Outsourcing: A Prime Example of 'The Sum of the Parts is Greater than the Whole'
By Brenda Fields Founder, Fields & Company | October 28, 2008
Outsourcing over the past several years, has taken on a negative perception in the market place. It has recently been associated with the idea that big businesses outsource some of their support services and functions in foreign countries in order to reduce expenses, and that this is invariably at the expense of customer satisfaction as well as local jobs. An example of outsourcing gone bad is technical support services moved to foreign countries where the technicians who are not fluent in the customer's native language, try to communicate complicated technical information and provide solutions to problem. And, to make matters worse, the service is also priced at a high rate per minute; so inefficient problem solving is very, very costly to the customer. But, in the case of small independent hotels, outsourcing can provide major benefits which would allow these properties to provide specific services and expertise that they would not be able to offer because of the costs associated. As selling rooms is the primary goal, these enhancements only create an opportunity to increase demand for your property.
Small, upscale independent hotels are faced with the challenge of competing with the chain hotels which have much greater marketing resources and marketing funds as well as the advantage of the economy of scale. Outsourcing various functions allows a property to get a "big bang for the buck" when used effectively and wisely. By tapping into outside resources which make their living by specializing in specific areas, a hotel manager or owner can potentially add value to their property and benefit from greater expertise, more cost effectively than providing on their own. Therefore, when putting it all together, the sum of the parts is truly greater than the whole.
Most small, independent hotels do not find it cost effective to hire a staff member or to create a department dedicated to the recruitment of personnel, even though the identification and recruitment of qualified candidates is crucial to the overall performance of the property. That function, more often than not, falls on the shoulders of the general manager. Therefore, it may be beneficial to consider the services of an employment recruitment agency which has an up-to-date database of qualified candidates in all positions and provides quality reference checks and background checks. Depending on the size of the property and the number of employees, this service, if warranted, can be contracted on an annual retainer basis, which specifies the number of positions per month as well as the terms for any replacements. Outsourcing this area may allow a manager or an owner to improve the efficiency of hiring well qualified and well referenced employees, and freeing up their time to attend to planning, sales, and operations.
A dedicated sales position on your property is ideal as there is no conflict of interest and no chance of a sales call being made for another client at your expense. But, the downside is that if the sales process is not expertly devised and implemented, then the cost of sales can surpass what is actually realized. There are companies which specialize in providing outside sales solicitation services on behalf of your property. These companies typically handle multiple clients. Therefore, if this function warrants outsourcing, it is important to ensure that systems and procedures are set up with an outside sales company to ensure that quality sales calls are made on your behalf and that the annual revenues generated are approximately ten times the cost of hiring the company. Additionally, it is important to have consistent reviews with the company to ensure that they are selling your property properly and that they have up-to-date information on the property, promotions, demand periods, and the competitive set.
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