Now, just one year after Britain voted for Brexit, a hung parliament will impact not only the political future of the UK, but its economic fate also. With negotiations on Brexit due to start this month to shape our exit from the EU, this isn’t a time for FM managers to sit back and wait. Quite the reverse.
Some suppliers and providers will respond to the economic uncertainties by marking up prices and creating new market rates, because of assumptions not only about the direction of sterling, but also about what the new trade agreements will look like and how they will impact tariff quotas. For both clients and contractors, the uncertain economic environment is a driver to continue cost reductions to shield the impact of Brexit on our respective businesses.
Now, more than ever, facilities managers must be ready to proactively manage their FM activity, carefully considering and weighing up their options for service providers, so that they are in control as far as possible in these uncertain times.
There are a number of ways to do this. Here are a few pointers to begin with:
Consider outsourcing: At Salisbury Group we have already seen a spike in interest in outsourcing since the Brexit vote. The uncertainty of what Brexit would mean, led to many businesses reviewing their growth plans and strategies, or even putting them on hold altogether until the fog cleared. Purchasers of FM services wanted to manage those uncertainties prior to the negotiations and agreements with the EU, by shifting their budgets from less-flexible in-house provisioning to contracting-out the potential risks to outsourcers.
Better purchaser/provider relationships: Partnership working is the key here, with providers especially needing to promote more openness to new ways of working. A fresh, transparent approach that means more than just pitching the lowest cost services and once signed, letting the contract run its course. Providers will need to work with FM managers more closely and not just treat contracts as a numbers game, replacing ‘margin busting’ with a more intelligent, flexible, educated tack, guided by expertise and market knowledge.
Review your SME provider base: The perception that selecting smaller FM services providers increases the risk to reliable provision, is changing. The risk of continuing working with globally-exposed or EU-based providers can be greater. The agility and adaptability of the SME provider, and their expertise in innovation – i.e. not being tied down to the mantra ‘that’s how we’ve always done it’ – means that they can find ways of saving money more quickly than larger multi-national providers with more complex change-procedures.
Amid the political and economic turmoil of the next few months, it’s vital that FM managers step up to the challenges ahead, but this is also about opportunities. Mature and stable, commercial decision making can help FM manage the risks well, and gain a better way to more effective facilities management.