Outsourcing management of buildings and properties to facility management companies offers notable cost efficiencies compared to in-house operations. However, say the experts at All Pro Cleaning Systems, deciding between self-managing or hiring external expertise does require comprehensive financial analysis.
Internal Labor Costs
For organizations maintaining their own facilities staff, labor comprises the largest expense. Salaried managerial roles like facility directors and department heads carry six-figure price tags with benefits included. Hourly trades workers, custodians, landscapers, and security officers also tally up. Worker’s compensation, training, HR management and other labor overhead expenses factor in as well. Just a couple dozen in-house personnel keeping a moderately sized building running easily reach several hundred thousand dollars annually.
Outsourcing can significantly reduce labor outlays. Facility management companies achieve economies of scale by servicing multiple clients with the same crews. Providers also offer flexible service levels to add or reduce headcount as facility needs change. Organizations only pay for the work they require versus carrying excess facilities staff. Service contracting also shifts benefit costs, HR duties and liability onto the provider.
Equipment and Supply Costs
Outfitting an internal facilities department with all the necessary gear, tools, materials, and vehicles to perform its duties gets very expensive up front. Organizations must purchase commercial cleaning equipment, landscaping tools, work trucks, snow removal machines, lifts, safety accessories, power tools, janitorial supplies by the pallet-load and inventory parts for repairs. Repairing and replacing equipment as it wears down further drains budgets over time.
When outsourcing, all these capital costs belong to the service provider who spreads expenses across their entire client base. Cleaning crews, groundskeepers, and technicians come fully equipped to each job. Clients avoid major equipment purchases and simply pay for consumables like cleaning chemicals and contractor bags through the management provider.
Training and Compliance Costs
Organizations employing their own facility workers must budget for safety and skills training. OSHA, EPA, and other regulations mandate training in areas like hazardous material handling, equipment operation, chemical storage, emergency response and more. Required certifications like forklift operation and applying pesticides further boost learning expenses. Non-compliance risks injury lawsuits or regulatory fines.
Professional service companies handle all mandatory training for employees. Extensive training ensures crews work safely and follow the latest protocols in their field. The management provider tracks certifications and continuing education. Clients benefit from rigorously trained staff without shouldering costs and admin burdens.
Efficiency and Optimization Savings
In-house facility departments often carry excess capacity due to lack of workload leveling across multiple sites. When demand fluctuates at a single location, managers struggle matching labor appropriately. Staff shortages lead to deferred preventative maintenance and uncontrolled overtime expenses when emergencies hit.
Facility management companies flexibly assign staff across their client network based on current demand. Extra capacity at one site offsets shortfalls elsewhere to balance workloads. Specialist teams like electricians or landscapers rotate through properties on planned preventative maintenance schedules.
Risk Reduction
Facilities management companies carry extensive insurance policies covering liabilities related to property damage, injuries, employment practices, environmental incidents, and service interruptions. Furthermore, established providers have extensive experience navigating risks associated with building operations. They implement policies and procedures designed to minimize hazards.
Attempting risk management internally requires securing adequate commercial insurance coverage for the organization’s specific facilities needs. Less experienced internal teams are also more prone to incidents that disrupt business or trigger claims. Outsourcing shifts many operational risks onto specialists better positioned to control them.
Conclusion
With careful analysis into total cost of ownership, most organizations find outsourcing facility management functions both financially prudent and beneficial to productivity. It shifts the burden of specialized operational expertise, allowing an organization to focus on its core business goals.
