The Truth of Maid Agencies
Everyone has a negative experience with Maid agencies!!
We get a lot of feedback from clients about the negative experience they have had with maid agencies. While there are agencies that do not conduct business in an ethical way, the bigger problem is about the expectation mismatch. There is a mismatch between what a client thinks a maid agency’s role is and what is actually done by them. In most of the cases, the Clients simply assume things. And maid agencies let them assume; as it is convenient for them as well.
Why are we writing this article?
Since we think it is our responsibility to add value to the eco system, we are trying to make the customers aware about how agencies work. The idea is not to demean their role. Please note that we are also an agency apart from having an online portal. But we want to bring in transparency and reduce friction between the agencies and the clients. There are customers for whom agencies are adding big value. Such customers should continue with agencies but it is important that they go with their eyes open.This is a detailed article. It will need patience but if you have interest in business models, customer psychology or in hiring a domestic help, you should read on.
Here are some of the myths about maid agencies:
Myth 1: Agencies have control over maids
Myth 2: Agencies know the maids personally/ Maids always work with one single agency
Myth 3: Maids are pre-verified (Police verification/ Third party verification)
Myth 4: Agencies make a lot of money
Myth 5: Agencies provide temporary replacement
Before we deep-dive, for ease of understanding, let us divide the agencies in two broad buckets:
|Small/ Local agencies||Large agencies|
|Area of operation||Small localised area||Pan-Mumbai|
|Team size||Mostly run by a team of 2-3 people||Run by a larger team|
|Digital presence||Limited or no digital presence/website||Good online presence|
|Client acquisition||Word of mouth reference or by Just Dial||Online advertisement/ website|
|Maid interaction||They call maids in their office and fill up paper forms||Maids register on the phone. Do not visit office|
|Commission||They charge lower commission than other agencies. In some cases, agencies take commission on a monthly basis along with the salary date of the maids. In some cases, they charge money from maids as well||Charge one month salary of the maid as their commission. Do not charge money from maids|
|Database of mads||They have a small data base of maids. Hence, the ability to provide a replacement is limited||Large database|
The above classification is largely valid. Of course, there could be exceptions.
Apart from the above two, there are nursing bureaus that provide caretakers for patients. These bureaus assess and evaluate the caretakers, and keep them on their payroll. They generally provide staff on a temporary basis.
The nuts and bolts of the Business:
One of the reasons why customers have a negative experience is because it is a difficult business to run…really difficult. To give an example, let us go through how the Maid sourcing funnel works at a typical agency:
Let’s consider a typical Requirement: Dear Agency, I am looking for a babysitter in Sakinaka, Andheri.
She should be in 20-30 years age range and have at least 2 years of relevant experience. I will pay
her Rs 11000 per month. Her job time will be 9 AM- 7 PM (10 hours).
Pretty standard, right?
Now, let us see what kind of database of maids is required to find this maid. These are the average filter ratios at each stage of maid sourcing:
Sourcing Funnel :
|Total maids registered in Andheri East (Includes micro locations like Station-Highway area, Chakala, Marol, Sakinaka, Poonam Nagar, Chandivali)||1000|
|Total maids living around Sakinaka area. Maids includes cooks, babysitters, housekeeping maids||150|
|Maids Interested in Babysitting work||75|
|Babysitters meeting experience criterion||50|
|Babysitters meeting Age criteria||25|
|Babysitters looking for a job at that time||15|
|Babysitters interested in 10 hours job (9 AM-7 PM)||10|
|Babysitters agreeing to the offered salary||5|
|Maids turn up for interview||3|
So, you need approx. 1000 maids registered with you to place one maid in a locality. Since Andheri East is such a large area, the above example is an outlier but for any other location, the corresponding number will be at least 400. Over the lifetime, generally, the agency will be able to place only 10% of the maids registered with it and hence earn revenue only from 10% of maids. Let us keep this in mind as we will refer to this in our subsequent discussion.Now, let us burst the common mis-understanding about Maid agencies:
Myth 1: Agencies have control over maids:
We need to understand the concept of pay-rolling. If you pay salary to the maid directly, she is on
your payroll. On the other hand, if you make a monthly payment to the agency and they in turn pay
the maid’s salary, the maid is on agency’s payroll. Now, most of the Large agencies (as explained
above) follow the first model i.e. they will take their recruitment commission upfront and the
payment of monthly salary will be your responsibility. The reason for this is simple- agencies do not
trust customers. Just like customers do not trust agencies 😉 They do not want a situation where the
maid and Client get into a hush-hush agreement after a couple of months and the agency is out of
the picture. That’s why they take their commission upfront. It’s only some Small agencies who do
not get business otherwise agree to payrolling of maids.
Agencies that are not payrolling have no control over maids. If the Client is facing a problem, at best the agency can call the maid and tell her that if she does not mend her ways, she will not be placed again through the agency. After that, it is upto the maid to decide how she wants to take it forward. In most of the cases, we have seen these threats do not work. She can find a job through many sources.
We have heard clients say “If your maid steals money, will you take responsibility?”. We clearly say that we can not take that responsibility. But, we are aware that there are agencies that give a false commitment just because they want to close the position. Clients need to understand that the maid is on Client’s payroll and agencies can not take responsibility. People working in a corporate set-up need to imagine a situation that a new VP- Sales has been hired through a recruitment agency and he commits a fraud. Will you hold the recruitment agency responsible for the fraud?
So, in a nutshell, if you are hiring from an agency thinking that this will give you more control over the maid, you are mistaken.
Maids look out for jobs through multiple sources and hence it is not necessary that someone who is
placed through an agency once will again get a job through the same agency. They could find a job
through friends and family or through any other agency.
Secondly, as we mentioned earlier, Large agencies do not even meet maids personally. Even though small agencies might have met them personally, they have no incentive to filter out maids based on any negatives that they might be aware of. Business survival is a more urgent need for them than reputation management. So, it does not matter whether the agency has personally met or not.
Clients should assume that the agency knows neither the past work done by the maid nor about the personal life of the maid.
Agencies do not do third party verification while registering maids.
At most, they collect their documents. It does not make financial sense for the agencies to do
verification on every maid when they know that there is no guarantee that they will get a job only
through them. Only 10% of registered maids give them revenue. It costs at least Rs 500 to do Police
verification or background verification through a third party.
If you go through the Agreement/ Terms & Conditions on the agency website, you will see that all the agencies put the onus of background verification on the Employer. Some agencies do not even provide this as a value added service and ask the Employer to get it done.
Most of the agencies are just about managing to survive.
Even the most known agency in the country is loss-making. While at an individual transaction level, it
appears that agencies make a lot of money for simply introducing a maid, if you see the aggregate,
the picture is not rosy. This naturally impacts the professionalism and ethics of maid agencies (‘Need
to survive’ takes precedence over Long-term values). Therefore, it is important to understand the
factors that are responsible for this:
1. Client back-out: Clients engage with 2-3 agencies and conduct interviews with their maids
but select only one. As a result, the resources of the other unsuccessful agencies are
wasted. Sometimes, clients just change their mind and do not hire at all or hire through
personal reference. Worst is that some clients do not even inform the agency about the
change in plan. They simply stop answering calls!! In other words, as in most brokerage
service businesses, paying clients subsidise the non-paying clients.
2. Cost of acquisition of maids: Please refer to the funnel. It takes a lot of effort to on-board maids who are not tech-savvy and then to skim through hundreds of maids to get one hired.
3. Unprofessional attitude of maids: There is a disproportionate effort that goes into sourcing of maids for a position due to their unprofessional behaviour. They never say “No” to anything. They simply stop answering your calls at the most crucial time.
4. Low entry barrier: It’s not very difficult to start this business at a small-scale. As a result, there are hundreds of small unorganised agencies. Most of them get clients based on their ‘lower than market price’. This results into an unhealthy price trend, which makes it difficult for small agencies to be able to serve their clients professionally for eg. to provide a timely replacement.
5. Leakages: Clients get into a side-deal with maids and push the agency out.
Myth 5: Agencies provide temporary replacement:
Some customers hire maids from agencies only because they don’t want to be without a maid at any
point of time. The fact is that if your maid goes on a 5 days leave, no agency is going to provide you a
temporary replacement. They don’t have maids ‘on the bench’ for such temporary gigs.
So, what is the role of the agencies?
Their limited role is to introduce two interested parties. And to provide a replacement, if the original employee quits the job.
We hope this article will help the households make an informed decision. At the same time, it will help the industry since agencies spend a lot of time on addressing customer issues after the placement is done. If the agencies can be upfront about what is their value addition, a lot of friction can be avoided.
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