The Cost of an Internal Facilities Management Team vs. External Facilities Management Consultants: Why Outsourcing is the Smarter Choice
In business operations, facilities management plays a fundamental role in ensuring the efficiency and functionality of a company’s physical environment. Effective facilities management is essential for various tasks, from maintaining HVAC systems to ensuring workplace safety or managing daily operations. However, one critical decision facing most businesses is whether to retain or introduce an internal facilities management team or to hire external facilities management consultants. This article explores the cost implications of both options, focusing on why external resources can often provide better value and more flexibility.
Understanding Facilities Management
Facilities management incorporates various services that contribute to a company’s operations’ safety, efficiency, and sustainability. These services include maintenance, security, cleaning, and office planning. Effective facilities management ensures that the workplace supports the core activities of the business, enhances employee productivity and well-being, and meets all health and safety regulatory requirements.
For instance, you can enforce security at your facility with a team of security guards, mobile patrol officers, CCTV surveillance, and security consultants. If you need cleaning and maintenance, you can have commercial cleaning and grounds maintenance professionals oversee the aesthetics and cleanliness of your facility. That way, you and your employees can focus on running your company’s core operations.
Internal Facilities Management Team: The Hidden Costs
An internal facilities management team is a group of company employees who are responsible for conducting maintenance tasks inside and outside the facility. Many business owners and managers feel that using an internal facilities management team is cheaper than hiring outside help because they can have their own salaried employees do the maintenance work for them.
However, maintaining an internal facilities management team involves several direct and indirect costs, which can become more expensive than hiring outside help. Here are the primary factors to consider before implementing an internal facilities management team to do your facility maintenance work:
Salaries and Benefits
Employee salaries and benefits are the most significant expense of an internal team. Facilities managers, maintenance staff, and administrative support require competitive salary packages, potentially including holiday pay, healthcare, pension contributions, and other perks.
Remember that the employees of an internal facilities management team are solely responsible for conducting maintenance tasks. You are not delegating maintenance responsibilities to other employees working in different positions in the company because they are not maintenance experts.
Because of this, you will be forced to hire new employees and pay them salaries and benefits just to get the maintenance work done in your facility. You will learn very quickly that it is not financially lucrative for your company to take on this kind of expense for facilities management.
Training and Development
Facilities management is a dynamic field with evolving technologies and regulatory standards. Continuous training and development are essential to keep the internal team updated on best practices and all ongoing and new regulatory and compliance requirements. This investment in training and development can be costly and time-consuming.
Would you really want to pay for salaries and training for your internal team members? Why do that when you can contract to an external team that already goes through continuous training at their own expense?
Recruitment and Retention
Hiring skilled facilities management professionals can also be challenging and expensive. The recruitment process involves advertising, interviewing, and onboarding, all-consuming resources. Moreover, retaining talent requires ongoing efforts to ensure job satisfaction and career development.
It can take weeks or even months to find the ideal professionals to handle your facilities management tasks. And even if you find the right professionals and invest in their training, there is no guarantee that they will stick around for a long time. With a high turnover rate, you will be forced to spend more time and money hiring new internal team members.
Equipment and Technology
An internal team needs access to the latest tools and technology to perform their duties effectively. This includes maintenance tools and equipment, software for tracking and managing tasks and issues, and personal protective equipment (PPE). The initial investment and ongoing upgrades can add up significantly.
Since you are the employer of the internal team, it will be your responsibility and expense to provide these tools and technologies to the team. So, not only do you have to contend with the high cost of salaries and training, but now you must also deal with the costs of providing equipment and technology. It is simply not worth the expense.
Overhead Costs
Beyond salaries and equipment, various overhead costs are associated with employing an internal team, such as physical office space, utilities, and administrative support. These expenses are often overlooked but can substantially impact the overall budget required.
External Facilities Management Consultants: Cost-Efficient Expertise
External facilities management consultants are not salaried employees of your company. They are outside, third-party professionals who have acquired their own training, skills, and experience in facilities management.
When you hire external consultants to provide you with facilities management services, they are working only on a contractual basis. That means you do not have to pay them a salary or offer any special benefits to them. They only work for the agreed price of the contract, and that is all.
Hiring external facilities management consultants can offer several financial advantages over maintaining an internal team. Here’s why outsourcing can be a wiser choice for your business:
Reduced Overhead Costs
External facilities management consultants operate independently and do not require your business’s office space, utilities, or administrative support. This reduction in overhead costs can result in significant budget savings.
Think about using this saved office space for other purposes that can help expand your business operations and increase profits for your company. Let the external facilities management consultants worry about funding their own office space away from your facility. It doesn’t have to be your problem.
Access to Expertise
Facilities management consultants bring a wealth of knowledge and experience and a network of trusted contractors for the more specialised work. Specialists always stay current with the latest industry trends and regulations. This expertise can enhance the efficiency and effectiveness of your facilities management offering without needing expensive and time-consuming training.
Facilities management consultants are experts in multiple fields, such as security, commercial cleaning, grounds maintenance, and preventive maintenance. Hiring them gives you access to a much broader range of services that would be more difficult and costly to get from your own employees.
Besides, your business does not specialise in facilities management. So, why invest the time and money in training employees to do this work when you can hire outside experts to do it for you?
Flexibility and Scalability
Outsourcing allows you to scale services up or down based on your company’s needs. Whether you require full-time support, part-time assistance, or project-specific expertise, external consultants offer the flexibility to adjust resources without the commitment of permanent hires. They are also available throughout the year with no cover required for holidays or sickness.
You have complete control over the facilities management work because you can hire external consultants only when you need them. Since there will probably be times when you don’t need them, you won’t have to pay anybody for facilities management until you request the work to be done.
Cost Predictability
With external consultants, you have clear, contract-based pricing structures. Each side sits down and agrees upon a price before any work begins. That way, there is no confusion over the pricing, nor do you risk paying too much for work that doesn’t need to be done all the time.
This pricing format helps in budgeting and financial planning because you will know exactly how much you must pay for the facilities management services requested. Meanwhile, you can avoid the unexpected costs associated with employee turnover, training, and equipment upgrades.
Reduces Risk and Liability
External consultants take on all risk and liability when performing their management services at your facility. If they damage your property or injure someone in your facility, the external consultants are the ones liable for those incidents. Much of your liability is eliminated because these external consultants don’t work for your company.
Reducing your business risk in this way will allow you to avoid lawsuits and other substantial liabilities that could cause financial devastation to your business. The external consultants usually have active insurance policies with liability coverage if an accident happens on the job. So, your business is covered no matter what.
Focus on Core Business Activities
Outsourcing facilities management allows your internal team to concentrate on core business functions. By delegating non-core activities to experts, your company can improve productivity and focus on business growth and profitability.
Some examples of core internal activities include product development, strategic planning, accounting, customer service, and marketing. These are the kinds of tasks that your employees should be doing because they are specific to your company’s operation. Things like cleaning and maintenance are not so direct, which is why external teams are suited to handle them.
Develop Sustainable Operational Practices
External consultants have unique knowledge of the latest sustainability initiatives, technologies, and methodologies to help facilities conduct more environmentally friendly operations. If you care about boosting your facility’s energy efficiency and reducing its operational costs, you can utilise the sustainability knowledge of your consultants to help you do this for you.
Conclusion: The Outsourcing Advantage
While both internal and external facilities management options have their benefits, the financial advantages of outsourcing are clear. By reducing overhead costs, accessing specialised expertise, offering ease in scalability, and ensuring pre-determined costs, external facilities management consultants provide better value for money. Businesses can benefit from enhanced efficiency and focus on what they do best by leveraging the expertise of professional consultants.
In today’s competitive business environment, making wise financial decisions is crucial. Outsourcing facilities management is a cost-saving measure and a strategic move towards operational excellence and sustainable growth. Embrace the future of facilities management by partnering with external consultants, allowing you to focus on your business development.
Ready to transform your facilities management strategy?
Tier1 Facilities Management Ltd. operates a team of facilities management professionals who can serve as external consultants to your business. During your initial consultation with the team, you will learn about the external facilities management services we offer and how much they cost.
Contact us today to learn more about how our expert consultants can provide your business with the best value and support.
