Perfect partners: How could outsourcing facilities management save your business?

AUSTRALIA, 18 July 2022 – The latest wireless sensors, robot cleaners and green energy deals might not be top of mind for companies focused on their core business, as they emerge from pandemic mode.

But there’s a new breed of property manager for whom these cutting-edge details add up to significant benefits and support greater business initiatives such as sustainability. These experts –known as facility management partners – are coming to the fore, as businesses rein in costs and outsource the non-core business activities.

JLL estimates the global market for facility management will be worth US$1.9 trillion by 2024. Just over half this market is now handled by operators to whom companies outsource tasks.

A well-crafted facility management plan can reduce a business’s property-related spend by up to 25 per cent, JLL has found. Savings are typically found in energy consumption, property maintenance, workforce administration, training and supply chain management.

In its new report Facility Management Outsourcing: Five steps for navigating the journey, JLL pinpoints the key benefits and pitfalls of this sort of partnership.

JLL’s Head of Sales, Work Dynamics – Australasia, Nick Moore said outsourcing was a valuable strategy for businesses keen to concentrate on their core activities.

“Once a comprehensive facility management partnership is in place, it will significantly reduce the effort, and cost spent running your property portfolio, whilst also accelerating your sustainability and compliance objectives,” Mr Moore said.

“There have been enormous advances in this area, with automation, wireless sensors, machine learning and artificial intelligence helping to keep building systems running smoothly. A business might not have this technology expertise in house, but a leading service provider certainly will.

“Leveraging a facilities management company’s supply chain network can help reduce your third party spend through leveraging their size and scale Additionally, sustainability is an equally important area -- the best providers know the latest practice and regulations and can craft a comprehensive program to reduce a building’s carbon footprint and help businesses achieve their net-zero objectives.”

Mr Moore said outsourcing made good sense amid Australia’s current staff shortage, with many businesses unable to find the right talent for an in-house role.

“For individuals who do have facility management expertise, specialist service providers are becoming an employer of choice,” he said. “Globally, this sector is growing by 6 per cent a year.

“In-house employees will naturally be concerned about future job security. The reality is that a reputable partner will be eager to hire your facilities staff and retain their valuable institutional knowledge. In fact, employees who transition to your service provider firm will likely discover opportunities for career advancement and further learning.”

In Facility Management Outsourcing, JLL recommends five steps a business should take when considering a facility management partnership:

Clarify your goals. What do you hope to achieve? You may wish to spend less time and energy on facilities, be concerned about deferred maintenance or want new ways to improve efficiency.

Collaborate with your stakeholders to identify needs and issues. Your stakeholders might include the CEO, the executive leadership team, director of facilities and their teams.

Explore options for achieving goals. This could mean a tweak of current in-house practice or the outsourcing of several operations. For example, to tackle deferred maintenance, you could retain a building assessment and asset management service for data-driven capital planning and maintenance.

Design a transparent commercial construct. Unlike traditional procurement contracts, facility management providers often use outcomes-based contracts that focus on key performance indicators rather than on predefined tasks. In performance-based contracts, the partner’s fees typically are reduced if goals aren’t met, while shared savings and bonuses are provided for exceeding targets.

Communicate clearly to ensure a smooth transition. Your team will want assurance that the facilities staff they know and trust will still be on hand, that services will be easy to access and that the service provider is reputable and committed to transitioning employees.