November 20, 2009

Housekeepers, Revisited

Back in September we blogged the mass layoffs of housekeepers at the Hyatt Hotels in Boston. After unknowingly training their replacements, long-term employees were laid off, their jobs taken over by employees of a temp firm called Hospitality Staffing Solutions (HSS). Given the the low wages and marginal benefits offered the replacement workers, this solution was lacking in hospitality, to say the least.

Well, there is more to the story. As we read in an article by Steven Greenhouse in the New York Times, a study is about to be published in the American Journal of Industrial Medicine on the disproportionate rate of injuries among housekeeping staff in several hotel chains. The findings of the report were presented to the annual meeting of the American Plublic Health Association in Philadelphia.

Would it surprise you to learn that injury rates among housekeepers in the Hyatt chain are nearly double that of the Hilton Hotels? Or that injury rates for hispanic and asian workers were twice as high as those for other workers? The study focused on 50 unionized properties and examined 2,865 injuries over a three-year span. The highest injury rate for housekeepers was at the Hyatt chain, at 10.4 percent, and lowest at the Hilton chain, at 5.47 percent.

Root Causes
Let's put on our MBA hats and perform a little "causal chain" analysis. The Hyatt Hotels find themselves paying too much for workers comp coverage. The high rate of injuries among housekeepers is driving up their costs. With cost reduction as the over-riding goal, the hotel strikes a deal with HSS, outsourcing the jobs. The cost of labor acquired through HSS is certainly lower for Hyatt (even when you factor in HSS admin and profit), but HSS also assumes responsibility for any workers comp losses. It is incidental and perhaps irrelevant to Hyatt that the work is being performed at much lower wage rates and with fewer benefits. From the Hyatt perspective, the goal has been achieved: hourly labor costs have been reduced and someone else is holding the bag on the cost of injuries.

When you ask the wrong question, you often end up with dubious answers - and, in this case, a public relations nightmare. The right question, of course, is why are Hyatt housekeepers suffering injuries at twice the rate of Hilton employees? As we back up the causal chain, the MBAs at Hyatt should have zeroed in on the real issues: Are we providing the requisite orientation and training for our employees? Are supervisors focused on best ergonomic practices? How well are we managing injured workers: do we provide prompt treatment and speed return to work through modified duty?

Hyatt opted to throw out the housekeepers with the bathwater- a solution that immediately gave rise to largely unforeseen problems, the most prominent being a tongue-lashing from Massachusetts Governor Deval Patrick. In full disaster-containment mode, Hyatt has offered to continue health insurance coverage and maintain wages of laid off employees - if they agree to join the ranks of HSS. (This "loss leader" of higher wages and benefits comes to an abrupt end next spring.)

One way or another, Hyatt will ride out the PR storm, but the fundamental problem of unsafe practices among housekeepers remains. Perhaps HSS, in the midst of slashing wages and benefits, will commit to making the work and the working conditions safer. I'm not holding my breath. In the meantime, the rooms at the Hyatt will continue to appear spotless, despite the fact that no one seems to care about the people who make them that way.


| 1 Comment

1 Comment

Might this be a "case study" for Risk Mgmt. development? Sure the PR aspect is definitely higher level Chief Risk Officer/Executive RM stuff, but definitely something to be aware of. I wonder if the COO and the like even considered such a fallout.

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This page contains a single entry by Jon Coppelman published on November 20, 2009 11:57 AM.

State Rankings: Why is Massachusetts at the Top? was the previous entry in this blog.

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