The Business of Private Service

mrsStarkeyAdministratively, I had never thought of myself as particularly skilled. I was indeed an entrepreneur, and had a very clear vision of what I was to accomplish, but the administrative perspective was way too structured, systematic and maybe boring for my active service heart to ascertain. I remember early on, when organizing a housekeeping company, the idea of keeping books, hiring staff and actually purchasing a computer in 1981 was way over my head. I set up my first corporate bank account using my father’s credit card and cashed in a paid up life insurance policy purchased for me at birth.  He co-signed the card so that the bank knew someone would be accountable.  After all, I was just a cleaning lady. I kept that card for 25 years, well after he had passed on. Giving it up was a traumatic experience. His name on my credit card forced me to always keep my bills paid.  I would have rather died than have the bank call him suggesting I had failed in the administrative duty of paying bills.

mansionI also remember coming to a place in my business growth where I was completely overwhelmed and simply did not know what to do. I went to my then female banker, and with a tear in my eye, asked a series of questions. She sternly replied, “I am not your business consultant. Go to the business section of a book store and research all that you might want to learn.” She turned and walked out of her office. I felt rebuked, but it was the best advice anyone could have given me. 

My first book was on simple accounting.  My second book was on basic business practices and hiring. They saved me and Starkey. Administrative skills used to be primarily writing a well written letter. This has been transformed into writing a well written e-mail.  Good Administrative Standards and skills are all about effective communication and organization. It is essential that you have good systems and procedures as platforms for accomplishing many of the tasks that actually hold the container of your business or the Business of Private Service and supporting your Principal’s lifestyle. That will take you, as Household or Estate Manager and all your staff, off of Crisis Mode! 

At Starkey I have the business of education, the business of placement, the business of publishing, a non-profit that provides scholarships and the business of owning a 13,000 sq. ft. historic residence. Each business has a unique set of required administrative skills and specific Administrative Standards to uphold it.  These include: appropriate phone and door answering, computer software for schedules and for collecting database contacts and vendors, procedures for hiring, dismissing and other HR requirements, health insurance, appropriate interviewing questions, business etiquettes and protocols, identification of risks for insurance and liability, budgets, functional chart of accounts, accountability procedures and timelines for payables and receivables, identification and approximate costs and care of collectibles, profiles of staff and their position descriptions, qualified instructors and support vendors. It’s business, and it’s also the Business of Private Service!

I have made a few thousand mistakes over the years. I have quit Starkey twice only to discover when I continued to sign pay checks, my staff kept going. They loved Starkey. I have been stolen from in the 100’s of thousands as I did not always watch closely. My business lawyer informed me several times I was naive and trusted way too much. I paid dearly for this weakness. My biggest administrative lesson, hard learned among many, was to “Trust, but always Verify.”

I also have done some things right. I always kept my vision and my intention of helping to create a Private Service Profession. The most important thing I did was to hire enough of the right staff, and in that I have indeed succeeded.  Many of them were better than I in a variety of skills, and that’s what you look for. Don’t settle for anyone but the best which is not always easy.

roseThe business of Private Service will only succeed when you learn to put your service heart aside and be practiced and consistent in performing your administrative duties, and in the putting in place of functional service systems. Private Service Managers must have approved procedures for your staff and vendors, a good service flow for performing tasks, again take time to hire the right staff, provide real and time-oriented position descriptions, Zone and customized Task Sheets with your Housekeepers and Maintenance staff, weekly development of your Day in the Life for your effective time management, and to maintain good communication with your Principal. Always be aware of their most important priorities.  They change often.

When systems and functional Administrative Standards are in place, you have the creative time and energy to think out of the box, and be a leader and great problem solver. Administrative Standards placed within your overall Service Management Plan make you a true manager in Private Service.       

The Real Cost of Turnover in a Private Residence

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When there is Staff turnover in a private residence more may be lost than just time and energy to rehire for that position. There is substantial Financial and Emotional loss for the Principals and family. We will explore these areas below.

First of all, consider the overall knowledge the Staff employee may have of the Procedures in the home and on the Property or the Favorites of the family or guests that are rarely written down. The majority, if not all, of this knowledge is at risk of being lost when the Staff employee walks out the front gate.

Consistency of the day to day operations of the home, property and family schedules will be disrupted. Relationships are created when there is Staff working in a private residence. Separation can be difficult for the family, particularly for children or elderly parents. Familiarity provided comfort and a new hire will be stressful until they are proven to be trustworthy.

It is very important to take the necessary time to write a real Position Description. Fluff will not serve the rehire process or your efforts in the process.

Consider if they have been trained in Private Service, and if their salary requirements are in line to as you sort through resumes. Higher end clients prefer to use an experienced Private Service recruiter or an Institute such as Starkey as they should be expected to pick the high 2-3 candidates that actually fit your requirements and because the industry is unique and excellent Private Service professionals are rare.

Overall replacement of one staff person can take up to 30 days or more. Do not rush the process! Competent hiring practices for private staff are not the same as corporate practices.

When a Staff employee exits employment, be sure to change access codes, obtain keys, cell phones, other equipment and property, change passwords where required, notify security personnel, retrieve credit cards and other financial instruments in their position during the course of their employment. Also, if provided to the employee you will collect autos, facilitate vacating residential property, and processing the final pay. This can take from 2 days to 2 two months to complete determining on policies and agreements.

Now let’s explore the Financial costs with paying your Family Office Representative to complete the above work. The cost of the Representative’s salary could exceed $25,000 for their time during the process plus utilizing a placement agency paying up to $50,000 when hiring a higher end professional. This overall process of termination and hiring can easily exceed $100,000. False starts and bad hires can double this figure.

There is no amount of monetary value that can be placed upon the Emotional loss of a trusted and valued primary Staff employee. Everyone in the family from the children, the principals, and the grandparents will experience the loss. Primary support is no longer there. With new support not privy to the not so obvious, the many special relationships and agreed to duties that had been developed to meet the needs of the family are lost.

The remaining primary Staff employees, trusted vendors, and other support persons will also have to start over with communicating how their work is completed, the expectations, and the emotional value held by the Principals. This also takes time, which the Principal will be billed for. Starkey estimates this could cost your high net worth Employer an additional $50,000.

Security is at its weakest point when new primary Staff employees have to be replaced. These primary Staff employees may include the Household or Estate Manager, Executive Housekeeper, Private Chef, Nanny or Driver. Overall financial cost is a minimum of $150,000. Hire well!

Households without basic personnel policies further place themselves at risk. Specifics include:

Use of Illegal and Legal Drugs and alcohol; remember marijuana is legal in Colorado and Washington
Absentee policies
Dress codes
Theft policies
Sexual and other Harassment
Safety and use of equipment policies

If the private principal employs more than 15 staff employees, there are other federal guidelines that must be adhered to Confidentially Agreements
Basic procedures including where to park, which bathroom to utilize, which doors to enter and exit by, where to store their purses/bags and hang their coats and which rooms within the home are off limits

However, if you write it, the policy must be carried out or you further place yourself at risk! In summary, hiring and terminating Staff employees is an expensive and time consuming and tedious process. Do it right and do it once!