As guardians of the budget, facility managers have the unenviable role of weighing up the advantages and disadvantages of outsourcing facilities management. One of the most frequent questions has to be, “What is the return on my investment?”
Knowing that there is a constant focus on value for money and demand for ever-better facilities, it is understandable that management spending is very much under review. Each piece of equipment, every ageing building and each outside contractor warrants careful evaluation. They need to work together seamlessly when things need replacing, repairing or updating.
So, before looking at the list of advantages and disadvantages of outsourcing facilities management for your cleaning contracts, food outlet services, security equipment or building repairs, there are some factors to consider.
Managing currently employed staff is challenging with outsourced facilities management. The TUPE transfer of staff process can be difficult for all concerned and raises many ethical issues. Will staff retain the same terms, conditions, the standard of employment protection, pay and pension provision?
Many potentially outsourceable roles are vital to an organisation’s successful functioning. Though tapping into cost savings and expertise beyond the business is a great benefit, it’s important to maintain staff morale, motivation and enthusiasm for their role.
Costs and expertise
When outsourcing, consider the cost savings, specialisms and broader industry knowledge of best practices that may not otherwise be to hand.
The ability to concentrate on core business while specialist facilities providers effectively take away the burden of the estates’ upkeep can reduce costs and ensure compliance expertise alongside industry standards authorities.
The right expertise removes the likelihood of potential reputational damage from non-compliant services. Organisations need to adhere to all legislative standards.
Managing facilities with many providers may not maximise efficiencies and cost savings, but a multi-specialist approach can mitigate financial risk.
If something goes wrong with the internal facilities management team, this can have wide-ranging consequences. Outsourcing aspects of facilities management can help to minimise disruption across the organisation, only affecting parts of the business. For example, switching cleaning suppliers in isolation is relatively straightforward.
Positives and Negatives of Outsourcing
A mixed approach could be beneficial to maximise both core facilities, core equipment and non-core services. If you are looking at the outsourced facilities market to bring efficiency, innovation and, ultimately, value for money to your facilities management, here are several positives and negatives – advantages and disadvantages – to consider:
- The potential to reduce your running costs.
- Allowing your organisation to focus on core activities.
- Freeing your organisation from costly investment in new technology.
- Reducing your direct management responsibility for recruitment, appraisals and grievance handling.
- Providing opportunities to replace old out-of-date working practices.
- Losing direct managerial control of staff.
- Failure to identify all facilities issues and hence costs.
- Management contracts and monitoring compliance with all applicable legislation.
- Taxation issues.
- Being tied to another company financially.
- Managing security and confidentiality.