Don’t spend what you don’t need to!!!

Back to work thinking is now at the forefront of every one’s mind. Preparations are in full swing including the practicalities of housing employees in buildings given the limitations of social distancing and hygiene expectations. Our focus is on operational matters and the FM world has little time to consider strategy; perhaps FM’s real value to the businesses we serve is looking strategically right now.

Controlling FM costs will be critical to the well-being of the business. Stop and think! believe that the run rate on FM costs will need to be reduced by 30% on pre-Covid-19 levels for businesses to operate and this is on top of any rent free or lease cost reductions that have been, or are being negotiated. This is a massive step change in spending and requires a clear strategic direction and tactical plans to achieve success.

For many who rely on the FM contractor market for the day-to-day provision of FM services, a repositioning of the relationship with the contractor will need to be achieved very quickly, or replacement supply chains put in place. This is in the context of a contract market that itself is under significant financial pressure and has started to:

  • Inform their customers that unless staff costs are covered by their customers redundancies will be necessary (again client funded).
  • Reposition client relationships to enable margin increases.
  • De-risk their contracts.
  • Off-load loss making contracts.

Buyers of FM contracted services must now set clear control parameters, agreed with their business, to govern their contract management. They must also be able to think quickly, react quickly, source quickly, and manage effectively within the control parameters. If FM managers focus solely on the practicalities of post Covid-19 building occupation then they will lose the negotiating initiative with their supply chain

Now is the time to think 30% and Quick Source, if you want to remain one step ahead……