A study of the impact of outsourcing services to contractors on residents' satisfaction in private residential estates in Hong Kong

Abstract

The study presents an analysis of residents’ satisfaction regarding property management services provided by property management companies and the relationship between residents’ satisfaction level and the degree of outsourcing of property management services. The study aims to find out the relationship between the degree of outsourcing of the routine operational and maintenance services to contractors and the residents’ satisfaction level regarding the property management services provided by the building manager in private residential estates as well as the reason behind. According to literature, it is found that the degree of outsourcing of property management services may negatively affect the residents’ satisfaction regarding property management services provided by the property management companies. Literature also suggested that the degree of outsourcing of property management services would lead to a lower level of control of frontline staff by the on-site management staff in the property, and this would lead to a decrease in service level. To obtain relevant data for analyzation, a survey of 113 residents living in private residential estates in Tsuen Wan District were conducted. The study attempts to measure residents’ satisfaction level regarding overall and each type of property management services provided by building manager. Also, residents’ view regarding to the control and monitoring of frontline staff by on-site management staff were also collected. The results reveal that generally the residents’ satisfaction level would decrease with the increase in degree of outsourcing of property management services. It is also found that the control and monitoring of frontline staff providing property management services by on-site management staff be negatively affected by the high degree of outsourcing of property management services in the selected private residential estates. However, as some of the results are not in line with the expectation of the study, it is believed that besides the degree of outsourcing of property management services as well as the control of frontline property management staff, there shall be other factors that affect the perceived services level of residents regarding property management services in private residential estates. According to the result of the study, it is suggested that property management companies shall keep as many as the frontline staff in-house if financially and technically available in order to maintain a higher level of control of staff. However, it is well-known in the industry that outsourcing had also been regarded as a “necessary evil”, under such circumstance, it is suggested that property management companies should establish a comprehensive control system to control and monitor the performance of outsourced contractors and service providers.