Introduction
In the recent years the cost of sustaining and expanding of business entities globally has gone up significantly. For examples, the cost building of new houses, buying new automobiles, hiring new and retraining the existing staffs have almost doubled in the last 20 years according (Curran, 2001).This have been escalated by the recent global economic downturn which affected most businesses recently. As a result, most companies including, banking institutions, hotels, construction firms among others started to outsource services in an effort to reduce on the operation costs. Outsourcing is the act of involving outsiders to perform a certain duty which would otherwise been done by company own employees. This paper emphasizes ways in which problems arising from service outsourcing may be trounced in the hotel industry.
Hotels have been the leading service outsourcing institutions followed by banks and construction firms (Beer and Eisenstat, 2000). One major reason why hotels have started to outsource their services is to cut the overall operating overheads. For example, it is cheaper for them to hire a computer technician for some few days to perform a task and pay him as a casual rather than having a full time information technician demanding a monthly salary among other benefits from the hotel. Through service outsourcing, hotels have reduced their operating costs during this hard economic times hence improving on their profitability (French et al, 2004). On the other hand the act of service outsourcing has come at a cost to many hotels. It can be noted that once a contract has been given to an outsider to perform a certain duty, a lot of time is taken before he or she understands how certain activities are done by the contracting hotel (Hodges and Kent, 2007). This is propagated by the fact that the contracted persons are not aware of the environments they are operating in hence doing a substandard job which might end up being costly for the hotel after sometimes (Gibson and Cassar, 2005). These among others are some of the problems associated with outsourcing. However the problems may be overcomed so as to improve on overall hotels profitability.
Ways of mitigating service outsourcing problems in hotels
First the contracting hotel should ensure that prior to awarding a tender to a specific company to perform a certain task, their staffs should be aware of the role before them, if not, a pre training of should be considered in conjunction with the contracting hotel. The other important thing that the contracted company should do is to carry out a pilot survey which would make its members of staff be familiar with the environment which they are intended to work in (Bracker and Pearson, 1986). Consequently, this makes the workers to carry out the contracted duty effectively and within the stipulated time.
The second problem associated with service outsourcing by hotels is that any changes occurring in the outsourced company affects the hotel. These changes include staff turn over, change of rules regarding relationship between the outsourced company and the outsiders among others. According to Jocumsen (2004), changes occurring in the outsourced company may have fatal consequences to the outsourcing hotel if not mitigated in time. To avoid this, an agreement between the hotel and the contracted company should be put in place clearly stating how any change should be dealt with in a win situation for both parties (Bolton, 1971).
Thirdly, since the major role of any viable business is to maximize on profits, the contracted company tends to cut on their overheads and maximize profits. As a result, substandard jobs are done in areas where a large sum of money is required for example when buying materials required to perform the given task. In the long run, the hotels end up spending a lot of money which would otherwise have been saved if its employees undertook the task. To avert this problem, the hotels should ensure that their estimated budget for the work to be carried out concurs with that of the service provider before commencement of the work (Thorpe, 2008).
The other challenge facing hotel outsourcing services is the lack of skilled labour within its work force. Although it may be cost effective for the hotels to outsource in short run, it ends up being costly in the long run since the hotels ends up with no homegrown expert in certain fields, due to dependence on outside experts (Hodgetts, 2001). The act of developing internal talents is very important in a hotel based on the facts that when emergencies arise the employees are able to step in time and rectify the problem. This makes the company overheads go down as the employee will not ask for an extra pay compared to the external emergency problem solver who would have charged exorbitantly (Griggs, 2002).
Conclusion
In conclusion, it is clear that the cost implication arising from outsourcing of services may be small in short run but immense in long run for hotels. This is brought about by the many problems surrounding the quality of work done by the contractors since most of them don’t uphold the vision and the mission of the hotels (Jones, 2003). In my view, it is prudent for hotels to make sure that when outsourcing for services they do so cautiously and following the above given remedies in order for them to achieve the required results.
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