Delivering innovation in FM amid economic challenges

It’s undoubtedly an exciting but challenging time for FM in the UK. On the one hand we’re seeing higher FM spending growth than we’ve seen for quite a few years. But on the other hand, that includes inflation acting as a tailwind for revenues. And if inflation acts as the main growth driver, it pushes up costs and other pressures, making profitable growth difficult.

Then we’ve got the potential for increased FM outsourcing rates, which experience tells us tends to happen in times of recession or economic challenge, and we’re already seeing it happening now. But while that boosts FM market revenues, it doesn’t lead to the most creative or innovative contracts if customers are getting nervous and looking to lock down costs.

Although the COVID-19 pandemic is moving into the rear-view mirror, things have definitely not immediately got easier. However, the geopolitical chaos we’re seeing today – a cost of living crisis, energy challenges, staff shortages, and recession threats to name but a few – can actually create opportunities for FM. All types of organisations, both public and private sector, need help navigating the chaos and FM providers can play a huge role.

The future of FM is technology-enabled. That’s now beyond doubt and, although the pace of the journey may be disrupted by current economic challenges, the destination won’t change. That means companies need to stay committed to their innovation programmes and push harder than ever to work closely and collaboratively with customers to achieve mutually beneficial outcomes. It’s time for technology innovators to look more closely than ever at the problems they’re aiming to solve and bring that together, alongside the most dynamic service trends (such as remote services, asset optimisation, energy efficiency, decarbonisation, healthy buildings and ESG alignment).

It’s also clear that adapted working patterns and hybrid working are here to stay, especially in the office environment. Many FM firms have stepped up their innovation efforts in workplace apps, workspace design, room booking, indoor navigation, remote maintenance, and digital twins. In an era where attracting and retaining top talent is a challenge for customers in most sectors, the goal is to create dynamic, engaging, happy, and healthy workplaces, even if employees are not using them 5 days a week. I don’t think user experience is any less critical in economically challenging times.

Likewise, sustainability and ESG have become the pillars driving the FM industry’s disruption and transformation. In the mature and competitive UK market, these trends are at their most potent and impactful. The need to focus on decarbonisation and deliver positive sustainability outcomes has never been greater, with successful players positioning sustainability at the core of their customer experience and value-creation strategies.

While some FM firms may be tempted to buckle down, manage costs tightly and hope the economic outlook improves soon, they’d be better in continuing on the path toward service excellence, sustainability, customer centricity, and innovation. 

THE FM PROVIDER’S VIEW
ANTONY COLLETT,
MANAGING DIRECTOR OF THE WATES FM DIVISION

Navigating innovation while withstanding high inflation and economic uncertainty is extremely challenging, but our sector simply cannot afford not to embrace innovation. When facing difficult economic conditions, we must innovate in a way that is mindful towards the industry and the customers we serve.

High inflation and economic uncertainty continue to pose challenges for our customers, particularly with energy costs. There has never been a more pressing time for our customers to take stock of their energy management strategies, and innovation is absolutely vital here. As FM providers, it is our responsibility to help our clients navigate the current economic landscape, conscious of tightening budgets while pushing innovation forward.

As the climate crisis becomes more urgent and as customers look to retrofit their estates to move towards net zero, we are continually looking at what is needed to support this journey. We’re very proud to be offering an industry compliant retrofit service, but more is needed from the wider industry. Upskilling the workforce and supply chain as well as increasing diversity and inclusion is essential for innovation and to maintaining a strong service for customers.

At Wates, we are committed to investing in the future of FM, because we want to see the industry as a whole remain strong against the turbulent economic backdrop. Educating our workforce on sustainable innovations will allow us to better serve our customers, and position our industry as one of the greatest solutions to the net zero challenge.

In 2020, we launched the Wates Innovation Network (WIN) portal, a marketplace of suppliers of sustainable innovation, vetted by our experts to assist businesses and public sector organisations find trusted partners to assist their journey to net zero. The WIN Portal is free to access, is completely collaborative and helps to educate and increase awareness of green tech innovations.

What’s more, adopting value engineering tactics when searching for suitable suppliers reassures businesses that they are only investing with trusted companies who will deliver the results they need, particularly at a time where budgets are stretched. The WIN Portal has been tried and tested by a number of our customers; in fact, we were awarded Best Sustainability Supplier of the Year by one of our clients after transforming their ESG strategy and creating savings of over £43,000 per unit per year.

Investing in the short-term to save in the long-term is a valuable strategy for businesses looking to maximise their budgets. Having an overview of facilities and assigning budgets to ensure facilities are being used to their full potential will ensure the longevity of assets and assist with planning capital budgets.

Remotely managing and operating buildings through building information modelling (BIM) software is likely to become more popular for smarter building management. Using a digital twin to monitor facilities and even test different scenarios is a powerful FM tool and one that will only become more popular.

We have never seen our work as simple contract delivery where we go in, complete a task and leave. We’re there to optimise buildings, interrogate the way they run and suggest ways our customers can do things differently. We did this with JLL when we invested our contract profits into a 12-month pilot for a new Energy Management System (EMS), which allowed them to test the system without committing budget. The EMS made it possible to access energy data and identify savings immediately and, in partnership with JLL, our project received international recognition through the Green Apple Environmental Award, something we’re very proud of.