Nitenite Hotel Birmingham Outsourcing Housekeeping Department Dissertation

Introduction

Today the reference to outsourcing is considered to be a significant business strategy that allows the organizations to show up in the local and global markets by dint of additional services. In the perspective of the hotels, it also gives a chance to focus on lodging and pay less attention to such basic thing as cleaning (Zhou & Ren 2010). Still, some units believe that it is enough to utilize in-house sources and control the situation totally, which proves that the disagreement exists and the problem requires a thorough investigation that can conclude which path to follow. When researching this issue, we try to find out whether it is really advantageous for the hospitality industry to utilize outsourcing. For the study to be more precise, we consider how Nitenite Hotel Birmingham can use this opportunity.

Aim

The aim of the research can be seen as the determination to define if it is more beneficial for Nitenite to outsource the housekeeping department.

Objectives

Taking in consideration the aim of the research, its objectives can be determined. They include:

• Overview of outsourcing
• Overview of Nitenite Hotel Birmingham
• Housekeeping department in Nitenite Birmingham
• Benefits of outsourcing housekeeping
• Disadvantages of outsourcing

Rationale

As a rule, the majority of the services (even though they are non-core ones) are managed by the in-house staff of the hotel. However, recently numerous unities started referring to private service providers because they allow the hotel to maintain excellent services even if one does not have its own personnel (Wilson 2011). A decent work of the housekeeping department is significant for the hotel, so it is critical to define in what way it should be managed to bring success to Nitenite.

Literature Review

Hospitality industry operates in various sectors that are mainly connected with leisure time and includes different units, among which the hotels can be found. As a rule, they provide lodging for a particular period of time, but their operations contain a rather broad range of various services (Mackenzie & Chan 2009). In many cases, they are limited and delivered by the personnel of the hotel. However, some units find it more beneficial to refer to the third parties, which provides the hotels with the opportunity to refer to the outside providers and make the customers more satisfied. It is called outsourcing and can be seen as a great chance to enhance performance, be more productive and flexible, as additional services are maintained by the experienced professionals. Outsourcing can relate to different things; these may be food, security, cleaning, etc. The housekeeping department can also consist of the employees from the other organizations even though it deals with keeping hotels clean and rooms stocked, which is one of the most critical things for these units (Munroe n.d.). Outsourcing is said to be advantageous because it allows a particular service to be managed by the professionals from a specialist, which presupposes that the results are more efficient than those that can be obtained if the services are delivered by the organization itself (Quinn 2000). Thus, the inherent advantage of the specialist organization in the production of particular services is considered. Agyemang–Duah et al. (2014) defined outsourcing as “the process of establishing and managing a contractual relationship with an external supplier or service provider for the provision of capacity that has previously been provided in-house” (p. 27). Still, if the company uses help from the outside, it does not mean that its existing employees are to be fired, as they can have the same duties and cooperate to improve performance.

It is rather difficult to find the personnel that perfectly meets the superior’s expectations. To streamline this process, the hotel often refers to outsourcing. In the sphere of the hospitality industry, this solution is commonly used, as it has a range of advantages. As the third party looks for employees and hires them, the hotel superior does not need to do this and can save some time required for interviewing, paperwork, etc. Outsourcing is also a good way to save money. Calbone (n.d.) mentions that “while some additional costs are included in the hourly rate remitted to the third party than the hotel would pay directly to its own associates, this amount will still be less than the overall costs of a full-service hotel’s benefit system and the expense to administer it” (p. 1). It is also advantageous because the hotel shares the responsibilities with another company. Thus, if the employee gets injured, one gains money from that firm but not the hotel. It also works with particular benefits that are to be paid to the workers on the basis of the peculiarities of geographic locales. Moreover, outsourcing can provide the hotel with the employees who are not available in the local market. It occurs to be possible to find people from the outside if such option is needed. Still, the main benefit seems to be the quality of work, as the personnel is experienced in the sphere and is concentrated on the particular range of duties. Simon (2010) also notices that the hotel has a chance to test the personnel and terminate the contract within a limited period of time if the employees do not fit. There is also no necessity to buy expensive specialized equipment that is needed for some services, as they are likely to be owned by the third party. Moreover, there is no necessity to train the workers. One obtains an opportunity to hire people who are already aware of all peculiarities of their job and are able to do everything by themselves. The staff turnover can be reduced so that the operations become more consistent.

Even though outsourcing has a range of advantages, its negative aspects cannot be ignored and should be considered before utilizing this approach. It is essential to make sure that the outsourced employees are equal to the in-house ones. It means that the hotel is to maintain decent communication with the company it refers to in order to ensure that the staff understands its mission and the goals. Jaume (2015) presents the idea opposite to the one that Simons (2010) has and stands that it is also critical to maintain training, as one is to make sure that the personnel is able to provide the services on the expected level and according to the accepted standards. Moreover, there is a possibility that the workers will have bad English, which is likely to cause communication issues with other members of the staff and guests and require language training. One of the main problems that are commonly seen is the creation of two separate teams. In-house and outsourced personnel are to be treated as a whole for them to work as one team and have shared views and values. Otherwise, a range of misunderstandings is likely to occur. One more disadvantage is that the third-party is in charge of defining the way, in which the tasks set by the hotel should be accomplished. In other words, housekeeping managers can tell the personnel only what to do, but all peculiarities concerned with how the things should be done are to be transferred to the third-party beforehand. It means that the hotel is losing control over its affairs, and the quality of work cannot be ensured. Except for that, there is a possibility of security problems, as the hotel provides critical data to the other company (Jaume 2015).

Methodology

The objective of this section of the paper is to show and explain the methods that have been used while searching for information in the framework of current research.

The documentary research design was chosen because it involved a range of steps that allowed gathering all needed information. In particular, such thing were maintained: a search, retrieval, analysis, criticism and interpretation of secondary data (namely those obtained and recorded by other researchers in documentary sources, the purpose of which included the contribution of new knowledge) (Saunders, Lewis & Thornhill 2009). However, the study was not limited to documentary research design. The field research design was also used, as some data was collected directly from the research subjects.

As it was briefly mentioned in the previous section, the administration in Nitenite hotel has a hierarchical structure. It presupposes that the employees who have junior positions are less knowledgeable and can provide a rather limited range of information. For the study to be thorough and based on accurate data, we referred to the person who is highly aware of all operations managed in the hotel. As a result, the sample of the research included the General Manager of Nitenite. All other sources of information connected to the topic were different pieces of writing, which are discussed further.

The method chosen to perform the research about the hotel outsourcing was a combination of secondary and primary research, as it allowed to receive the most accurate data. The secondary research was the first step made in the very beginning of this study because it provided the most basic information about the topic. In the framework of the secondary research, we made use of material that has been previously investigated and published (Saunders, Lewis & Thornhill 2009). In addition, this method is considered to be a helpful tool, which provided an opportunity to extract valid information for this research. It has been obtained through documentary written material that has been gathered from several articles, journals, books and reports through online sources such as Athens, Emeral and Usearch. In other words, the data was gained from the existing third-party sources of information. Stewart and Kamins (1993) state that researchers who use secondary data have the advantage over those who use primary data, due to the fact that they firstly refer to the information that already exists for some period of time. It can be analysed, compared with other sources and checked for accuracy to prove that it can be utilized as a source of information. Different works have been carefully explored in order to select related information and manage secondary research. A range of qualitative research data is provided by the professionals of the hospitality sector as empirical evidence that should support the presented topic (Saunders, Lewis & Thornhill 2009).

In order to obtain accurate information about the subject, the criteria of inclusion/ exclusion have been used (Saunders, Lewis & Thornhill 2009). In this particular case, the date when the sources were published was one of the key criteria to exclude some of the materials. Although, in principle, the date was not a relevant criterion of exclusion/inclusion, because the secondary research was conducted as a qualitative one. The fact that that a lot of materials about this topic were obtained, allowed to reject the information, which was not relevant for the nowadays. Another criterion of inclusion/exclusion included our personal objectives regarding this research. There was a large amount of information about outsourcing; however, not all of it matched with the topic. Some also did not come from reliable research sources such as those mentioned before, for instance: Athens, Usearch, Emeral, and Google Scholar. As the secondary research was not specific to the research question, the primary research was needed.

The primary research was focused on the structured interview. According to Kahn and Cannell, an interview is “a purposeful discussion between two or more people” (1957). It was performed with the aim to collect specific information related to the research question and objectives of the study. It is known as a semi-structured interview that is not standardized. Moreover, it is also called “qualitative research interviews” (King 2004), because they provide us with the data that is not statistical. In this particular case, it had some traits of in-depth interviews, because they were conducted face-to-face, and there were no witnesses of the communication between the researcher and the interviewee. Such kind of the interview was managed with General Manager of Nitenite Hotel Birmingham. Its purpose was to obtain the answers to a small group of questions about the subject. The use of interview helped us to “gather the most reliable data that is relevant to the research question(s) and objectives” (Saunders, Lewis & Thornhill 2009, p. 242). Some of the mentioned earlier objectives presented in this research were: benefits of outsourcing housekeeping and disadvantages of outsourcing and overview of Nitenite Hotel Birmingham. In addition, the interviewer had a number of relevant questions to acquire the information related to the aims of the researched topic such as an overview of outsourcing, an overview of Nitenite Hotel Birmingham, housekeeping department in Nitenite Birmingham, benefits of outsourcing housekeeping, and disadvantages of outsourcing. Before the interview was arranged, a range of various questions was created and transferred to the General Manager not only with the purpose to let her know what to expect during it but also with the intention to obtain suitable data about the matter. In this case, it was necessary to gather two meetings to expose concepts and control the reliability of the information. Furthermore, some points were considered in order to elaborate this questionnaire. They included such things as:

• How long will the questionnaire last?
• Which type of questions should be asked (i.e. opened or closed)?

In spite the fact that the interview was something between semi-structured and depth interview, primary research was focused on it as a method of collection of the most valuable information for the research. The questions that the participants were asked to answer included:

1. Why are the food and beverage department outsourced?
2. Why has the laundry service been outsourcing?
3. Are there any other departments or facilities outsourced?
4. What do you think about outsourcing housekeeping department?

A total of four questions were performed for the interview. They were designed according to Wilson (2006), who identifies three types of questions (open questions, closed questions and scaling). As a result, all questions were performed in regard to the opened style with the intention to obtain the most in-depth answer. The data that the questionnaire was aimed to gain expanded the information gathered during the secondary research. Except for that, it helped to address some more specific points directly related to the outsourcing of some services and departments within the Nitenite hotel.

Needless to say that the information gained by dint of this interview provides suitable to the topic answers and should be sufficiently analysed. The methodology of the analysis of data was an essential phase in this research procedure. The analysis implicated the separation of the basic elements of information, and it examined them in order to respond to the issues raised during the investigation. Different levels of analysis were used manage this investigation, such as exploratory, descriptive, interpretive and explanatory.

Considering ethics, the part of the research connected with the interview was conducted only when the superiors got to know its peculiarities, and the permission was gained. The aim of the study and the way it was conducted were explained to the sample so that no issues occurred with the course of time. The research does not disclose any personal information about the participants. All data was gained on a voluntary basis. The interviewer got a permission to name the positions of the personnel.

Analysis of Findings

To present the findings of the interview as well as their analysis, we will consider each question separately from the very beginning. In this way, it is possible to perform the most detailed data and omit the issues related to the mishmash of information.

Nitenite is an independent hotel that does not belong to any hotel company. It is owned by two partners who share fall to 49% and 51%. About four months ago the hotel got a supplier called Then Hospitality. It provides integrated solution into the intangible aspects of the service. In the heart of Birmingham´s vibrant centre, Nitenite is a simple but brilliant budget boutique hotel. It is a distinctive alternative in the marketplace that is financially accessible and can be an innovative experience for the guest. In terms of advantages, the hotel has a convenient location in the centre of the city with the Birmingham New Street Railway Station only to 10-minute walk away. Furthermore, this hotel has 104 rooms and 11 apartments. It has a 24-hour front desk and free Wi-Fi. The hotel’s high-quality interior as well as windowless, which allows Nitenite to distinguish itself among the other hotels of the same standard.

Nitenite is viewed as affordable, stylish and comfortable city centre overnight accommodation for late arrival, early start meeting or a convenient base for shopping and entertainment.

Among the most frequent outsources items is beverage and food that is why the attention was firstly paid to them (Simon 2010). Answering the question “why is food and beverage outsourced at Nitenite?”, the General Manager underlined that the beverage offering is not outsourced at the hotel (2016, pers. comm., 2 January). It was claimed that Nitenite is not very large, and it does not present itself as a set of luxury apartments, so the demand for this service is minimal. The majority of the guests are satisfied with the things they have, and a limited variety that is offered and sold from the lobby area is enough for them. As a result, the products are kept relatively simple and include no draught beers or bottled wines. In regard to the same reasons, the food offering is also minimal at the hotel. The majority of the products that are present are snack items, supplied by breaks to be sold internally via reception or the vending machines. The stock in the vending machines is also limited. There is only one item and it is in-house (not outsourced). Still, the General Manager admitted that there is one product related to food that is outsourced. These are sandwiches. These are produced by a local supplier and delivered to the hotel every couple of days (2016, pers. comm., 2 January).

The approach that is used by Nitenite hotel allows it to receive a range of advantages:

• There is no necessity for the personnel to get occupied with additional duties. They do not need to receive any training and can manage only basic activities. It is also advantageous for the hotel itself. In other words, as there are no members of staff handling food, a food handling qualification is not required. As the result, Nitenite gains an opportunity to save their money, time and effort needed for the personnel to receive decent skills and be legally accepted.
• No additional staff members are needed to produce the food. If the hotel did not refer to outsourced employees, one would have to meet all obligations and hire people who well-educated and can work efficiently in their sphere. It would be impossible to communicate new duties to one of the employees, as one’s skills will not be good enough unless this person really has needed education. So it occurs to be rather convenient for Nitenite to outsource a very limited range of products.
• Moreover, the advantage can be seen when considering the hotel as a building. To provide the guests with the food using in-house sources, one needs to work in a particular place. It means that there would be a necessity to make a substantial repair, create a kitchen and supply it with numerous items including machinery and utensil. Thus, as there is no kitchen required, rental or purchase of machinery is not needed, in addition, PAT testing, servicing & extraction (use & cleaning) is not required. As a result, Nitenite gains an opportunity to spend the money they would leave for the kitchen, can be used for other purposes.
• No wastage is faced by the hotel. When making a decision to outsource, the organization has a chance to make sure that that third party operates as they expect. They have an opportunity to base their contract on sale and return basis, which was done in the particular case of Nitenite.

However, such an approach of providing the guests with the food is not totally positive and beneficial. Some disadvantages of limited food outsourcing can be found:

• The hotel receives a particular amount of sandwiches from the local producer according to the contract with the third party. It means that the food is delivered several times a week, and no additional products can be purchased and brought to Nitenite. In other words, if the number of clients increases unexpectedly or they just buy more products than usually, the hotel will run out or sandwiches and have nothing to sell instead of them. Unfortunately, according to the contract and the hotel’s abilities, there is no option of producing more food. As a result, Nitenite may miss out on potential revenue. Moreover, the customers who did not receive sandwiches as they were sold to other people, as well as those who just want to receive more food, will be dissatisfied and not willing to stay in this hotel another time they visit the town.
• One more disadvantage is the lack of control regarding the operations that are conducted by the supplier. As Nitenite sells food to the clients, they tend to address its quality to the hotel but not to the company that produces it. As a result, when some issue occurs, they blame Nitenite. The hotel turns out to be not able to control the way the sandwiches are made so it also cannot ensure the clients that their quality is really high.

In this perspective, it is vital for the hotel to share its understanding of quality with the third party (Hemmington & King 2000). It can also be advantageous if they refer to the supplier that is known at least in the local town so that people feel confident in the products they refer as well as the hotel. If there were a demand for food of good quality, the personnel would refer to the local restaurant. Still, in the current situation, it seems to be more advantageous to limit this service and control all maintained operations (Lamminmaki 2011). Such approach allows the hotel to remain competitive in the market and attractive for the customers.

The next thing that was discussed with the General Manager of Nitenite in the framework of outsourcing was laundry. She was asked to tell if the laundry is outsourced in the hotel and to provide several reasons for the decision. As it turned out, Nitenite really refers to outsourced staff when dealing with laundry. These services are delivered at a distance but remain advantageous for the hotel. As the General Manager mentioned, laundry is outsourced because in this way they can receive such benefits:

• Consistency. The partner that is in charge of the mentioned services is always available. It is one of the most competitive organizations in the local market, which is advantageous. Moreover, the firm provides services of good quality, which makes clients satisfied.
• Space to launder, dry & press. Nitenite hotel is not very big, and it would be rather difficult to find enough space for various services. Outsourcing at distance allows the hotel to save space and utilize all needed devices that they do not have in-house.
• Staffing. The manager is well aware of how the personnel that looks in the hotel should look and what skills one should have. However, one is not a professional in laundering and cannot be sure that selected employees are really good professionals. Still, in the perspective of outsourcing, the third party is in charge of staffing. Having enough experience, it can ensure the hotel that the workers are able to cope with their duties.
• Keeps up with technology. It would be too expensive for Nitenite to buy various devices needed for laundry. However, the professional organization manages its operations due to them and changes them trying to utilise the best products, which also allows Nitenite to achieve success.
• Replace damaged items. According to the contract that was signed by both parties, the firm that deals with laundry is in charge of the quality of services. Thus, if something is damaged in the process, it is to be replaced by the company (2016, pers. comm., 2 January).

Such reasons are also considered to be positive for the hotel by Promsivapallop, Jones, and Roper (2009). They claim that laundry is among the frequently outsourced services, so it is not a surprise that Nitenite revered to it. Still, they mention that the hotel is no pay much attention to the transportation, in this case, as the items are to be constantly delivered and taken away. The General Manager also pointed out that they would like to have more control over the operations. Except for that, this service turns out to be not very flexible, as the last minute pick-up may result in lack of linen (2016, pers. comm., 2 January).

When speaking about the other departments and facilities that are outsourced, the General Manager mentioned:

• Maintenance.
• Maintenance contracts (air conditioning, drainage, and water services).
• IT.
• Accounts.
• Payroll.
• Pest control.

These departments and facilities require specialist skills that cannot be obtained by one person. Leeman and Reynolds (2012) support such actions and claim that it is better to refer to the professionals than to look for employees, as the superiors are likely to have problems when evaluating professional skills and making decision. Moreover, this can save money in the long run by reducing call-out fees for one-off jobs.

The biggest area outsourced in Nitenite is the management department, so the General Manager paid more attention to it. The hotel has a contract with Then Hospitality, the advantages of which include:

• Creation of a brand effect being part of a portfolio as opposed to an independent hotel.
• Support structure with both management and staffing requirements.
• Giving the buying power for large suppliers (if they supply throughout the portfolio) reducing costs.
• Assistance with the practical, day to day requirements of a highly competitive industry.
• Offer of key skills with HR and internal training.
• Internal Health and Safety consultancy.
• Assistance with brand development (2016).

When speaking about outsourcing housekeeping, the General Manager mentioned that is it better for Nitenite to keep this department in-house (2016, pers. comm., 2 January). She said that a key benefit of outsourcing housekeeping is the ability to reduce the staff turnover, as statistically this department has the highest turnover rates in the whole hospitality industry. But, fortunately, Nitenite is not the case, and the hotel does not have such problems.

The housekeeping department is vital for the hotel. In the case of Nitenite, it is hierarchically integrated by the head of housekeeping, followed by the housekeeping supervisor and, finally, the housekeepers. Among the duties of the head of housekeeping are the tasks to: select and train staff, develop schedules, including holidays and days off. Also, one is to refer to the maintenance department of the execution if any damage in the areas of their responsibility is found; periodically address to the manager and check with one his department expenditures; and monitor monthly inventories and request the finished stuff general manager. The supervisor of housekeeping has similar duties as he is replacing the head of housekeeping in his absence. In this way, he is in charge of controlling linen, cleaning the public areas and supporting the head housekeeping as well as carrying out any reasonable duty when it is requested by the manager team. Lastly, the housekeepers’ team should be considered. It is not the least important unit, and it plays a vital role in the life of the hotel. This group is constituted by 7 women.

Even though the General Manager admitted that there are good arguments for outsourcing housekeeping, she believes the advantages of keeping the department in-house to be more valuable:

• Dedicated team. When the same people work together daily, they got to know each other better it is easier for them to stick to the shared vision. It also allows them to maintain consistency and high standards.
• Control. As the employment is direct, the General Manager gains an opportunity to select the personnel and receive control over the department.
• Cost control. All expenditures can be evaluated by and controlled by the superiors so that financial issues are less likely to occur (2016, pers. comm., 2 January).

Still, it would be wrong not to mention the disadvantages of in-house housekeeping:

• Equipment is to be supplied in-house. It requires not only money but also some space in the hotel.
• Training costs. Without outsourcing, the staff is to be recruited by the manager, and the hotel needs to pay for training, which is rather costly.

Conclusion

On the basis of everything mentioned in the research, it can be concluded that outsourcing can be very beneficial for the hospitality industry and Nitenite Hotel Birmingham, in particular. However, it is more advantageous to outsource the facilities that require special skills (such as IT or management) than to use this approach when dealing with basic things. The research also showed that it is beneficial for big hotels to outsource the housekeeping department because of the adverse influence of the high staff turnover. Still, Nitenite does not face such problem right now, which proves that it is better for this hotel to keep the housekeeping department in-house. Such a decision allows the hotel to have a dedicated team with the shared views and standards of quality and to control all related operations. Of course, it does not mean that other departments should not be outsourced. It is critical to evaluate the situation and define where the reference to the third party will be beneficial, as it is very important for the organization to decide how much to outsource (Harland et al. 2005). Nitenite should evaluate their work and start outsourcing the housekeeping department only if the quality of its services worsens or the staff turnover becomes too high. In this case, it would be advantageous to consider “strategic analysis, selecting the providers, and managing the relationship” as the keys of successful outsourcing (Embleton & Wright 1998, p. 97). Still, for now, this research proved that Nitenite manages this department in the right way and that the changes are not necessary.

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