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IFM Expectations of Soft Service Providers

The Indian cleaning industry is still in the nascent stage of growth with regards to the office/property space. However, the expectations of the large number of MNCs as well as Indian conglomerates are of international standards which are difficult to be met by the cleaning service agencies in the unorganised sector. Therefore, the MNCs typically include the cleaning services as part of the Integrated Facility Management (IFM) portfolio. As in the developed markets, the IFM services are outsourced by organisations to specialised real estate service providers who in turn sub contract the housekeeping services to agencies specialised in this area. Typically, housekeeping services would include task level cleaning manpower management, equipment management, chemicals & consumables and maintenance management.

In the Indian market, there are a large number of players in the sub vendor category mentioned. These agencies not only provide service through the IFM companies, but also undertake a large amount of work through direct contract. However, this is largely and unorganised sector, with majority of such agencies being start ups with 20-50 employees, serving limited clients. The midsized players in this sector have cleaning personnel strengths between 100-1500 and the large agencies employ upwards of 2000 people and service multi locations.

Challenges faced by IFM companies

Outsourcing typically brings with it a certain level of risk and loss of direct control. In the case of housekeeping services, which in India is a highly manpower driven industry, the challenges are even greater. IFM companies however, operate on the outsourcing model for delivery of housekeeping services and hence, have to work around these challenges and risks to give world class service expected from these companies. Some of the key challenges that IFM companies face when they outsource the cleaning services are as follows:

  • Limited professionalism: The cleaning agencies are typically entrepreneurs and family owned businesses. These agencies start off small and with the drive and determination of the proprietor, provide reasonable service to the IFM company hireling them for their clients. However, the main thrust is on manpower supply and the task of the delivery of service in a professional manner is left to the IFM provider. The agencies have limited knowledge of the finer aspects of cleaning, use of modern equipment and are dependent on the IFM provider for guiding their teams in this aspect.
  • Quality manpower: Cleaning services are still manpower intensive in India, and hence, availability of resources of the right quality is essential to deliver efficient service. However, as the Indian market for this service is still developing, skilled and trained manpower is virtually absent. The agencies take on untrained manpower from the local environment and deploy them in the field. This puts in additional pressure on the IFM to manage this set of resources.
  • Availability of staff: With the boom in building and office space, the demand for professional cleaning services is increasing at an exponential rate. The manpower deployments run into hundreds in large projects such as airports, hospitals and large building complexes. There is thus a large demand for the limited talent pool available in this segment. Majority of the task level staff of the cleaning agencies are rural migrant people, who come to the metros in search of a livelihood. This segment of people is highly mobile and has a tendency to go back to their rural setups frequently and unpredictably. A common phenomenon is the large scale exodus of these people during festive seasons. All this leads to shortfalls in the manpower being provided by these agencies for the actual work on the ground. Average attendee falls down to as low as 40% during peak festive season and is around 75-80% year round. This shortage directly impacts the cleaning service levels and also puts a strain on the IFM providers as they have to divert their management resources towards basic housekeeping services rather than delivery of management services.
  • Statutory compliances: In the Indian environment, the party subcontracting services remains the principal employer and is responsible for adherence of the applicable statutory laws such as the payment of Provident Fund (PF), Employees State Insurance (ESI), payment of minimum wages, etc. Since the services are outsourced to IFMs, clients expect this responsibility be taken over by the IFM provider. The IFM provider is dependent on the housekeeping agency subcontracted for the task. While the large and established cleaning agencies pay attention to the statutory requirements, the smaller ones are not so diligent. One of the key reasons for non adherence to these requirements is the low costs that companies outsourcing this service are ready to pay. The payments are typically governed by the minimum wages and a small service charge for the cleaning agency and thus, the business is a high volume, low margin one. In this scenario, many players tend to cut corners in the statutory requirements. The IFM providers thus have to pay greater emphasis on monitoring the legal requirements, which in turn involves cost as well as management effort.
  • Management support: As the cleaning agencies grow, it has been observed that their management support structure to support the activities on the ground does not grow at the same pace. Since the agencies are usually proprietary firms, the leadership is provided by the owner and a small team. The IFM provider therefore, ends up managing the day-to-day onsite operations of the housekeeping agency.
  • Training: In view of the non availability of skilled manpower in this sector, regular offsite and on the job training is essential to ensure desired service levels. The cleaning agencies typically do not have an effective training mechanism and are dependent on the IFM provider to impart on the job training to their teams. The fresh manpower deployed to the property is usually not given any formal training, either due to non availability of staff or due to low cost of operations. The IFM provider therefore does not get the right quality of staff which in turn affects the service levels.

Way Forward

In the days ahead, the cleaning agencies will have to focus on to bond with IFM companies, as well as remain competitive in the face of international cleaning companies that are setting up shop in India:

  • Focus on core competency: Cleaning agencies will need to develop on their core competencies of cleaning and have the professionalism on their management teams as well as the task level staff. This can be achieved by inculcating the latest technologies in the market, taking greater interest in the task level work and coming up with innovative solutions for their clients.
  • Creating skilled talent pool: A dedicated training set up, along with a team of trainers for imparting on the job training will go a long way in giving the IFM agencies the confidence to outsource their cleaning services to housekeeping companies. This pool will also enable the cleaning agencies to overcome the problem of poor attendance and cater for the high attrition faced in the sector.
  • Adherence to statutory requirements: This is an area of great concern for clients as well as IFM providers as any incident of non adherence directly impacts their brand image. Thus, cleaning agencies will have to develop mechanism for adhering to these requirements and demonstrating them to the IFM providers.

With competition growing, the IFM providers will naturally seek to partner with the agencies that have the best management structure and ability to deliver to the high international standards expected. Housekeeping agencies that are able to meet up to these expectations will therefore see their business grow and be part of the India growth story.

Shujauddin Siddiqui
Soft Services Lead, CB Richard Ellis, South East Asia

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