The Impact of Outsourcing Staff in the Hotel Industry: A Literature Review

Running head: THE IMPACT OF OUTSOURCING STAFF
The impact of outsourcing staff
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Chapter 2: Literature Review
This research is based on the topic, "How outsourced staff impacts the service
standard/quality in the hotel industry". Nayak et al., (2016) stated that outsourcing is the symbol
of growth and development in the contemporary times. It is an essential part of the corporate
strategies of any kind of any kind of organizational activities in the hospitality industry. Modern
days’ hotel managed has considered outsourcing of staff as a significant part of their functioning.
This chapter will look into the researches done in hospitality management with by highlighting
on the impact of outsourcing.
According to Hussain (2016), different luxury hotels such as Marriot and Hyatt have
adopted the facilities of outsourcing. This system is important for attracting tourists on a wide
range. The authors have defined outsourcing as an arrangement that has developed in the past
years. The system of outsourcing of staff in the hotel industry has helped in annual maintenance
of contracts and other such services. This operation can be independently adopted by the hotel
industry or along with the chain properties. The advantage of outsourcing is that it affects the
quality standards of hotels. It helps in removing the responsibility of offering different job
opportunities, which leafs to additional cost for the hotels. Hyatt hotels have started their
outsourcing operation in the finance department since 2010. Outsourcing of staff from other
places must be a specialist in the similar sector, who has enough knowledge and experience
about the hotel industry. It is effective in offering better output quality than the internal staff in
terms of efficient service quality. Moreover, if outsourcing is done to another firm then the
organization gets the scope to have an upper hand in comparison to the rival companies. Labor

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erosion is not an area of tension for the hotel managers anymore as they got the solution f
outsourcing of staff.
The author, Kc (2017) served the purpose finding out about the quality standards by
gathering information from the cleaning companies. A hotel in Finland used external supplier for
their housekeeping department which helped in training the in- house staff regarding quality
control and cleaning. There lie advantages and disadvantages of outsourcing staff in the hotel
industry, which was evaluated in this research. The data was collected by interviewing the
respondents of two different cleaning companies and two different hotels. In these places, the
hotel managers and the managers of the cleaning companies were interviewed in addition to the
supervisors and the members of the cleaning department. In the course of this research,
qualitative method was used for collecting data by interviewing the individual sample. It is
important to find out that the cleaning companies are reacting to the increase in service demand
in the hotel industry. The processes and functions are undergoing major changes as a result, and
getting new contracts by gaining reputation. However, recruitment of staff, training them and
maintaining the service quality has become a barrier for the cleaning companies.
There are further researches done on the hotel industry to check the measures available
by the service provider for maintaining better quality service. It is a common practice for the
hotel industry to get over the issues of time and resources by outsourcing staff. It has a positive
impact on the working of the hotel industries. According to Mugassa (2015) the maintenance of
service quality standards is dedicated to the service providers while the tasks are being
outsourced. They also find difficulty in surpassing the customer expectation with the intention of
maintaining consumer satisfaction. This particular research was conducted by focusing on the
outsourcing services between B2B firms. The outsourcing in the cleaning business industry was

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supported and countered with different arguments. With the increasing commonality of cleaning
business to save time and money, the hotels wanted to shift their time and money on other
valuable projects. It can be stated that outsourcing is beneficial on one hand, whereas on the
other, challenging and dangerous for the service providers. The risk is posed in terms of not
having total control over the actions, as the business is outsourced. Agreement plays an
important part for smooth handling of the operations by the service providers. The key factors,
which were identified in the maintenance of quality standards in the hotel industry, include SLA
or Service Level Agreement and KPI or Key Performance Indicators. These significant factors in
the outsourcing of staff in the hotel industry were helpful in understanding the impact.
As per Zoghbi-Manrique-de-Lara, Ting-Ding & Guerra-Báez (2017), outsourcing of staff
is a fatal issue in the contemporary economy of hotel industry. In the research study, the
researcher has clearly investigated the topic to gather theoretical knowledge about the functions
of this particular business to understand its significance, impacts and the opportunities that can
be availed. The hotels nowadays, are adopting the system of outsourcing in order to provide
variety of the services to the customers and employees. They have started this practice for better
efficiency and improving their service quality. The tasks of the industry are easily sorted with the
adoption of outsourcing practice. Moreover, outsourcing of staff helps the hotel industry to gain
competitive advantage by winning over the rival hotels in the market. It is attainable as the cost
and time is controlled with this practice. This research has helped the decision makers and the
planners to get an idea about different elements of outsourcing such as improvement in
performance, reduction in cost, specialization, flexibility and the availability of innovation in the
hotel business. Most of the hotels feel the burden of adopting the practice of outsourcing as it
leads them at the edge of competition. As the hotel, industry is booming nowadays, therefore,