In today’s market, FM procurement teams are being forced to consider one of two options when it comes to buying in services; either the low-cost-low-quality route or high-cost-high-end risks. In this month’s column, Tom Robinson, training & development manager at MITIE Client Services, tells us why he is convinced there is a third way.
This month I had the privilege of presenting to a potential new client. I was talking about the possibilities available for training, in transforming the culture within the FM teams. The client had a refreshingly passionate view about investing in the team’s performance. This got me thinking about the mindset programmed into the FM industry when procuring and managing services – and about the potential commoditisation of its workforce.
We know that when buying anything, ‘comparative value’ is what makes us choose one thing over another, usually being based on two things: cost and quality. The comparative value of a cheap-but-low-quality item will be very different to an expensive-but-high-quality item, depending on who’s buying it and what they intend to use it for. But where is the industry headed? Do we favour low-cost-low-quality, or high-cost-high-quality? Or is there a third way?
I’ve seen many examples over recent years that would suggest the first option; that FM is on a race to the bottom. It’s the mindset of ‘cheapest is best’ that can force employers to strip all available costs and push their employees to work harder for less. The trouble with this mindset is that it’s an easy (and very natural) choice. There is always an opportunity to cut a corner, sacrifice quality, cancel training and cut heads – all to save money. But the race to the bottom can only be a short-term choice. “We’re just like everyone else but a little bit cheaper” won’t work for much longer.
There seems to be an ever decreasing circle of cutting costs. In FM, this usually starts with cutting heads, then asking the team to work harder. Subsequently, the team gets demotivated; the productivity goes down; the revenue goes down; more costs need to be cut – and the cycle repeats. We know it’s cheaper for the budget holders, but how does this approach manifest itself with the people who deliver the service? Well, it often creates disengaged, disenchanted, undervalued, uncommitted and unconnected robots; people who show up because it’s “just a job”. And sometimes they don’t even show up.
The second option of ‘high-cost-high-quality’ is rarely possible. In an era of double-dip recessions, even ‘five-star’ services cannot have unlimited budgets, only the super rich organisations will procure the most expensive services. So what would be the ‘third way’?
The third way is really simple. It can result in cost savings and higher quality. With bigger buying power and economies of scope and scale, it is possible to leverage resources, knowledge and know-how to increase performance and quality while reducing cost.
But organisations of any size can invest in their people. It takes generosity when everyone else is taking away. It takes patience and effort and an understanding of the power of connecting with people. It takes being different. It takes passion, purpose and a real desire to inspire and motivate your people.
In any industry (and especially in FM), there will be both the low cost/low quality options as well as the high cost/high quality ones – and everywhere in between. However, industry-wide, one huge risk will become clear; if we commoditise the industry and start the race to the bottom, we might win.
Extract FMJ September 2012