September 22, 2009

Not-So-Good Housekeeping

Lucine Williams, 41, worked as a housekeeper for the Hyatt hotel chain in Boston for over 20 years. She earned $15.32 an hour, plus a fairly robust benefit package that included health, dental and a 401(k). That's where Katie Johnson Chases's story begins in the Boston Globe, but it hardly ends there.

Last month Ms. Williams and her co-workers were asked to train some new workers, who were going to fill in during vacations. It turns out that these trainees were employees of Hospitality Staffing Solutions, a Georgia-based company with offices proliferating across America.

At the end of August, Hyatt laid off Lucine and 100 other housekeeping employees. They were replaced by Hospitality employees, who make $8.00 an hour with no benefits. Heck, people complain about outsourcing jobs to the third world. Now you can bring third world jobs to your workplace!

A little number crunching reveals the potential profit margins. If we assume that the benefits once paid to housekeepers at the Hyatt added about 35 per cent to the payroll, the hourly cost of labor was over $20. Hospitality Staffing pays its workers $8.00 and limits benefits to what is required by law. On their website, they say they can save companies up to 12 percent on labor costs. If you subtract 12 percent from $20, Hospitality would bill Hyatt about $17.60 per hour. That might not sound like much, but multiply it every week by a payroll for 100 housekeepers and you are talking serious savings. How that savings relates to the lives of long-time, loyal workers is another question.

Outsourcing Poverty
Hospitality Staffing presents itself as a female owned company: Kathryne King is the "owner." John King is the Chairman. All but one of the other senior staff are men. Their website features smiling, well dressed workers. One spokesperson for the company described the wages as "competitive." Competitive with what?

It's important to note that Hyatt's major competitors in the Boston area, the Hilton and Marriott chains, are not planning on using this particular cost-saving measure. They prefer to cultivate a loyal and stable staff and pay them decent wages for physically demanding work. One wonders where Hospitality Staffing finds people desperate enough to work for low wages and no benefits who can still provide an acceptable level of service to the host company.

Paul Sacco, president of the Massachusetts Lodging Association, has no problem with Hyatt's strategy. He points out that outsourcing has been going on for years at companies around the country. He says the move will save Hyatt money and will not affect the hotel guests. "If you stayed at the Hyatt last night and you bumped into the housekeeper, would you notice a difference?"

Excellent point, Paul. Guests at the Hyatt Harborside will still enjoy the amenities: the "celebrated architectural details such as an inlaid marble floor map, ornate dome ceiling and exterior lighthouse and beacon accents." Guests are not likely to spend much time worrying about Lucine Williams, an out-of-work single mother, and her 13 year old asthmatic child. They will, however, be quick to complain if the bed is not well made, if the bathroom is not spotless and if there is no bed-time mint on the pillow.

| 3 Comments

3 Comments

Sounds like Lucille could of benefited form a strong union. Thanks for sharing a little humanity today.

The US is well on its way to BECOMING a 3rd world country. This is simply another step in that direction.

I predict that not only will Hyatt not recognize the advertised savings, they will quickly find they need at least some of their housekeeping staff back. Constant employee turnover, excessive absenteeism, runaway worker's comp problems and worse are what you can expect from this staffing approach. I hope the Hyatt manager that made this decision sticks around long enough to have to clean up the mess.

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This page contains a single entry by Jon Coppelman published on September 22, 2009 11:14 AM.

Fresh Health Wonk Review and assorted news briefs from around the web was the previous entry in this blog.

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