Weighing the benefits and risks of outsourced FM

Outsourced facilities management isn’t any more complicated than it sounds: it simply refers to transferring FM responsibilities and decision-making powers to a third party, rather than keeping it in-house. If managed effectively, this can result in substantial efficiency savings through economies of scale. But there are dangers, too, so companies considering the value of outsourcing ought to ensure it’s the best option for their facilities operation.

What are the benefits of outsourced FM?

As far as the board is concerned, one of the biggest advantages of outsourcing your facilities management provision is cost. A subcontractor will be able to offer a competent, expert service at a better rate than keeping it in-house, which will in turn give you more flexibility with your budget and reduce overheads. You’ll benefit from cost-efficiencies on labour, equipment and materials.

If you outsource all your facilities management to a single company, you’ll benefit from increased efficiency, as all your FM services will fall under a single team. You will then be able to redirect funds to essential activities and away from providing FM support. This might be the case not just for maintenance and building management, but also for IT and related services.

Subcontractors will typically be specialists in their fields. They will come from, for instance, a company whose core business is maintenance, and will therefore be focused on understanding compliance, innovative ideas and processes and industry best practice. If you’ve picked the right company to outsource your services to, you’ll be drawing from a deep well of expertise—one that your staff and in-house FMs can also benefit and learn from.
And this expertise can be utilised in a much more flexible manner. For example, outsourcing will enable you to bring in and release resources according to seasonal or cyclical demands; it will also leave you less susceptible to staffing changes and long-term sick leave.

What are the risks of outsourced FM?

But external subcontractors pose some of their own risks, in spite of the considerable potential benefits. Many of these negatives arise from the organisation outsourcing the duties believing it has also relieved itself of its legal responsibilities, particularly those concerning compliance and health and safety.

In fact, overall responsibility still ultimately resides with the subcontracting company. It must, for instance, ensure the subcontractor is compliant with existing regulations, has performed risk assessments and has evidence of competence in the necessary tasks. Your firm cannot wash its hands of liability if your subcontractors suffer an accident on the job. In addition, it is your responsibility to ensure effective communication, and monitor the subcontractor to identify any potentially dangerous situations and swiftly remedy them.

In addition, outsourcing FM means you’ll experience a loss of managerial control. The subcontractors will not be driven by any investment in your company, but by the desire to make a profit out of you. It’s an unavoidable situation, but the lack of control may pose problems down the line

Should you outsource your FM?

Outsourced FM isn’t for everyone. Before you do  it, you need to consider several factors: firstly, whether the task can be handled efficiently in-house; secondly, whether the costs of outsourcing are substantially lower than keeping it in-house; and thirdly, whether the task in question is seasonal or temporary.

Seasonal tasks, for instance, might be better served by outsourcing to an expert subcontractor that can provide a more efficient service, rather than hiring—and paying—an FM team that would remain inactive throughout the rest of the year. However, keeping the service in-house may be more appropriate if the task supports your core product.

In many cases, the advantages of outsourcing are significant and far outweigh the risks. For specialist tasks and seasonal services, and particularly for smaller firms, they can often be a no-brainer, and help you deliver a more efficient and cost-effective