Cost Management Strategies
Facilities Management Cost Trends 2023
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- Prepare for more costly labor contracts and potential work stoppages
Labor shortages remain in the U.S. and in many other countries, raising the risk of work stoppages and/or contentious labor contract negotiations. Having contingency plans in place and budgeting appropriately if contracts are up for renewal are important.
- Invest in skill development for key trades
Not only do labor shortages create wage pressure, they can also accelerate turnover in trades that are critical for operations. Investing in skill development—including apprenticeship programs offered by suppliers or local trade schools—increases the ability to attract and retain these key employees.
- Embrace Smart FM and dynamic solutions
By enhancing operating and energy efficiency, Smart FM solutions are helping companies counter pressure from labor shortages and energy price volatility. With advances in sensors and building optimization systems, maintenance routines are driven by actual equipment condition and cleaning scope is aligned dynamically with occupancy. AI and machine learning are poised to multiply Smart FM's cost savings.
- Explore creative financing for energy efficiency projects
With ongoing energy price volatility, energy efficiency capital projects are an effective way to reduce future operating costs while furthering sustainability goals. However, the higher interest rate environment may translate to higher internal “hurdle” rates, making it more difficult to fund these projects. Creative solutions—like Energy Efficiency as a Service (EAAS)—can prove effective without significant capital outlays.
- Lock in lower energy prices where possible
While energy costs are down from peak levels in 2022, future energy price volatility remains a reality for the foreseeable future. Depending on where your facilities are, now may be a good time to lock in lower rates.
- Target Total Portfolio Impact
Total Portfolio Impact (TPI) means doing three things in tandem—right-sizing the portfolio, optimizing the carbon footprint, and improving workplace experience. While these actions can be in conflict, a comprehensive TPI strategy uses data to drive operating cost savings while also freeing up funds to invest in sustainability. Strategies like TPI can be particularly attractive for generating savings in a higher interest rate environment.
September 20, 2022
Facilities management’s role in an organisation has evolved dramatically over the past decade and decisions are becoming increasingly more data-driven. In this article, we examine seven ways in which data available to FM teams can improve decision making.