Outsourced cleaning services have been shown to outcompete insourced services--for both outcomes and price--once all indirect costs and estimated benefits are factored in, as long as critical quality controls are maintained.
Lowering Business Costs With Increased Cleaning Investment
At present, many businesses are seeking ways to improve future outlooks through increased efficiencies and reduced expenses.
A well-established method for accomplishing this goal is to improve the overall sanitation and safety of office buildings via targeted clean-for-health programs that have a direct impact on the workforce:
- Wellness.
- Attendance.
- Cognitive functions.
- Workplace engagement.
- Mood.
- Productivity, and;
- Retention.
According to Dr. Michael A. Berry, a Research Professor at the University of North Carolina at Chapel Hill;
A link clearly exists between indoor environmental quality, building operating cost and productivity.
In fact, increased cleaning improves worker productivity and reduces the long-term cost of doing business.
[...] cleaning only for appearance leads to a situation where not enough pollutants are removed, causing health problems in the building.
Sick days and slowed work pace, due to workers reacting to those pollutants are linked to a 5 percent employee productivity loss.
The annual loss then could be computed as $13.75 per square foot, per year.
That amounts to an annual loss of $275,000 for employee non-performance in sickness alone, not even taking into consideration intangibles such as morale and stigma.
If the owner decides to increase cleaning by 100 percent to improve the quality of the work environment and restore lost employee productivity, the costs go from $1.25 a square foot, per year to $2.50 a square foot, per year.
For an annual increase of $25,000 in cleaning activity, the business will save $275,000 in employee productivity or, when considering the other associated costs, more than $1 million in annual business operating costs.
Insourced vs. Outsourced Cleaning Services: A Cost-Benefit Analysis
When assessing insourced or in-housed managed services versus outsourced janitorial services, it is critical to factor in all indirect costs and benefits.
Of the few studies into the matter, a case analysis of insourced versus outsourced cleaning programs at the Mahalapye hospital in Botswana demonstrated that insourced cleaning services were less expensive when assessing money spent directly on cleaning costs with no other factors taken into consideration.
However, once the indirect expenses of insourcing were considered, outsourced cleaning services were demonstrably more efficient and less expensive. The indirect costs of insourcing included management costs, operational overhead, and training, in addition to the direct benefits of outsourcing, including better outcomes, improved product availability, and increased adherence to safety protocols.
According to the studies findings;
Based on a literature review and survey responses, we determined that the direct benefits from outsourcing cleaning services include cost savings for the hospital in personnel, supplies, equipment, training, and management (because the hospital no longer directly bears these costs), and overall better quality of cleaning services.
Other benefits identified include reduced time and effort managing cleaning staff, improved adherence to the hospital’s cleaning guidelines, improved availability of supplies and equipment, safer storage practices for dangerous chemicals, increased likelihood of properly mixing cleaning supplies, increased numbers of cleaning staff, and improved collection and transport of domestic waste.
The researchers concluded;
During 2014, outsourcing cleaning services in Mahalapye Hospital was more costly than insourcing, with an annual cost of BWP 218.68 (US$ 3.49) and BWP 173.45 (US$ 18.63) per square metre, respectively.
The annual cost breakdown of outsourcing and insourcing shows that, with outsourcing, the contract covers the direct costs that the hospital incurred when it was insourcing.
However, hospitals need to consider the other costs of outsourcing included in this analysis; for example, costs of facilitating infection control trainings for the vendor, utility costs, and the costs of the salary of a hospital manager who oversees and monitors the vendor’s work.
These indirect costs may be additional to the contract value.
After adjusting for quality, it costs BWP 273.35 (US$ 29.36) to clean each square metre of the hospital under outsourcing, while it costs BWP 289.09 (US $31.05) to clean each square metre of the hospital under insourcing.
Cost-benefit analysis of outsourcing cleaning services at Mahalapye hospital, Botswana
The Need for Contract Flexibility and Quality Controls
While clearly superior in many regards, outsourced subscription cleaning services present several hurdles to business owners regarding cost-benefit and outcomes, specifically:
- Contract rigidity, especially long-term agreements, and;
- The absence of quality controls.
According to a 2019 UK study into the matter;
There are strong a priori reasons to believe that cleaning contracts, and many other public service contracts, are misspecified.
Faced with the problem of monitoring and enforcing contract terms ex-post, principals use quicker and cheaper to observe metrics such as activity or process indicators rather than outcome indicators.
The ideal outcome measurement for cleanliness in health care would reflect the impact of cleaning standards on the quality of care and, potentially, on the physical abilities and recovery of patients.
Since such an outcome measure is hard to assess, policy makers resort to some performance standards that are more observable, such as how often a ward is cleaned or response times to requests for ad hoc cleaning.
These indicators act as a benchmark for accountability and serve as a base for measuring performance; however, they do not necessarily reflect an ideal measurement of the final outcome. Contractors then face clear incentives to meet these targets (hitting the target) at the expense of good outcomes (missing the point).
Cheap and Dirty: The Effect of Contracting Out Cleaning on Efficiency and Effectiveness
These hurdles can be overcome through:
- Shorter contract terms.
- Regular contract reviews.
- Surface cleanliness verifications via ATP testing.
- Occupant satisfaction ratings via surveys, and;
- Tracking and reviewing workplace illness.
Takeaway
When implemented correctly with a focus on long-term high-quality outcomes, outsourced cleaning services clearly outperform insourced in quality, effectiveness, and cost.
Checks and balances should be defined within a regularly reviewed agreement and verified through surface testing, illness tracking, and occupant satisfaction surveys.
Contact us today and discover why Vanguard Cleaning Systems® is the Standard of Clean® for businesses throughout Northwest Arkansas, Missouri, and Oklahoma.
In Oklahoma, dial 918-960-4450
In Arkansas, dial 479-717-2410
In Missouri, dial 417-812-9777
