Happy New Year? – FM insights from Elliott Chase

A new year is traditionally a cause for celebration, marked by optimism, determination and positive thinking. How long all that lasts, of course, is another matter. And this year there’s a question mark over whether any of it even gets started.

If you follow the news – and it’s hard not to these days – you may feel that January 1st 2019 is not a great deal more than simply a calendar event. Where’s all that optimism and determination? Great if you feel some of it personally; but it’s tough being enthusiastic in the face of things like this, released just after Christmas by the Institute of Directors: Business leaders’ confidence sinks to lowest point in 18 months. Or any number of other news headlines – Google ‘UK business confidence’.

As a market indicator closer to home, there’s our Top 50 listing of UK FM service providers. 17 companies in our Top 50 – that’s a third of the total – reported losses in their most recent filings. There are a variety of reasons for this: one or two are feeling the effects of growth by acquisition; and one or two are in the midst of multi-year transformation programmes; but most – and in reality probably the majority of companies in our marketplace – are, in one way or another, dealing with ‘challenging conditions’.  There are good insights into these challenges, the implications and how companies can tackle them in our latest annual Trends & Opportunities report.

Reviewing service providers’ annual statements, as we do in conjunction with our regular Top 50 updates, reveals remarkable consistency in the risk areas highlighted by company directors. A typical list includes:

  • Strong competition (chronic in FM, but seemingly particularly intense these days)
  • Price pressures (cutting, or at least capping, costs remains a top driver for service buyers)
  • Employment costs (everyone’s for a fair wage but even government-mandated minimum pay is problematic for some companies)
  • Brexit (which means uncertainty about the future, coupled with already-happening impacts on costs and labour supply).

Those are universal concerns in this industry, and of course well beyond it, too.

Sure, there are plenty of interesting things happening in the FM sector, and they should ring in as positives. There’s the broad stability of the marketplace, thanks to the demonstrable benefits of outsourcing as a business strategy. There’s the changing nature of work and workplaces, along with the intertwined rise of technology, which opens up new options and opportunities. There’s BIFM’s reinvention of itself as IWFM, which could drive the discipline into some new places and greater professionalism.

But all the positives face their own ‘challenging conditions’ as the economic and political pall hangs over both the FM industry and the industries of FM’s clients. As a general rule, cost pressures are on, strategies emphasise caution, and decisions are delayed if not put aside.

What can we hope for? A quick and widely accepted solution to the Brexit mess would be nice. That might open the door to focusing on some of the other economic, political and social issues hovering in the background both at home and abroad, where our friends’ and neighbours’ problems might come to affect us too.

How hopeful should we be? You must make your own decision on that one – but we can help. February’s Workplace Futures conference is all about building a successful FM business. What can you learn from how others in this industry see the marketplace, its challenges and its opportunities? What can you take away from that and use in your own business? We’ve put together a strong panel of speakers comprising top industry observers and practitioners. Join us on the 5th – it will be a positive move towards ensuring your own happy new year!  Find out more here.

 

The Author

Elliott Chase
Managing Editor, i-FM
elliott@i-fm.net