The nature of contract services has changed over the years. What began as a deal on a single page signed between the housekeeping contractor and the client company has turned into a more structured partnership agreement between the service provider and the principal employer. SLAs, SOPs, janitorial count, cleaning schedule, equipment & chemicals to be deployed, the wages, etc., are all put down on paper and any kind of deviation involves penalty.
At a time when the world has moved on to KPI models (Key Performance Indicators) with quantifiable measurements, performance evaluation, balance scoreboard and benchmarking, Indian contractors are still getting into budget-based or headcount-based contracts. Quality service forms the base in either of the cases.
” Poor quality workers performing poor cleaning may create reputation issues for the client and definitely destabilise the confidence on the servicing industry.”– Sanjay Khanvilkar
It’s universal that cost controls not only the purchasing decision but also the decision of hiring competent maintenance services. Are client companies paying enough to hire quality manpower and quality cleaning aids? “If the criterion of selecting the service contractor is based on L1, as in the case of nationalised banks, the quality of cleaning will certainly not be good leading to loss of time and costs in re-work,” says Sanjay Khanvilkar, MD-Sanjay Maintenance Services, who is servicing the private sector HDFC Bank Ltd. Such contracts could harm the entire social system. Poor quality workers performing poor cleaning may create reputation issues for the client and definitely destabilise the confidence on the servicing industry.
The repercussions down the line could create a vicious cycle where the victim of low bid contract, ‘the worker’, reliant on minimum wages and statutory benefits gets deprived of a support system and is forced to jump jobs. In the bargain, probably, his children would have to rely on free-school meals and other kinds of benefits. This is unending… But, where does all this begin?
There are probably two beginnings to this issue – one at the client end and another at the service provider’s end. Contractors are very well aware that getting into such low-budget deals would entail low margins or even a zero-profit, yet they go for such contracts. “If you look at the housekeeping companies taking up such contracts, you will not find big names in it. It is mostly the small time players from the unorganised sector who bid for low-budget contracts,” says Sanjay Khanvilkar. Can there be a radical approach to this where collectively all contractors can agree to boycott such tenders? “If not collectively, at least companies who believe in standard performance should not get into such tenders.”
Such contracts entail cheaper quotes and complaints when something doesn’t work properly or the standard isn’t up to the prices being paid, which is supposed to cover costs. At the end of the day, ‘most economical tenders’, ‘low-budget contracts’, ‘zero-profit quotes’, ‘limited margin contract’… Whatever name you give it, are just that. Then why take up such contracts?
” Being the principal employer, the client company will be penalised by the government for non-compliance and not the service provider who has engaged illegal means to withhold statutory benefits to workers.” –Pradeep Mehra
Another grave concern with such contracts is that are the workers getting paid minimum wages and the statutory benefits? Banks have claimed to ensure that salary proofs are collected from the service provider before releasing the next payment. “There is large scale malpractice, especially where statutory benefits are concerned,” laments Pradeep Mehra, CEO & Managing Director of Walsons HR Solutions Pvt. Ltd and a staunch advocate of statutory compliances. “Even though the principal employer is getting the proof of salary, he could be oblivious of the fact that the worker is actually not getting the benefits at all.
Having said so, I would also like to bring to light that being the principal employer the client company will be penalized by the government for non-compliance and not the service provider who has engaged illegal means to withhold statutory benefits to workers. The reason for the service provider to engage in such practices is because he has to see that both ends meet and in low budget cases he is simply not able to do so,” explains Mehra.
The other issue originating from the client end is the demand for international standards at Indian rates! Well-groomed and trained workforce for housekeeping services are always in demand not just in the banking sector but in all sectors. Services engaged on the minimum wage basis limits the service provider to engage workers from within the vicinity of the contract site. Such workers do not either perform on site due to lack of proper training or quit the job in search for better jobs. No wonder this industry has a high worker turnover. Besides, while the clients demand for trained workers, are they ready to pay for “such professional services”?
In the private and international banking sector, “clients understand quality services and the SLAs are drawn accordingly”. In such banks, the workers not only receive training on site but also receive professional training on the right use of equipment, tools, chemicals and on etiquettes.
It is time that the banking sector which is increasingly looking at outsourcing cleaning services decides whether they want to play ignorant and go about with limited budget contract or do they actually want quality cleaning which involves performance based costs. On the other hand, if the housekeeping companies want to get better by taking up only best contracts where best practices are honoured, it’s time they refrain from low-budget contracts. L1, today is more a bane where both the service provider and the client stand to lose.
Clean India Journal speaks to a couple of private and nationalised banks to understand their approach towards cleaning, costs and contractors.