he had the budget to pay a building service contractor to clean the five largest academic buildings, totaling 500,000-600,000 square feet. In-house custodians continued to clean another 3.4 million square feet.

The buildings cleaned by contract staff paled in comparison with the work of the in-house staff.

“The contractor hired people off the street and he paid them a little more an hour but without benefits,” says Sasser. “These people took the job to a certain degree because they wanted a paycheck, not a job.”

When the two-year contract came up for renewal, the hiring freeze was over, so Sasser hired in-house workers. One of the first places he looked for employees was among the contractor’s staff.

“During the life of the contract, the contractor became a training ground for employees,” Sasser says. “All the good people eventually came to work for us.”

Sasser’s only initial challenge was retaining the employees he hired from the contractor. But insourcing proved to be a move in the right direction.

“We elevated our level of service immediately — within months of bringing those buildings back in-house,” he says. “Customers were very happy to have us back. We’re more customer-oriented.”

In-house cleaning has paid off in other ways. Sasser believes an in-house cleaning staff helps create employee unity. As he puts it, “our staff become an extension of the building.”

The Walker Field Airport building managers in Grand Junction, Colo., recently experienced a similar chain of events: in-house to outsourced to in-house cleaning. Building managers tried outsourcing to save money, but found that quality suffered.

The airport managers tried two contract companies. “[One of the contractors] tried to cram a bunch of work into a short time and it wasn’t up to our expectations,” says Ben Peck, terminal building manager. “Our staff ended up helping with cleaning, anyway.”

Most of the in-house employees’ costs were covered by the $70,000 saved from not continuing to contract for custodial services. Customers are happier now, which pleases building managers.

“Our customer service survey has improved since bringing cleaning in-house,” Peck says. “We’re getting a lot of positive comments, like, ‘Your restrooms are great.’”

An inside job
Sometimes organization administrators outsource the management function. One hospital’s administrators sought outside help because they weren’t confident in their ability to recruit a manager.

“The hospital had gotten a contractor to manage housekeeping in the first place because [administrators] didn’t feel confident hiring a housekeeping manager on their own,” Housekeeping Systems’ Rice says, who was hired several years ago by a hospital to take over as the manager.

The level of service administrators requested was maintained at first, but over time, quality slipped and costs increased. Administration wanted to try hiring an in-house manager, so they turned to trusted vendors to recommend someone. A vendor told Rice about the job. He applied and was hired.

Rice started working right away in order to make the transition as smooth as possible, which was a challenge because he was left with nearly nothing.

“The contractor took everything with him — schedules, file cabinets, chemicals, supplies, equipment,” he says.

Hospital administrators had a feeling that the contractor would take everything and had Rice scope out the facility early to see what he would need. With vendors’ help, he restocked chemicals and equipment as quickly as possible and only lost about a day of service.

Keeping the hospital clean was a priority, so he told employees to continue cleaning and he would make adjustments later.

“It was a massive physical change for everyone,” he says. “Training had to be quick and to the point.”

In the end, insourcing was good for the hospital, says Rice, who recently worked with another manager who went through the same experience. A year ago, Jeff Bennett was hired as director of environmental services at Mercy Hospital, Portland, Maine. He, too, was hired after a contractor left and took everything, including computer equipment and files.

“I walked into black floors and dirty ORs,” Bennett says.

Bennett was in the middle of a two-week notice at a hotel job when he started coming into the hospital afternoons and evenings. He met with employees to learn as much as he could about how they went about cleaning.

“I was basically left with a blank canvas,” he says.

He used the product vendor he worked with at the hotel to help him get the hospital stocked. He spent $60,000-$70,000 on equipment and his vendor brought in used equipment to use as loaners until the new equipment arrived.

Bennett continued to do his homework. “I called every housekeeping manager in the area and toured hospitals for help,” he says.

He used what he learned from benchmarking with other hospital managers to develop operations policies and procedures. He also conducted time studies of cleaning tasks and implemented an inspection program to find areas where cleaning needed to improve.

“I implemented an absenteeism and uniform policy,” Bennett says. “Before that they wore anything they wanted — scrubs even.”

Bennett says he never expected the transition to take as long as it has. “I thought it would only take six months, but I also had issues with laundry, medical waste, pest control, etc.,” he says.

Like his in-house counterparts, Bennett deals with some employee turnover. Overall, he’s glad to be working with an in-house crew.

“People who have worked here for 35 years say they haven’t seen it this clean or people this happy,” Bennett says. “The CEO is very reluctant to go back to a contractor.”