In-house versus outsourced
The recession has affected the way many companies look at outsourcing services, as the temptation to save costs and take provisions in-house plays on the mind of many business owners. RFM Group’s business development manager, analyses the in-house versus outsource debate, discussing the most cost effective way to outsource FM services and what is often overlooked when businesses make the decision to go in-house.
In our ever changing economy, organisations are looking for ways to develop their offering, creating the need for a well maintained space that can adapt to such changes. The growth of different companies has put the FM industry into the spotlight, with sectors from public to private making the standard of their property a top priority. However, in the world of facilities management, things aren’t always that simple, and there is a lot of debate around whether firms truly benefit from outsourcing FM services. It’s important for businesses to get all the facts when thinking of outsourcing and explore their options.
The first point an organisation should consider is meeting and succeeding business goals. At first glance, many companies would see the financial advantages to in-house FM, and are often under the impression this would cut out the middle man and save a healthy profit margin. Although this sounds like a good idea, taking focus off the core activity of a business by managing FM internally can be dangerous territory to venture into, especially in difficult times. The process involved in implementing and delivering a successful FM strategy should not be underestimated, as it requires time, management and FM experience which many business owners often do not have. When FM isn’t an organisation’s core activity, being adaptable and responsive can also be difficult. A FM company can provide this flexibility which an in-house team would struggle to replicate. For example, if a client is hosting an important conference and the room requires a deep clean, or opens a new site that needs maintaining, an outsourced provider has the capacity to turn this around quickly, taking last minute jobs within its stride.
Another big consideration for businesses is making a good investment, one which will save time and money whilst still maintaining quality. As 70 per cent of the average cleaning contract is taken up by staff wages, it is important for companies to receive ultimate efficiency at the best
possible price. Usually with in-house FM, organisations can fall into the trap of paying a team of employees a healthy sum for a sub-standard job. Often these employees will have greater work commitments meaning the job may not be done at all. Experienced FM partners can help here, by implementing new methods and innovative solutions to old problems that save both time and money, but deliver a top
If the time comes to make cuts within a business, getting rid of an underperforming member of staff in-house can be tricky. However, this isn’t the case when outsourcing. If a FM provider is underperforming it’s easier to give notice to the company and terminate the contract.
Using an external provider is not just easier it can also be a good investment, in particular, for larger companies. The return on investment is often higher when employing an experienced contractor as opposed to a handful of in-house operatives. Savings on machinery, materials and consumables are also significant when sourced through a FM partner as they have the contacts and expertise to secure the best deal for clients.
When outsourcing to a facilities management provider, property maintenance is its core business and an area in which it is a specialist. This means that quality control is a top priority. Because of this a reputable FM company will strive to maintain the highest quality service and never let standards slip as this would be detrimental to its business. In my experience, in-house facilities managers rarely take time to check the quality
of service delivery, due to demanding job roles and other priorities. When it comes to quality, a facilities management provider can help a business start as it means to go on, as opposed to allowing average standards to become the standard.
Quality is also maintained and money is saved through enlisting staff that are experienced and experts in the industry. This is something a facilities management partner can provide. It is hard to make decisions on a project when you know nothing about the industry, an issue in-house operatives may face. A facilities management provider has the expertise to stay on top of industry trends and best practice, allowing tactics to be implemented to suit clients and their particular routine. When looking at in-house FM, questions such as, ‘does an accountant really know how to professionally polish a floor?’ or ‘how does the office manager know she’s not being taken for a ride by the pest controller?’ often springs to mind. It is the business of a facilities manager to keep on top of trends from new techniques to the latest chemicals and equipment. In order to stay competitive in the market, FM providers must use the latest methods and ensure service provision is as efficient as possible.
An efficient service is also achieved through effective staff training, which is important for maintaining quality and is often an indirect benefit when outsourcing. FM companies are invariably better equipped to train operatives than office managers, who are usually responsible for overseeing in-house provision and have a skill set that sits outside of the FM industry. An external contractor can support businesses here, by offering quality FM training that in-house staff need but their managers struggle to deliver.
Moving on to one of the biggest issues that is usually overlooked when outsourcing FM – accountability. Quality FM organisations rely heavily of their reputation so any threat to that reputation, such as a disgruntled client, is dealt with as a matter of urgency. If a reputable FM provider receives a call to correct something, or change a work schedule, they’ll jump to it. On the flip side, in-house facilities managers will often take longer to respond due to other commitments and, in turn, could be less cooperative than a dedicated FM partner. When outsourcing, an uncooperative contractor would not be tolerated and, if a facilities management organisation was seen to be under performing, contracts would soon be lost and word would spread. In essence, FM companies, like other businesses, want to retain mutually beneficial custom and recognise the key to this is providing a first class service.
For companies to truly reap the benefits of outsourcing FM services, the provider needs to be able to enforce innovative strategies to deliver on their promise of a fantastic service. The main strategy FM companies should adhere to is to remain proactive. They should be constantly looking to revitalise their service with new methods as well as actively identifying opportunities to create positive changes. Through expertise and being proactive FM partners can take a consultative approach rather than being a pedestrian company that sits back, sends out invoices and orders stock. It is important to look at new ways of doing things with the aims of saving costs and adding value to the contract and the client’s offering. An example of adding value to a contract without the additional cost is making use of the staff. It’s unnecessary for a security guard to be sat permanently behind a desk when they could be emptying bins, restocking photocopiers, washing up and watering plants. By doing this the client’s cleaning spend will be reduced.
It is clear there are many benefits to outsourcing FM services from quality and expertise to cost saving and flexibility. Whether or not FM services should be outsourced must be considered on a case-by-case basis, paying attention to what your business wants to achieve and the capacity within the company to take on and implement a FM strategy in-house. Most FM organisations will be able to offer an integrated service, where you can outsource some services whilst keeping the majority of the work in-house. In my opinion, 90 per cent of companies would benefit from outsourcing FM services to some degree, even though the recession has meant many smaller businesses have had to take some provisions in-house. It is important to remember that in unknown industries clients often want a consultant to make their lives easier, and companies can end up spending more money by taking work out of their remit in-house. Be it on a financial or expertise basis, a FM contractor can bring an array of qualities to the table and add value to an organisation.