In the realm of facility management, the merits of in-sourcing versus outsourcing janitorial services is an ongoing debate. While in-sourcing might seem cost-effective and more convenient, the recent experience of a national dental management services company highlights significant pitfalls associated with this approach.
In this case study, we chart the management company’s journey and lessons learned from their attempt to manage janitorial responsibilities internally – as well as using local janitorial providers – before turning to a trusted provider (KBS) to centralize its national cleaning operations.
The Challenges of In-Sourcing
The dental management company had been using as many as 110 different local providers to clean its 130 offices, when it decided to streamline its approach by cutting the number of providers and having existing staff take on cleaning duties. This combined approach resulted in several problems almost immediately.
- Inconsistent Service Quality: With numerous different suppliers involved, as well as hundreds of staff members, the quality of services varied drastically. Some locations enjoyed quality service, while others struggled with subpar results. The approach made it difficult to enforce consistent brand standards across locations.
- Employee Dissatisfaction: Asking existing employees to take on janitorial duties – even with additional pay – led to dissatisfaction. Receptionists and administrative staff were reluctant to perform tasks like cleaning toilets and wiping down chairs, leading to poor morale and productivity.
- Logistical Nightmares: Managing multiple local providers – not to mention suppliers – and integrating cleaning tasks into the daily routines of existing staff proved to be a logistical nightmare from both an operational and an administrative/financial standpoint.
- Compliance and Validation Issues: Even though the company had reduced the number of local janitorial vendors servicing its locations, managing licensing, insurance, and accreditation processes for these providers still proved difficult. This put additional strain on the compliance and procurement teams.
The Turnaround: Centralizing with a National Provider
Realizing the inefficiencies and costs associated with a combined approach that relied heavily on in-sourcing, the company decided to centralize their janitorial services through a national provider. After putting out an RFP, and conducting an extensive review of qualified companies, they chose KBS, the largest privately held facility services provider in North America, to manage cleaning at all 130 locations. They made their decision based on several reasons: 1) KBS has 50+ years of experience working with industry leaders, 2) KBS can scale its cleaning services across multiple locations, and 3) KBS is deeply committed to investing in technology and innovation, helping raise standards and lower costs.
This move provided several critical advantages:
- Cost Savings: After an initial startup period, the centralized approach via KBS is expected to save the company 10-12% annually. These savings come not just from hard costs but also from significantly reduced management and oversight burdens.
- Consistent Brand Quality Standards: By having a single provider, the dental management company can ensure consistent service quality across locations. KBS worked with company ahead of time to develop a standardized scope of work for all sites. This is backed up by regular inspections and performance data to help maintain brand standards.
- Improved Employee Morale and Productivity: No longer burdened with cleaning tasks, office staff members can contribute more effectively to the company’s core dental operations. This has boosted job satisfaction and enhanced employee productivity.
- Streamlined Administration and Reduced Headaches: By centralizing services, the company was able to streamline complex administrative processes, including billing and payment, and eliminate having to manage employee cleaning responsibilities and quality standards across locations.
The Right Move for Long-Term Success
The dental management company's experience with in-sourcing janitorial services underscores the hidden costs and challenges of this approach when applied to a national organization. Their transition to a centralized outsourcing model with a national provider has proven to be a game-changer, offering significant cost savings, enhanced service quality, and improved employee morale.
In addition to the benefits above, the company also benefits from KBS’ investment in technology, including proprietary software applications that provide key performance data and KPIs to ensure objectives are being met. This type of transparency and accountability was not available using its previous approach.
By sharing these insights, we hope other organizations can make informed decisions and avoid some of the pitfalls encountered in this case study. To learn more, request a quote today.
