Competition in Facilities Management (FM) is fierce. The UK FM sector has always been reliant on a foreign workforce, and wages typically mirror the sector’s low-profit margins. However, the impact of Brexit and Covid-19 has led to a serious reduction in what used to be thought of as an endless resource pool.
What can FM businesses do to counter these challenges, improve staff retention, and protect revenue?
The turnover challenge facing FMs
FM services are heavily dependent on people to deliver a service. Employee costs can be up to 80% of revenues. The FM industry works on very low-profit margins as a result, sometimes as low as ~5% net. Due to low wages and a foreign workforce, staff turnover has historically been a challenge for the industry due to its transient nature. However, there has always been a large labor pool to resource from…until now.
Due to the perfect storm of Brexit and the pandemic, the industry has seen increased staffing pressures, with the availability of staff reducing and the turnover of staff increasing. Employees can easily switch jobs to gain marginally higher wages. The average UK staff turnover is around 15%, according to Monster, although this figure is known to be higher in FM.
At an FMJ webinar in late 2021, it was reported that the turnover of cleaning staff in the NHS was around 26%, while nearly two-thirds (62%) of London-based soft service firms are understaffed. The experts on the panel said they hadn’t seen a market like it in 20 years and didn’t expect to see any change for another couple of years, at the earliest.
Turnover can mean higher training and recruitment costs for FM providers, and lead to inconsistent performance levels for end clients. As a result, businesses run the risk of losing revenue if high staff turnover ends up with poor performance levels.
So, what’s the answer?
Meeting the dual staffing challenges of Brexit and the pandemic
To address the many challenges that confront them, many FM companies are focussing on a few key areas, including:
- Paying the Living Wage
- Providing training and job opportunities for employees
- Investing in technology to reduce reliance on staff, such as robotic cleaning machines or sensor-based solutions
There are also further opportunities for FM companies to explore when tackling the staffing challenge presented by Brexit and the pandemic.
Social value and strong communications are key
Workers in the FM sector, especially those from European Union (EU) countries, have naturally been concerned about what Brexit and the pandemic mean for them and their job security. It has been observed that those firms that have had open and regular communication with their staff have reduced staffing pressures.
One UK-wide FM provider is currently experiencing a vacancy rate of 4.2%, while another is around 10%. Both companies had regularly communicated with staff over the implications of Brexit and any resulting changes in regulation. They held HR drop-in sessions for staff and continued communicating during the pandemic. Another company even sent out messages in multiple languages, so staff felt valued and included, and less likely to look elsewhere for work.
Re-imaging service delivery
Businesses have an opportunity to completely reshape their service offering by adapting to a client’s working patterns. The traditional 9-5, Monday-Friday model has gone, forcing FM providers to rethink how to deliver a service. Being flexible enables FM businesses to reduce costs to the client by tailoring a service to fit their working schedule while maintaining the commercial opportunity and allowing for the FM provider to ringfence their profit. In addition, it helps ease staffing pressures by freeing up roles and reducing the pressure on HR to backfill vacancies.
Challenging times call for FM firms to be even more robust and innovative. The pressure on staffing caused by Brexit and the pandemic can be met, but only if FM firms and their clients are willing to be creative.
Are you looking to address some of the challenges outlined in this post? If so, please get in touch to see how we at Proxima could help you.
