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Outsourcing Services Getting the Most for Your Community’s Dollar

Outsourcing Services

In the perennial struggle to control costs while still adequately maintaining a building or HOA’s physical plant, grounds, and other day-to-day business, some boards and managers are opting to hire superintendents, custodians, and other staff on a temporary, as-needed basis, or to partner up with neighboring associations to share one super or groundskeeper between them. 

In other words, some of the jobs are being outsourced from full-time staffers to contracted companies. In today’s world, ‘outsourced’ is a loaded word, associated with jobs that are outsourced from the United States to foreign countries. When it comes to the tasks surrounding the operation of a co-op or condo, however, the concept is a bit different. 

A Growing Trend? 

“Full-time superintendent positions are now being transformed into part-time porter positions, with the option of handyman services a la carte,” says Rolando Velazco of Clean Habitat Inc. - Building Maintenance and Handyman Services, a New York City company that provides an array of support services, including common area cleaning, trash and supply management, exterior grounds maintenance, garden watering, and garage maintenance. “By doing so, properties save on hours not being utilized by the superintendent, and instead put those funds into necessary focused improvements around the property. In the long-run, this transitions to time and money saved, without sacrificing any service goals.” 

Task Masters United in Brooklyn, New York, provides superintendent services as well, including maintenance, management and repair. CEO Ray Smith lists many benefits of outsourcing, including not having to hire employees, acquire (and pay rent on) office space, or even pay for an employee’s sick days or vacation time. 

“However, a full-time staff should be considered for residential units with 35-40 units and above,” he says. “Full-time service will ensure that trash and recycling areas are getting the necessary care and attention needed for sanitary reasons.”

Smith also explains that his firm supplies any equipment and tools necessary to do other jobs in the building and that he has a full-time staff who are available 24/7. “If you only have one super and he calls out sick, you don’t have anyone to back him up, but if that happens to us, we have a backup,” he said. 

Velazco cites another benefit of outsourcing as having more control over the building’s costs and tasks. Money is actually one of the biggest reasons why any business outsources certain jobs to another company.  

“For example, hiring a handyman for a few hours to replace a light fixture makes more financial sense than employing a full-time super and incorporating handyman costs that might not be utilized on a daily basis,” he said. 

Smith is also willing to admit that there are a few drawbacks to bringing in another contracting company. “We are contracted to do certain things, but if there are other responsibilities, those would cost extra,” he says, adding that some boards only hire some of his services, such as lawn maintenance or snow removal. “Many times the buildings have supers who are licensed plumbers and electricians, but we don’t do in-wall plumbing and we’re not electricians,” he said. 

On the other hand, John D. Cadiz, the director of operations and human resources at Premier Property Solutions in Boston, Massachusetts, says that the final decision for a building to outsource can come down to — stop me if you’ve heard this before — the money.  “I could talk to you about resources, resource allocation and the variety of condo associations out there, but let’s be real: this is about money,” he says. 

Cadiz continues, “A 12-unit building in an affluent community has the money to pay someone to open the door for them when they get home. This is not typical of a twelve-unit building in a blue collar-community whose budget is closer to the bone. When you are working with complexes of a hundred or more units, you start to see more of a need, the larger the complex is, for a more permanent or regular presence on site.”

For example, one building might be paying John Smith $50,000 to do the job, but the Jones Janitorial Company can be hired to do the same job at $60,000 a year. In this fictional case, the building’s costs have increased $10,000 per year. Why bother? If the board is getting a company that does more than what John does, or they also are saving money by not having to pay John’s benefit plan or other perks, the board might make a financially sound decision. The details have to be evaluated before deciding if outsourcing is a worthy decision.

Another potential drawback could be security issues. Let’s say that in a smaller building, Mr. Doorman accepts packages, signs in guests and, like the bartender in “Cheers,” knows everyone by name. Mr. Doorman’s salary is pretty nice, but in today’s world where the costs of capital improvement projects are going up and the economic struggles of the residents are visible, the board is looking to save some cash for a rainy day. The roof has to be fixed and, to be honest, Mr. Doorman doesn’t really accept that many packages or sign in that many guests anymore anyway. The board decides to hire an outside firm to do Mr. Doorman’s job on a part-time basis.

“Your bigger concern should be the potential loss of the employee and all of the institutional knowledge that they have gathered over the years in providing the building its services. The employee has their own budget to consider and a reduction in hours could be the difference in their ability to make ends meet or press them to obtain other employment,” says Cadiz.

Decisions, Decisions

While the association’s bylaws state that it’s the board who is allowed to make changes to the staff and outsource jobs, the residents should still be surveyed. 

“All condo documents are not created equal, and it is the responsibility of unit owners and trustees to be familiar with their documents. Unfortunately, most are not — and tragically, until an issue arises where they want their voice to be heard, many owners do not participate in the process,” says Cadiz.

He adds that when considering making changes to staff hours or outsourcing jobs, you should consider what the lack of a routine could result in. 

“While this may appear to be a cost savings approach, especially for smaller associations that don’t need a lot of attention, I would compare it to going to the gym ‘as-needed.’ You’re going to feel good about what you’ve done in the moment but results are going to be negligible and things will quickly fall to the side of bad habits. Creating a consistent routine will provide more stability and value to the services and your property,” he says.

Check Them Out

When it comes to quality service, you want to hire good, trustworthy employees. When a job is being outsourced, the board should also want to do the same, which means doing some due diligence on the contracted company. This is important because employees from the outsourced company will have access to the residents’ units as well as access to private information, packages and building systems. 

“If there is a need, there is a service out there for it. If not, someone will create the service for you. You could approach a large agency like Adecco, a smaller franchise like Express Employment Professionals or even a local Boston specialist like The Resource Connection and they can customize a service offering to meet your needs. I would discourage an association from making a direct hire without the support of, at minimum, a staffing agency to handle the human resources aspects of the complicated world of employment labor law,” says Cadiz.

He adds, “I will shamelessly plug the use of professional property management organizations for a shared-employee situation. They are in a much better position to work out a distributed billing process that would charge you for the actually-used resources versus the perceived sharing, and avoid conflicts for perceived inequities that could sour the relationship between neighbors. They also have the ability to manage the employee through a professional employer organization to provide all legal compliance.”

“We also provide a certificate of insurance, but we do our own background checks,” says Smith. “That’s for us and we don’t provide that to anyone unless it’s needed or asked for. We also have the necessary licenses necessary to show anyone, such as the sprinkler standpipe certification.”

Once the company is hired, the shift of chain of command within the community’s administrators might change. “Ultimately, the building is the employer, whether they hire a maintenance company directly, or if the management company is outsourcing,” says Velazco. “The building is the client, and they will communicate their needs directly.”

He adds that his staff reports to the property manager. “If there is no property manager, we work directly with the board and usually we work with both,” he says. “If there is neither, we work with the owner.”

Hiring a company to do a job doesn’t mean being stuck with that company, either. If it’s not working out, they can get ‘fired’ just like a regular employee. “We give our clients a one-year contract and then an option of 30 days if they want to cancel the contract,” says Velazco.  

Outsourcing jobs or creating part-time positions out of full-time ones doesn’t have to be a permanent situation. Boards can hire contracting companies to do some of the staff jobs and see if it works for them. They can also do it to save money temporarily and then bring someone full time at a later date. It will also give the board or management company the ability to take their time and hire someone while the jobs are still getting done. 

Considering whether to hire an outside company or keep the jobs in-house is really an individual decision and depends on the building’s needs and budget.          

Lisa Iannucci is a freelance writer and a frequent contributor to New England Condominium. Staff writer John Zurz also contributed to this article.

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