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Originally published in Interiors & Sources

01/01/2011

Smaller Budgets and Rising Costs Shape the Industry in 2011

FMs adapt to the changing demands of the marketplace

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  • Smaller Budgets and Rising Costs Shape the Industry in 2011

    Smaller Budgets and Rising Costs Shape the Industry in 2011

    /Portals/1/images/Magazines/0111/B_0111_Outlook1.jpg

    Most respondents reported relative stability in their 2011 budgets, but those who saw increases reported that the growth of their capital budgets outpaced that of maintenance funding. A substantial percentage of survey respondents will deal with a smaller budget in 2011, leading them to place a major focus on issues related to funding and ongoing expenses, from aging facilities to higher costs for critical supplies and new sustainability initiatives.
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    Smaller Budgets and Rising Costs Shape the Industry in 2011
  • Smaller Budgets and Rising Costs Shape the Industry in 2011

    Smaller Budgets and Rising Costs Shape the Industry in 2011

    /Portals/1/images/Magazines/0111/B_0111_Outlook2.jpg

    Smaller Budgets and Rising Costs Shape the Industry in 2011
  • Smaller Budgets and Rising Costs Shape the Industry in 2011 Smaller Budgets and Rising Costs Shape the Industry in 2011

    Smaller Budgets and Rising Costs Shape the Industry in 2011

    /Portals/1/images/Magazines/0111/B_0111_Outlook3.tif

    Respondents favored short payback periods and lower costs when implementing sustainability initiatives in their organizations.
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    Smaller Budgets and Rising Costs Shape the Industry in 2011
  • Smaller Budgets and Rising Costs Shape the Industry in 2011

    Smaller Budgets and Rising Costs Shape the Industry in 2011

    /Portals/1/images/Magazines/0111/B_0111_Outlook4.tif

    No respondents reported a decrease in funding for security and life safety measures, a reflection of today’s priorities.
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    Smaller Budgets and Rising Costs Shape the Industry in 2011

Facilities managers are performing on a balance beam this year.

Shrinking maintenance budgets and rising costs for energy and materials contrast starkly with growth in sustainability initiatives and building renovations and repairs, according to a survey of 339 BUILDINGS readers. In a nutshell, many FMs plan to do more with less.

While 43% of respondents report that their 2011 maintenance budget is the same as their 2010 budget, 35% see a decrease. Couple this with many respondents’ predictions for higher costs in critical areas, and it’s clear that many are working harder to maintain the balancing act. A whopping 75% of respondents anticipate higher prices for materials and supplies, and 71% see the same for energy prices.

While respondents report that capital budgets are more stable than maintenance budgets for 2011, it’s clear that funding and expenses will be the immediate focus of many for the near future, along with aging facilities and sustainability.

New Demands
Yesterday’s state-of-the-art facilities are starting to show their age, requiring more maintenance and replacement for building systems losing their effectiveness. Combine these with an ever-growing emphasis on sustainability and efficiency, and you’ve got a marketplace sure to challenge even the most seasoned facilities manager.

That’s why tomorrow’s leaders must radically reshape their perceptions of what it means to be an FM. It’s not just fixing what’s broken – it’s taking a proactive, progress-motivated stance. Sustainability, for example, requires a new attitude – viewing it as a necessity, not an option, the same way you look at ADA compliance.

"It has to be how you operate on a daily basis," says James Bechard, an IFMA member and professor of facility management at Kitchener, ON’s Conestoga College. "Knowing what you have, making sure it works right, getting it on, getting it off when you don’t need it. Too many people are looking for this magic bullet in sustainability – it’s not there. It’s basic common sense."

Small common-sense fixes top survey respondents’ lists of sustainability improvements that are funded for 2011. At 58%, waste reduction and recycling programs are most frequently cited, followed by lighting retrofits (55% say their organization will fund these), other energy management retrofits at 51%, and reusing materials and supplies at 41%.

Respondents described projects ranging from energy-efficient relamping to a recycling competition.

"Lots of little adjustments to green up our buildings and improve value for the energy dollar spent," wrote another. "Keeping up 100% with exterior appearance is paramount for attracting new tenants in this tough market."

The broad categories of deferred maintenance and aging infrastructure become part of an ongoing discussion about incorporating life cycle information and risk analysis, says Joe Samson, professor of architecture and facility management at Ferris State University in Big Rapids, MI.

About 38% of respondents say deferred maintenance will grow over last year, while 48% predict no change in this area. Only 14% see an improvement in deferred maintenance during 2011.

"What happens if you do not maintain the carpet, vs. what happens if you do not maintain the roof?" Samson adds. "The roof is more critical over the intensive care area of a hospital than over an office area. The area of the facility where the system is located, the age of the system, and what happens if the system fails are considerations."

New Skills
Leadership and communication skills are becoming more vital for FMs, according to Kathy Roper, assistant professor and IFMA Fellow at Georgia Institute of Technology and a co-author of The Facility Management Handbook. Those skills are necessary to underline the value that FMs bring to their companies strategic interests.

"The strategic focus is much more important, more of a focus on being a business partner rather than just responding to the technical requests," Roper says. "I think the facility manager is looked to as an expert on ‘How do we make this tool that we call the building or the office more valuable to our organization?’"

Learning to advocate for facilities projects will be critical, Bechard adds. Speaking the executives’ language and showing them the value of early action will increase the odds of success.

"If I double my insulation, what’s the capital cost increase versus the operating cost savings?" Bechard says. "It’s huge for the operating cost savings, but people don’t tend to look at it that way. If we do LEED Silver, do we get a savings in operating costs or do we just get a plaque?"

A different way of communicating the same information can provide better outcomes, Bechard says. Tout your accomplishments to senior management and "get into the boardroom," as Samson puts it, where the FM department can play a bigger role in decisions.

"FM and the people in it don’t sell what they do as a positive," Bechard says. "I’ll give you the example of a friend who works at the Royal Bank of Scotland. All their facility stats used to be communicated to senior management as failure rates, like an escalator had a failure rate of 0.4%. Why not say it has a success rate of 99.6%?"

New Generation
This new outlook must be the cornerstone of FM education, Roper and Bechard agree. As the pace of change accelerates, tomorrow’s FMs must be well-rounded generalists able to adapt swiftly to the drop of a new method’s hat.

"Tracking things like space use and energy use through benchmarking will become more widespread and emphasized," Samson adds. "Like in most other fields, the ability to use instinct and intuition will not be appreciated as much as it was in the past."

Staff skills and needed training were a sore point for a handful of survey respondents, several of whom described increased outsourcing and the retirement of skilled professionals as issues that would have the largest impact on their FM departments in 2011. "The technology of building care and HVAC control increases each year, and I am extremely limited on the staff capable of taking things to a higher level," one respondent wrote.

Responding to these training and skill issues, IFMA conducted a global study aimed at updating the core competencies and knowledge areas required to earn IFMA credentials and continuing education credits. The organization subsequently added two new competency areas: Technology and Environmental Stewardship & Sustainability.

But with only a handful of North American schools offering IFMA-accredited FM degrees – including just one in Canada, Conestoga College – the options are few for college-bound students wanting to prepare for the field. Moreover, not enough young people choose facilities management to make up for long-time managers about to retire, forcing companies to turn to other industries, such as construction, engineering, and architecture, to find professionals with relevant experience, if not a general FM education.

"Bringing in young professionals is the first priority for APPA members because so many of their facilities professionals are leaving soon," says Jeff Campbell, chair of the facilities management department at Brigham Young University in Provo, UT. "They don’t know how to meet that demand. I started in the shops as a technician, then I moved into management. You can’t work there for 20 years and then move into management – that’s the old model. APPA is seeing that in a big way."

Spending freezes after 9/11 and during the recent recession slowed the influx of FM professionals, Roper adds, leaving few mid-career managers to cover the gap until today’s students enter the workforce. Retraining professionals who have experience in architecture, interior design, and engineering could also inject some needed personnel into the field, Samson says.

Application for IFMA credentials is on the rise, according to says Brenda Varner, the program manager of IFMA’s education department. Adding the extra skills necessary for new credentials could help the existing FM workforce become more flexible and able to cover more ground until new professionals can enter the field.

"There’s lots of room there for various levels of personnel with different levels of skill," Varner says. "There’s a huge uptake of people getting credentials to improve their lot in life, which I think is fantastic. They’re getting the education they need to get those higher-level jobs, and one day they will be responsible for the real estate portfolio."

Demonstrating the appeal of facilities management to the next generation is vital, but making it easier to enter the field is a whole new ballgame, Bechard says. More opportunities will lead to more FMs.

"To drive FM, we’ve got to understand a little better what it’s actually about and have more of a basic education," Bechard says. "We need a broadening of the educational tree to get there."

Janelle Penny (janelle.penny@buildings.com) is associate editor of BUILDINGS and Chris Olson (chris.olson@buildings.com) is chief content editor of BUILDINGS.  

 
 

 
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