An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
1
ABSTRACT
With having a household help as an accepted practice in Philippine
culture, the proponents studied the factors that influence a household to
accept domestic outsourcing.
This study aims to identify and analyze the
factors that affect household service consumption or availing housekeeping
services. There have not been current studies regarding domestic outsourcing
in the Philippine setting so new hypotheses were derived from focus groups
discussions and survey. Data collected from the survey were from 185
households in Makati City – with no assumption that the household may or
may not have a household help. In analyzing the data, multiple regression,
particularly the forward stepwise method was used to identify the relationship
between the income, demographics, marketing stimuli and decision-making
process (independent variables) and purchase timing and amount (dependent
variable). Frequency distribution tables and graphs showed that respondents
are more attracted to domestic outsourcing through referral because of trust
issues and the risk involved in having a complete stranger in their home.
Although hiring through an agency might cost more for the respondents they
believe that well trained household help from these agencies are an
advantage. By identifying these factors, the researchers believe that the study
will be of help to the Small and Medium Enterprises (SME) whose business
revolves on domestic outsourcing considering that they will now be able to
evaluate what to improve in their business operations to be able to attract
their target market effectively.
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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BACKGROUND OF THE STUDY
In consideration of the Filipino service consumption, informal
domestic outsourcing or hiring maids commonly known as “yayas” or
“manangs” are common in Filipino households. Not to mention, numerous
Filipinos leave the country to become domestic helpers abroad. However,
there is also formal domestic outsourcing available that are offered by
agencies to both residential and commercial groups. This is more common
abroad, specifically western countries where hiring a maid is not as easy and
affordable as it is in the Philippines. Moreover, services offered (typically
general house cleaning) by agency maids in western countries, as we know,
are not nearly as all-around or demanding as the maids in the Philippines who
are actually on-call 24/7.
In the country, more often than not, these cleaning agencies cater to
commercial groups. Examples are hotels and hospitals that subcontract
cleaning or janitorial services to such agencies. Domestic outsourcing offered
by agencies for households or residential groups on the contrary is quite
sparse. In general, the domestic outsourcing industry in the Philippines is not
yet apparent and perhaps is more a commercial than a residential arena.
Hence, offering formal domestic outsourcing to household residents is a
venture that our group would like to explore. To be able to get data for this
study that would be reliable and given its prestigious reputation of housing
the rich, we chose to limit the study to Makati City residents. This would
enable us to see if there are residents who prefer or would prefer to avail of
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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domestic outsourcing offered by agencies than the informal domestic
outsourcing, thus representing a potential market for such kind of venture.
STATEMENT OF THE RESEARCH PROBLEM
What are the factors that affect the willingness of Makati residents to accept
domestic outsourcing?
STATEMENT OF RESEARCH OBJECTIVES
GENERAL
To determine the factors that affect the willingness of Makati residents to
accept domestic outsourcing
SPECIFIC
The study specifically aims to:
1. Describe the profile of the Makati residents that are potential clients
1.1. Gender
1.2. Age
1.3. Number of Household Members
1.4. Income
1.5. Marital Status
1.6. Number of Dependents
1.7. Household management preferences
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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2. Describe the hiring preferences – through referrals or agency - of the
potential clients.
3. Analyze the relationship of the factors affecting Makati residents’ to accept
domestic outsourcing
SCOPE AND LIMITATIONS
This study is limited to the residents of Makati City. From this point, the
group will describe and analyze the consumer profile and preferences of the
said residents on domestic outsourcing.
SIGNIFICANCE OF THE STUDY
Household Services Providers
This study aims to describe and analyze the factors that affect
domestic outsourcing that will serve as a major contribution to Small and
Medium Enterprises (SME) whose business line involves housekeeping
services. Household services providers may gain knowledge of the
characteristics of their potential clients with regard to domestic outsourcing in
order to determine their needs. This will also provide them with means of
gaining competitive advantage through an improved customer service upon
quantitative and qualitative representation of Makati residents’ domestic
outsourcing preferences.
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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REVIEW OF RELATED LITERATURE
I. Consumer Behavior
A.
Definition
1.
General
Consumer behavior as defined by Dr. Lars Perner, Ph.D. is “The
psychology of how consumers think, feel, reason, and select between
different alternatives; how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media)...while shopping.” In
terms of marketing, these factors are considered when launching or
introducing a new product or service because they will have to capture
the interest of the various market segments. By evaluating and assessing
the various factors in the market (e.g demographics), companies and
organizations will be able to determine what marketing strategies they
need to implement.
As cited in Exploratory consumer buying behavior: Conceptualization
and Measurement (1995), strong exploratory consumer behaviours
include:
“Risk
taking
innovativeness in the
in
making
product
choices
(Cox,
1967),
adoption of new products and retail facilities
(Mittelstaedt et al., 1976; Venkatraman
and Price, 1990), variety
seeking in purchase behavior (McAlister and Pessemier, 1982),
browsing, looking at window displays and similar forms of recreational
shopping
(Bellenger and Korgaonkar, 1980; Westbrook and Black,
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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1985), and curiosity-motivated information acquisition evidenced in
leafing through catalogues or talking to others about purchases
(Hirschman, 1980; Price and Ridgway, 1982).”
These behaviours have the tendency to encourage the consumer to
purchase certain products; relief themselves of boredom; find
entertainment; and satisfy their curiosity and desire for knowledge
(Howard and Sheth, 1969; Venkatesan: 1973 Baumgartner & Steenkamp,
1995).
There are two dimensions considered in consumer behaviour that
are Exploratory acquisition of products (EAP) and Exploratory
information seeking (EIS). The former leads to the stimulation of risky
and innovative product purchasing while the latter “satisfies consumers'
cognitive stimulation needs through the acquisition of consumption
relevant knowledge out of curiosity.” (Baumgartner & Steenkamp,
1995).
2. Specific
Higher educated people are more likely to have greater various
exploratory consumer behaviour than less educated individuals because
of their these behaviours are more demanding – needs more processing
of new and complex information related to new products and services
(Capon & Burke, 1980; Steenkamp & Burgess, 2002). Aside from the
education of individuals the factor affecting consumer behaviour is
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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marital status should also be considered. Single or divorced individuals
show lower on exploratory purchase behaviours than that off married or
live-in people. This might be the case for the former because of time
pressure; like doing household chores alone.
B. Consumer Buying Behavior
Consumer buying behavior is defined as the study of how and
why people purchase goods and services. The various influences on, and the
process of, the buying decision are represented in and explained by models of
consumer buying behavior specifically the Black box model (Figure 1) of
consumer buying behavior. (Kotler et al, 2004 as cited in Consumer Buying
Behavior, n.d.)
Source: Keegan et al. (1992, p. 193) [As cited in Consumer Buying Behavior (n.d)]
Figure 1. Black Box Model of Consumer Buying Behavior
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Marketing Stimuli (The 4 Ps of Marketing)
Nowadays, marketing has been very convenient for companies with
the help of technology and marketing tools and many other different and
creative ways to reach the audience being targeted. The right way to
maximize the ways of marketing products is the right combination of both old
and new strategies, say, the use of brochures and flyers and the use of
websites to promote online. The marketing mix is the key to effectively
capturing the target market’s interest (Delaney, 2007).
Farrall & Lindsley (2009) explains that the marketing stimuli or
more often known as marketing mix consists of four components that are vital
to marketing a brand. These components, usually called 4P’s are as follows:
Product (or service). It is the range and variety of products being
sold or services being offered. This determines the main nature or line of
business a company is in. The key considerations for this component are
quality (how good a product is), branding (identifying label), and reputation
(image of the item as perceived by the consumers). A product is also the good
or service that satisfies a consumer’s need. There are four types of consumer
products: (1) convenience, (2) shopping, (3) specialty, and (4) unsought. Each
type is based on the way people buy products. Convenience products are
products a consumer needs but spends little effort or time acquiring them.
They are bought often and regularly (i.e. staple), unplanned or quickly (i.e.
impulse product), and immediately (i.e. emergency product). Shopping
products are products that a consumer spends quite some time and effort to
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Outsourcing
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compare with competing products; it’s based on quality, features and price
(i.e. heterogeneous and homogeneous products). Specialty products are those
that consumers really want that they are willing to take the time and effort to
look for it. Unsought products are those that consumers are not really aware
of the need of the product. This type of product needs to be heavily promoted
because the consumer is yet to recognize a need for that certain product
(Perreault & McCarthy, 2005).
Price. This component determines the cost of the product and the
seller’s corresponding profit. It is concerned with the amount that a consumer
is willing to pay for a certain product while considering the production cost. It
also considers the prices of competing producers and consumer’s reaction to
possible prices (Perreault & McCarthy, 2005).
Place. This primary refers to the location where the product is being
distributed and/or accessible to the customers. It is important to consider the
distribution area because producers would want to make their products
readily available to when and where their target market wants it to be
(Perreault & McCarthy, 2005).
Promotion. How the product is communicated to potential customers
or the target market is the primary concern of this component. Promotional
tools serve as the medium for advertising the products or services offered by
the company. This component is focused on acquiring new consumers while
retaining current consumers.
Promotion includes personal selling, mass
selling and sales promotion (Perreault & McCarthy, 2005).
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Outsourcing
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Aside from these components, Farrall & Linsley (2009) also
consider other Ps such as people (employees or staff of the company),
physical presence (the appearance of the shop), process (production and
distribution of the product), and physical evidence (the tangible aspect of the
product).
The balance of these components is the focal point of a successful
marketing strategy to reach the audience and potential buyers.
The Decision Process
The most recognized traditional theoretical framework for the
decision process is by Engel, Blackwell, and Miniard (as cited in Zhang and
Zhang, 2007). The model consists of five stages, which are: (1) Need
recognition, (2) Information search, (3) Alternative evaluation, (4) Purchase
Decision, and (5) Post-purchase behavior. Figure 2 below illustrates this.
Schiffman and Kanuk (2007), specifically identify the first three stages as the
act of making a consumer decision.
Figure 2.: Five-stage decision process
NEED RECOGNITION
INFORMATION SEARCH
ALTERNATIVE EVALUATION
PURCHASE DECISION
POST-PURCHASE BEHAVIOR
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Need Recognition
Lamb, Hair and McDaniel (2005) defined need recognition as a result
of an imbalance between actual and desired states. It is triggered by exposure
to an internal or an external stimulus. The latter may refer to actual products,
advertisements, etc. while the former are normal needs strong enough to drive
behavior such as hunger and thirst. However, marketing managers can also
create wants. Schiffman and Kanuk recognize two different styles in need or
problem recognition. First, the actual state types perceive that the current
product is not working properly. Second, desired state types become aware
that superior products exist.
Information search
Consumers actively search for information upon recognizing a
need or want. There are two types of information search: (1) internal
information search and (2) external information search. The first refers to the
process of recalling past information stored in the memory primarily past
experience with the product. In contrast, the second refers to the process of
seeking information in the outside environment. Externally searching for
information involves two types namely, nonmarketing-controlled information
source and the marketing-controlled information source. A product
information source that is obtained through personal sources, experiential,
and public sources is considered as a nonmarketing-controlled information
source. However, if a product information source is associated with
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
Outsourcing
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advertisement or promotion, then it is deemed a marketing-controlled
information source. The perceived risk, knowledge, prior experience, and
level of interest in a good or service affect the extent of an individual’s
external information search. (Lamb et al., 2005) .
Alternative evaluation and purchase decision
Consumer’s tend to utilize two types of information: (1) a “list”
of brands (models or attributes) considered in making a purchase known as
the evoked or consideration set and (2) the evaluation criteria. The evoked
set includes the small number of brands the consumer is familiar with,
remembers and finds acceptable. Criteria used to evaluate evoked sets are
commonly expressed in terms of product attributes. (Schiffman and Kanuk,
2007) Following evaluation of alternatives a consumer decides to purchase or
not to at all.
A purchase decision is influenced by marketing variables, observed
and unobserved household characteristics, and the time elapsed since the last
purchase. An example of such a characteristic of a household is its rate of
consumption of the product (Jain & Vilcassim, 1991).
Post-purchase behavior
Consumers when buying a product or service have certain
expectations. Satisfaction from the purchase depends on how well these
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expectations are met. Furthermore, consumers reduce lingering doubts about
the purchase by justifying the purchase decision. (Lamb et al., 2005)
Categories that Affect the Consumer Buying Decision Process
According to B Berkowitz et al, the three factors that affect the
consumer buying are: (1) Personal; (2) Psychological and (3) Social.
Personal factors entails demographic aspect such sex, age, race,
etc. Each individual has their own desires and wants to be satisfied so their
purchasing decision would be different (i.e. a younger woman would have a
different need from an older man).
Psychological factors include: motives, perception, ability and
knowledge, attitude, personality and lifestyles. According to Webster’s
Universal College Dictionary (2001), motive is “something that causes a
person to act in a certain way… the goal or object of a person’s actions”. One
has to understand why consumers purchase a certain product – is it for safety
reasons or is to fulfill a sense of belonging. Either way, each person has their
own different motives or it is up to the producers to analyze that. Perception
entails the consumer’s understanding or processing of certain information.
Based on what they know and what they feel, any information presented to
them will be criticized by their own standards. Ability and knowledge
involves the consumers’ capacity to learn about the product. Sellers must
inform buyers about the features of their product because they might not be
aware on how to utilize it and also they must be weary of prices because
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some people perceive that an expensive product has great quality and it is not
necessarily that way. Attitudes and personality are formed by the
environment. A bad experience might cause a consumer to purchase the
competitor’s product and a personal indifference might be presented to that
company. Lifestyles depend on an individual’s personal beliefs and traits.
When producers observe a growing lifestyle (i.e. healthier living) this will
drive them to come up with products that would fit this new trend of healthy
living. Kotler et al. (2004) identify psychological factors influencing
consumer buying behavior to include perception, motivation, learning, beliefs
and attitudes, and personality and self-concept. (As cited in Consumer Buying
Behavior, n.d.)
Social factors include opinion leaders (spokesperson), roles and
family influences, reference groups, social class and culture/sub-culture.
Opinion leaders are also known as endorsers, most of them are individuals
who are popular and have a credible reputation. By having someone popular
and credible endorsing the product, it is perceive that the product is credible
as well. A popular figure would attract consumers and will get them curious
about the product, which will hopefully lead them to purchasing it. Roles and
family influences embody an individual’s role in the family unit. In acquiring
a nanny service, it is usually the mother and not the brother or sister that gets
to decide which nanny would best suit the needs of the baby. Not to mention
if the family is not used to having a nanny, a family might as well disregard
the thought of hiring someone to take care of their child. Reference groups
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include families, friends, civic organizations, or any group of people that an
individual identifies with. These groups affect the consumer in a way that
there is a sense of belongingness or approval if a certain product or good is
purchased. Social class influences the consumer because a certain product is
perceived to embody them. Social class includes occupation, education,
income, race and assets. Upper social classes tend to buy more expensive and
great quality products while the lower class tends buy those that they can only
afford. Culture and sub-culture varies and is so diverse that certain products
that might be acceptable to some might not be acceptable to others. Culture
involves certain values and beliefs that determine what people wear, what
they eat and how they live their lives.
Kotler et al. (2004) also identify social and cutural factors
influencing consumer buying behavior, which are culture and sub-culture,
social class, household types, reference groups, and roles and status. (As cited
in Consumer Buying Behavior, n.d.)
The family life-cycle provides us with an understanding of family
purchasing behavior and their individual roles as illustrated in Table 1. below:
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Table 1. Traditional Family Life Cycle
Source: Evans and Berman (1992, p. 146) [As cited in Consumer Buying Behavior, n.d.]
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Consumer Buying Decisions and Consumer Involvement
The level of consumer involvement is a significant consideration
in identifying the types of consumer buying decisions. Involvement is the
amount of time and effort a buyer invests in the decision-process. Decisionmaking behavior exhibited by consumers buying frequently purchased, lowcost goods and services is routine response behavior. This type requires little
search and decision time. Consumers that require moderate time to gather
information and deliberate among known and unfamiliar product (or service)
is classified as limited decision making. Lastly, consumers practice extensive
decision making when buying unfamiliar, expensive product or an
infrequently bought item. The factors determining the level of consumer
involvement are previous experience, interest, perceived risk (financial risk,
social risk and psychological risk), situation, and social visibility. (Lamb et
al., 2005)
Purchase behavior is an output portion of the consumer decisionmaking model and consists of three types: trial purchases, repeat purchases,
long-term commitment purchases. The first is an exploratory phase in which a
consumer buys for the first time in small quantities than usual. Consumers are
likely to repeat purchase when satisfied on initial purchase. For more durable
goods commitment to long-term use is more likely. (Schiffman and Kanuk,
2007)
Time availability for domestic production is now subject to time
constraints from work. (Tijdens, Van der Lippe and de Ruijter, 2003).
An Industry Study of the Factors Affecting Makati Residents’ Willingness to Accept Domestic
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Zick, McCullough and Smith (1996) examined the influence of
marital status (time constraints) on the demand for services using the
household production model on data collected from the 1987-1988 Utah Time
Use Study. Their research concluded that families headed by single mothers
were more likely to purchase housekeeping services than their two-parent
counterparts holding income and other factors constant.
II. Housekeeping Services
A. Outsourcing
Bittman, Matheson and Meagher (1999) define outsourcing as
substituting market goods for one’s own labor. (As cited in de Ruijter, Treas,
& Cohen, 2005). Outsourced alternatives are produced in the industrial and
service sector. (de Ruijter, Treas, & Cohen, 2005). In particular the process of
replacing unpaid household productive activities (i.e. child care, cooking,
cleaning, laundry, gardening, paying bills and shopping) with market
substitutes is known as ‘domestic outsourcing’. Domestic outsourcing takes
various forms which includes domestic cleaning among others. (Bittman,
Matheson and Meagher, 1998).
1. Hotel
To add value to customer service, risky activities where some are
considered as non-core functions tend to be outsourced through personnel
hired from agencies. Hotels usually conduct outsourcing decisions
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considering the need, management and accounting information supported
decisions, outsourcing management systems, and long term oriented agenda.
In terms of finance, the benefit of outsourcing is its lower cost
compared to the other services that the company provides (i.e. food services).
Having an external contractor will ensure efficiency and expert service of the
specific service that company outsourced. (Kee & Matherly, 1996).
According to Kee & Matherly (1996), “A key aspect of any
outsourcing decision involves determining the cost of a service's operations.
The analysis of a service's cost must consider the cost incurred by the service
itself, as well as the costs incurred by otherdepartments that support its
operations.”
Housekeepers are responsible for routinely cleaning common areas,
units, large and small facilities, and other deep-cleaning tasks. According to
the model used, the number of working hours of a housekeeper will depend
on the projects’ number of units. To be able to budget the number of working
hours needed, a factor of 0.8 hours per unit is considered. Housekeepers;
wages is often similar to that of universal workers. The said wage is
comparable to those of common assisted living facilities, nurses, and motels.
2. Household
Understanding population growth is relevant but the more
important factor when it comes to analyzing housing demand is household
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growth. A household is defined as “all the people who live in a self-contained
dwelling unit whereas the residents may or may not be related.” As household
grows, the demand for certain needs also increases. For some age brackets
such as that of the elders, assisted living is necessary. Residentiality or
personal care not on the context of the medical but on the social model is
emphasized for providing a home-like environment not in institutional
environments. The concept also pertains to providing assistance to daily
living if needed (Vista Senior Living Inc., 2006).
Cohen (1998) uses the term ‘housework services’ to refer to
housekeeping and meals out, which are two housework-related service
expenditures he investigates. The former includes maid service in
condominiums.
Households choose the production alternative that maximizes
utility. The relative costs of own household labor and outsourcing are
weighed. The disadvantages include various types of risks. First the supplier
may not be competent enough depending on the degree of uncertainty
associated with the transaction. Second, the dependency of the buyer from the
supplier may create investments that are only specific to their relationship.
Lastly the supplier may behave opportunistically upon discovery of valuable
assets. (De Ruijter, 2001; De Ruijter & Weesie, n.d).
A case study on the household service agency “Helping Hands
Housekeeping” (HHH) by Mendez (1998) explored the difference between
the “traditional” and more rationalized domestic employment arrangements
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and their advantages and disadvantages over the other. The study focuses on
whether the more rationalized or “modern” domestic employment
arrangements provide better work conditions -specifically the exploitation
aspect- to employees. Details regarding the operation, marketing, employeeempowerment and customer-care aspects of HHH were also substantially
presented.
3. Supplier
Atoji (2007) started the list on cleaning services.
Typical
cleaning services include sweeping, dusting, waxing, mopping and tidying up
home appliances and the bathroom. Cleaning fees generally range from $75
to $150 per property. Aside from being of service to households of typically
dual-earners, this business can also cater to commercial properties such as
small to medium scale workplaces. Advertising can also be done through
classified ad websites that offer free advertising such as Craigslist.org. In
response to building connections and gaining clients, attending local chapter
meetings (or even joining service exhibits) can be of significant help. As a
start up for such a business, items needed, at the very least, are a mop, a pair
of broom and dustpan, an all purpose cleaning kit (i.e., cleaning cloth,
disinfectant) and a feather duster which’s total is less than $100. The other 4
on the list are catering, elder care, personal organizer and virtual assistant.
The number of homes, apartments and condominiums in the U.S.
translated to the potential number of customers that can avail of house
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cleaning services. Steve Jolly, who opened a housecleaning service business
in September 2000 was only aiming for 100 customers for the whole first
year of the business. By the first semester however, they already have over
200 customers, with some even wait listed. The company employs 8 cleaners,
working on teams of 2 cleaners each. A team of 2 cleans has around 4
customers or rather houses to clean each day. Each employee is paid $8.50
per hour which is higher than the regular pay. The average charge for a
service is around $90, which caters to 3200 sq. ft. homes located in the
uptown area. $75 is the minimum charge for the regular household cleaning
service and $50 is charged for cleaning services limited to the bathroom
alone.
All cleaning materials are provided by the company to offer the
same assured quality of cleaning outcomes. These include, mops, a glass
cleaner, vacuum, disinfectants, cleaning cloths and a furniture polish.
Aside from the typical cleaning services, the company also
subcontracts other companies for services that the customers need but the
company does not directly provide such as extensive carpet cleaning.
Through these arrangements and referrals, the company earns an extra $50
each time. Jolly states that housecleaning a profitable business provided that
you have excellent employees and customers are satisfied with the service
(Rathey, 2006).
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4.Philippine Setting
According to Chapter 3 Article 141 of the Labor Code of the
Philippines, domestic or household service is defined as “service in the
employer's home which is usually necessary or desirable for the maintenance
and enjoyment thereof and includes ministering to the personal comfort and
convenience of the members of the employer's household.” Domestic helpers
include cooks, nannies (yaya), drivers and all-around helpers.
In the Philippine culture, having a household help has been an
accepted practice, dating from the Philippine’s Pre-Spanish era of slavery.
Our ancestors considered two kinds of household help or slaves: “aliping
namamahay (domestic slaves who can own property) and aliping sagigilid
(domestic slaves who are household property)”; slaves were either captives of
war or in debt to another tribe. During the Spanish era, under the notion of
obras pias (works of piety), Filipino women were enlisted as servants for
government officials and domestic helpers for clergymen. Up until the PostSpanish era where the elite class in urban and rural (hacienda) areas acquire
household help, the rise of urban cities and busy work life and lifestyle (i.e.
both spouses work to maintain/attain chosen lifestyle) has rendered middle
and lower classes to obtain household help (Visayan Forum Foundation Inc.,
2008).
As of 2004, there are an estimated 600,000 to 2.5 million
household workers in the Philippines. Based on the 2002 NSO Labor Force
Survey, 92 % of these household workers are female. Female domestic
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workers have duties or jobs ranging from cooks to nannies to all-around help
while males are preferred for driving jobs. These household workers are
recruited by either formal or informal way, with the latter more utilized in the
local setting. Compensation (i.e. minimum wage) for the household help
varies from the place of employment: in Metro Manila and highly urbanized
cities the minimum wage is Php 800 while it is Php 650 – 500 in other
chartered cities (Analysis of the Situation of Filipino Domestic Workers,
2004).
Households
are
grouped
into
four
(4)
socio-economic
classifications (See Appendix A). Those belonging to the top socio-economic
classifications are Class AB and Class C. Highest in the classification list is
the upper class which is comprised of Classes A and B - households (may be
owned or rented) of the rich and famous who are living extravagant lifestyles.
Generally, these houses are well built, highly durable and typically large in
terms of area, have at least 2 household helpers or maids, has at least 2 cars
and an air condition unit/s. Condominiums and townhouses that are located in
prestigious locations also belong to this classification. The upper class is also
further classified into 3 subgroups: Class AAA are households with an
average total monthly income of at least P300,000, those that belong to class
A/AA have an average total monthly income of P150,001- P300,000 while
class B residents have
an average total monthly income of P100,001-
P150,000. With these incomes, breadwinners of these houses generally have
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impressive occupations such as medium to big scale businessman, top/senior
executives and established professionals like lawyers, doctors and engineers.
The second group comprises the Class C households. Class C is
divided into 2 subgroups namely Class C1 and Class C2. Class C1 is made up
of upper to medium class households with an average total monthly income
of P50,001 – P100,000. They live comfortably and enjoy occasional luxuries.
These houses are typically duplex-type with a car, an air condition unit and
employ 1-2 household helpers. Class C1 breadwinners are usually employed
as technical/professional white collar workers in supervisory and clerical
grade positions. Class C2 households on the other hand live in stable home
structures, usually medium-rate apartments, with 0-1 household helper and
may have a car and an air condition unit. Households that belong to this class
have an average total monthly income of P20,001 - P50,000 and
breadwinners are usually employed as small scale businessmen, middle
level/junior executive/manager, skilled manual workers and senior whitecollar workers.
The third and fourth groups are the D (lower class) and E
(extremely low class) respectively. The former are households that have some
comfort and means, but basically thrive on hand to mouth existence while the
latter experience greater difficulty in meeting their basic survival needs.
(Trend News Survey, Socio-economic Classification 2007).
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II. Factors Influencing Household Services Consumption
A. Economic: Financial
There is an assumption that domestic outsourcing alternatives are
purchased on the market as substitutes for the household labor performed
at home, which becomes the bases of the financial resources explanation
of outsourcing. (Oropesa, 1993b) It becomes more attractive to spend
more time in the paid labor market rather than at home. (Bianchi et al,
2000; Hochschild, 1989) (As cited in Tijdens, Van der Lippe and de
Ruijter, 2003).
Hanson and Ooms (1991) showed the importance of housework
service spending for dual-earner couples with the use of two variables
namely family or husband’s income and single-earner versus dual-earner
status. They found out that women married to men with higher earnings
consume more housework services whether they contribute their own
earnings or not.
Gupta (2005) and Hanson and Ooms (1991) found that women
who have higher income have larger housekeeping expenses than that of
men. This implies that women and men do not only allocate various
amount of their time on household chores but also have different income
allocation in acquiring substitutes to do the housework for them. And in
terms of both couples earning, dual-earner couples spent more than twice
the “the amounts spent by single-earner couples on domestic services and
day care”.
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Furthermore in Gupta (2005), women who have lower income in
their dual-earner relationship, use their earnings instead of their husband’s
greater income to purchase sources that would reduce housework.
Apparently, higher-earning women spend less time doing household
chores because they have more bargaining power in terms of doing
housework negotiations than those lower-earning women.
However, Oropesa (1993) identified the use of women’s
independent earning as a significant variable. Similarly Presser (1994)
found wives’ earnings to be associated with reduced housework. Brines
(1994) pointed out that greater financial resources facilitate the purchase
of household services. (As cited in Cohen 1998).
Zick, McCullough and Smith (1996) examined the influence of
marital status (time constraints) on the demand for services using the
household production model on data collected from the 1987-1988 Utah
Time Use Study. Their research concluded that families headed by single
mothers were more likely to purchase housekeeping services than their
two-parent counterparts holding income and other factors constant.
Tijdens, Van der Lippe and de Ruijter (2003) performed logistic
regression analyses with the Women’s Wages Indicator Questionnaire
(WWIQ-2000-01). After testing three hypotheses they concluded that
purchasing housekeeping services was highly dependent upon the
woman’s job (working hours, supervisory position, and hourly wages), to a
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minor extent dependent upon the children and partner. Both age and high
education have an impact as well.
All three explanations are factors commonly encountered by
researchers in determining attitudes on household outsourcing either
individually or combined.
Bellante and Foster (1984) researched on the connection of the
employment status of a wife and household service consumption. Food
away from home (FAFH), child care, domestic services, clothing care and
personal care were the services that were analyzed (dependent variables).
The results from the multiple regression analysis made showed that apart
from the employment status of the wife, expenditure on services are also
dependent on the more detailed employment status of the wife –number of
work weeks and number of work hours. Income, race and value of time
were variables not associated to the employment status that were found to
affect monetary outlay on household services.
Similarly, a later study made by Soberon-Ferrer and Dardis
(1991) about the factors that impacts purchasing of household services
focused solely on working-wife households. The dependent variables used
are the same as that of Bellante and Foster (1984). Using data from the
1984 and 1985 Bureau of Labor Statistics Interview Panel Consumer
Expenditure Surveys (CES), results of a Tobit Analysis found that the
significance of a variable is dependent on the type of service category and
on whether the wife works full-time or part-time (Soberon-Ferrer and
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Dardis 1991, p. 395). The full-time and part-time working-wife’s
expenditure on domestic services, clothing care and personal care did not
vary however, expenditure on child-care and food away from home
(FAFH) have a more positive relation to the full-time working wife.
Due to the increasing part of the female gender in the work force
(or paid work), there has become less time for them to assume household
work when they come home at the end of the day. This is especially true to
Canadian women who have been described as continuously becoming
“time poor” for possessing the natural duty to make the home as women
and at the same time working. Because of this, working Canadian women
resort to outsourcing domestic help (excluding child-care and outdoor
home services).
Through the survey conducted on husband-and-wife
households and the use of the logistic regression to analyze the data
gathered, it was found that households with high incomes and have bigger
homes purchase more domestic help. Moreover, the dual-earner status of a
household is not significant in the likelihood of a household to purchase
domestic help, however the portion of the wife’s income is a significant
factor. The study found that women who earn drastically more income
than their husbands spend more in purchasing domestic help. The wife’s
age also plays a big role with likelihood of a household to purchase
domestic help because as the wife ages, she becomes less willing and/or
able to maintain her home. (Palameta, 2003)
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Nickols and Fox (1983) examined the 5 strategies proposed by
Strober and Weinberg in 1980 which working wives can use to reduce
time pressures that come with joggling familial and work responsibilities.
The strategies are: 1. Substitute capital equipment for their own nonmarket
labor, holding constant total quantity and quality of house- hold
production. 2. Substitute the labor of others (paid help, husband, or
children) for their own nonmarket labor, holding constant total quantity
and quality of household production. 3. Reduce the quality or quantity of
household production and/or use own labor more intensively or efficiently
when engaging in such production. 4. Decrease time, if any, allocated to
volunteer and community work. 5. Decrease time allocated to leisure
and/or sleep (Nickols and Fox 1983, p. 198). These were categorized into
either time-saving or time-buying strategies. Findings provide evidence for
some of the strategies such as strategies 1 and 3. Moreover, it was also
learned that time-saving and time-buying strategies were mixed together to
help lessen the pressure with managing household work.
Offering housekeeping in the condominiums gives a sense of
convenience. As cited in Understanding Service Convenience (Berry,
Seiders, Dhruv, 2002), “The continuous rise in consumer demand for
convenience has been attributed to socioeconomic change, technological
progress, more competitive business environments, and opportunity costs
that have risen with incomes” (Berry 1979; Etgar 1978; Gross 1987;
Seiders, Berry, and Gresham 2000).
Given that most condominium
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residents do not have their own helpers who clean their condos and
cleaning themselves would be taking most of their time, it would only
seem convenient if condo residents are given an opportunity to avail
housekeeping. There is emphasis given to time because it is finite. There
are only 24 hours in a day and each minute should be utilized accordingly.
And personally cleaning up one’s condo is an unlikely activity that would
be worth one’s time. Berry, Seiders, Dhruv (2002) referred to Hol-brook
and Lehmann (1981) in that “time has been classified according to work
and non-work roles; non-work includes activities of necessary selfmaintenance, household maintenance, and leisure.”
By having a
housekeeper, one will have more time for the more important matters.
B.Social: Gender, Race, and Ethnicity
Cohen (1998) utilized data from the 1993 Consumer Expenditure
Survey conducted by the U.S. Bureau of Labor Statistics to examine
housekeeping and meals out spending of households. His research
suggests that housework-related service consumption is affected by
dynamics within marriages, family class and race-ethnicity. Specifically
his two hypotheses, which are: (1) Women in relatively powerful positions
within marriage will command greater consumption of housework services
and (2) housework service consumption increases with families’ economic
and social position net of husbands’ and wives’ relative positions, proved
to be consistent with his findings.
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Despite the economic background that is inherent in the previous
factors considered gender, race and ethnicity differentiation are also
embedded factors, which also determine outsourcing behavior in
households.
Functionalists argue that childbearing associates women with the
housekeeping role while men are typically given the labor force advantage.
Gender-typing of chores also exists. Routine chores that are unpleasant fall to
women while occasional tasks fall to men. There are two theories on how
gender influences domestic behavior. Gender socialization implies that men
and women conform to internalized ideologies of gender differentiation and
inequality independent of their household context, which predicts consistent
acting out of gendered behavior. Gender production on the contrary assumes
that people only act out gendered behavior under certain conditions, which
predicts gendered behavior as dependent on the gender composition of the
household. (de Ruijter, Treas, & Cohen, 2005).
Apparently, Whites show greater service consumption as compared
because of their greater economic resources. Hence, they perform less
household labor as compared to Black or Hispanic families (Cohen, 1998).
C.Risk Factor
Earlier studies on outsourcing household services indicated that is
often expected that households with less time available to do certain tasks
seek outsource help more often than other households (Bellante and Foster
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1984; Cohen 1998; Oropesa 1993; Soberon-Ferrer and Dardis 1991; De
Ruijter and Van der Lippe, n.d.). Household members can only allocate so
much of their time in a day to do more important tasks (i.e. go to school, go to
work). The more time they need for work or school, the less time is there
available to do household chores. But recent research, that of De Ruijter, Van
der Lippe and Raub (2003) contradict the earlier studies by stating that
“having less time for household work does not necessarily increase the use of
outsourcing.”
In household outsourcing, time availability is not the only concern
that the household should consider. Based on the studies of De Ruijter and
Van der Lippe (n.d.) and Hondagneu-Sotelo (2001), household outsourcing
implies that an outsider performs domestic tasks for the household”. And
there are two ways in which a household’s privacy could be compromised.
First, the “outsourcing supplier” can enter the household, often without any
household members present. Second, the “outsourcing supplier” can take over
tasks with special value (e.g. childcare). Hence, in outsourcing household
services, risk issues are considered.
One risk to be considered is trust. According to De Ruijter and Van
der Lippe, n.d.), trust becomes an important factor because “the family is a
valuable good that reaches far beyond financial interests, and norms or
feelings of privacy.” By inviting an outsider into a household, they have
access to personal belongings, to the living space and to the household
members. Households often worry about theft of valuable items or the
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welfare of their children because the outsource supplier might have different
work values and ethics to that of the household. Moreover, the trust issue
entails investing in transaction costs – cost incurred in availing outsourced
household services (e.g. supplier search cost, surveillance measures) to
prevent trust problems. The attractiveness of availing outsource is then
dependent on these costs (De Ruijter and Van der Lippe, n.d.).
Another risk is the objective risk in which the supplier will not be
able to deliver a service according to the demands and standards of the
household. The objective risk becomes higher “when the household cannot
monitor the quality and effort of the supplier’s work.” (Batenburg et al.,
2003; DiMaggio & Louch 1998; De Ruijter and Van der Lippe, n.d.). The
objective risk covers several elements: (1) information asymmetry, (2) onesided dependence, (3) valuable assets and damage potential.
Information asymmetry is when the household becomes uncertain
about the supplier’s work because the quality and efforts of the outsourced
help is not always visible to household members. Evaluating an outsourced
help’s work is difficult when no one is there to monitor or supervise. Factors
resulting in to these problems are work schedules, time flexibility, task skills
and standards. Skills are regarded because if household members are capable
of doing certain tasks, it is more likely for them to do the tasks themselves
rather than spending money in hiring others to do the same tasks. Thus, the
higher the skill level of the household (members) the lower the likelihood of
outsourcing (De Ruijter and Van der Lippe, n.d.).
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One-sided dependence entails the “extent to which the household is
dependent on the supplier, without the supplier being dependent on the
household.” According to Williamson, 1981; 1985, the dependence revolves
around “relation-specific investments” or the value or relationships attached
to the process of household work (i.e. relationship of a babysitter with the
child). The more they have these investments, it is less likely the household
would outsource. And household should also consider the additional costs in
switching to another supplier because of they have to make the same
investments again (De Ruijter and Van der Lippe, n.d.).
The valuable assets and damage potential implies that “the more
valuable assets a household has, the more incentives the supplier has to
behave opportunistically, and the higher the possible damage associated with
outsourcing the household may suffer.” The more valuables the household
have, it is less likely for the household to outsource (De Ruijter and Van der
Lippe, n.d.).