The Benefits of Outsourcing

OVERCOMING OBJECTIONS: “I’M GOING IN-HOUSE

One of the most common causes of service termination in the building services industry is the customer going In-Housewith their janitorial program. Among many reasons given, the customer seems to think it will be cheaper and easierthan outsourcing. In overcoming this particular misconception, below are some of the cost and risk factors that anyone who goes in house will need to be aware of. It is important to educate the customer in these potential obstacles to in house actually being cheaper and easier:

Increased Exposure and Liability

  1. Workers Compensation Claims
  2. Accidents / Slip and Fall
  3. Damage, breakage, and loss
  4. Employee litigation (EEOC, hostile environment, …)

Full Cost of Labor

  1. Wages
  2. FICA
  3. Unemployment Taxes
  4. Medical, Dental, Life Insurance
  5. Long Term and Short Term Disability
  6. Retirement / 401 (k)
  7. Holiday pay
  8. Vacation pay
  9. Sick pay
  10. Overtime pay
  11. Incentives
  12. Bonuses
  13. COLA and merit raises

Cost of Recruiting and Hiring

  1. Employment application/processing efforts
  2. Employment screening
  3. Employment testing
  4. Payroll processing time and costs
  5. Management time and resources
  6. Replacement of missing/late/sick workers

Cost of Training

  1. Wages
  2. Management/Trainer time and wages
  3. Materials, tools, facilities
  4. Better cleaning?

Additional Cost of Management

  1. Wages (additional personnel required to manage janitorial program)
  2. FICA
  3. Unemployment Taxes
  4. Medical, Dental, Life Insurance
  5. Long Term and Short-Term Disability
  6. Retirement / 401 (k)
  7. Holiday pay
  8. Vacation pay
  9. Sick pay
  10. Overtime pay
  11. Incentives
  12. Bonuses
  13. COLA and merit raises
  14. Turnover (no ‘career janitors’)

Cost of Additional Benefits

  1. Uniforms
  2. Meals
  3. Incentives/Contest Awards

Cost of Equipment and Supplies

  1. Vacuums, buffers, …
  2. Mops, bottles, buckets
  3. Paper towels, tissues, covers
  4. Cleaning solutions, chemicals, waxes
  5. Trash bags, liners