A Brief Introduction to Facilities Management
An essential guide to the key facts & figures
What is facilities management?
Every organisation relies on a mix of functions and services to provide the support essential to its core business operations. Ensuring that this support is available in the right form, at the right quality and for the right cost is the domain of facilities management.
Facilities managers, in essence, look after all the stuff that keeps an organisation up and running. They work in all sorts of environments - from offices, hotels and hospitals, to sports and leisure arenas, logistics centres, care homes and educational establishments including primary schools, universities and specialist research laboratories. Despite that broad spread, however, discussion of facilities management often defaults quickly to what goes on in commercial office environments. That is not generally a problem, though it is important to remember that the precise facilities management role is likely to be shaped quite significantly by the nature of the organisation in question.
Facilities management (or facility management, as it is often referred to outside the UK) is well summarised in the emerging set of ISO standards for the discipline:
an organizational function which integrates people, place and process within the built environment with the purpose of improving the quality of life of people and the productivity of the core business.
Facilities management is important because it ensures a safe and comfortable work environment for people. A good workplace makes people feel well, energised, productive and enthusiastic about their work. It will make them want to come to work and perform well once they’re there. A poor workplace, by contrast, frustrates work, inhibits people’s productivity and can even make them sick. The workplace is also the physical manifestation of an organisation’s brand, and many organisations use it to recruit and retain both staff and clients. In addition, concern for the employee experience is a growing trend within business and the management of the physical workplace has an important role to play in that.
What do facilities managers do?
Facilities management can be provided in-house, that is by employees of the ‘consumer’ organisation, or it can be outsourced, meaning that roles and activities are fulfilled via a contract awarded to a specialist third-party (more on this in the next section). Whether in-house or outsourced, the job of the facilities manager (or FM: the two letters are applied to both the discipline and the practitioners) is typically quite diverse.
The role varies widely from organisation to organisation, but an FM’s remit may cover a range of areas such as:
- Catering and hospitality
- Reception services
- Building maintenance (often shorthanded as ‘M&E’, mechanical and electrical services, but basically everything from ensuring the lifts work to managing the air-conditioning)
- Fabric maintenance (keeping everything from furniture to floors and walls in good repair)
- Environmental services, such as waste management and recycling
- Health and safety
- Relocations and moving people internally within a building
- Portering and mailroom.
These activities are often lumped into two categories: ‘hard FM’ and ‘soft FM’. Hard FM relates to anything to do with a building, essentially M&E and fabric maintenance, whereas soft FM is anything to do with people, such as catering, cleaning, security, health and safety etc.
What are FM’s objectives?
Facilities management is a support service, contributing to the effective and efficient delivery of an organisation’s strategic and operational goals while providing a safe and comfortable work environment on a day-to-day basis. As noted above, a good workplace helps to make people feel well, energised, productive and enthusiastic; a poor one can be frustrating, inhibiting of productivity, stressful and even illness-inducing.
Within a small business, facilities management may be part of a secretary’s or office manager’s role. As an organisation grows, FM typically develops into a discrete job role. But there comes a time when many organisations look to outsource their facilities management to external experts.
Cost control, increased efficiency and the expertise, knowledge and support gained from a specialist provider are all key benefits of outsourcing, together with the ability to free the client organisation to devote more time and attention to its ‘real’ – or core - business.
But whether we are talking about in-house FM or outsourced, the broad objectives remain the same – centring on the concept of the right services, delivered at the right quality and for the right cost (all as defined by the client organisation).
What are the procurement options?
The primary responsibility for an FM is providing and managing a range of services to his or her 'customers', that is, the employees within the organisation. Increasingly, some or even all of these services are outsourced; in other words, purchased from and delivered by external suppliers – a practice that has grown and developed in parallel with the rise of facilities management over the past 30 years or so. (Note that ‘facilities management’ describes both a management discipline and a service supply industry.)
From a starting point of single-service contracts (typically, maintenance, cleaning or security), each handled by a specialist supplier, the outsourcing concept broadened over the years to encompass 'bundled’ services - cleaning and security, for example, delivered by a supplier with skills and resources in both areas. More recently, contractors - especially the larger ones - have sought to bring multiple service lines together in 'integrated' packages, promising greater efficiencies and reduced management costs for the client. Integrated FM has since become a key offer in the market and a significant sub-sector in its own right.
'Total facilities management' is another alternative, in which the provider takes on responsibility for the delivery and management of all required service lines. TFM solutions can be sourced from FM specialists or from diversified contractors, who will generally meet as much of the need as possible from their own resources. The TFM label demands a bit of caution, however, as there is no standard definition and it is used in different ways by different companies.
An alternative service supply approach is offered by some FM providers who focus specifically on the management of services that are delivered by others working as sub-contractors. This once-common approach, generally referred to as the ‘managing agent’ model, has become less common as many of these specialists have either diversified their skill base or been bought by ambitious multi-service contractors.
Most recently the concept of the ‘FM service integrator’ has emerged into the market. In a sense, the integrator is the next-generation managing agent where the approach has been refined to implant a specialist organisation parallel to the client and its service providers in order to take the lead on integration, performance measurement and reporting – and often the technology needed to do all that in the most effective way.
So client organisations have a great deal of choice when it comes to selecting service providers and service models. It is impossible to generalise about the 'best' solution for the supply and management of FM services. That can only be defined in terms of the requirements of the specific client organisation.
How big is the market?
This is a common question and a recurring theme in the FM marketplace. Its focus is primarily on the supply side of the market - the outsourcing business – notionally taking in all the companies that provide relevant services on a contract basis. You don’t have to think about that for more than a minute or two to realise that defining the actual services to include in any measure of facilities management and identifying all the suppliers involved is hugely complex. Consequently, different researchers make different assumptions and draw on whatever data is available to reach their conclusions – which means that published figures for market size may be good indicators but may not be definitive. Caution is needed in using these figures and in comparing one figure with another.
That said, FM markets are big and generally getting bigger. Despite some ups and downs over recent years, the trend for market growth for both facilities management and its various component services has been generally upwards. Based on recent research, the current value of the UK FM market is about £120bn.
Within this vast marketplace the fortunes of service provider companies rise and fall over time as they do within any commercial market. Over the years the general trajectory within this particular market has been up, but within recent years there have been some notable exceptions. Carillion, a major construction and services group, collapsed into liquidation at the beginning of 2018 – an unprecedented event for FM and with implications for the wider outsourcing industry that are still being discussed. Several other big firms have had to work hard on transformation strategies following serious financial problems, notably Mitie, Interserve, G4S and Serco. To greatly oversimplify the situation in each case, the cause of these problems was rapid growth and diversification without adequate integration and rationalisation. But the FM business in each case was fundamentally solid.
So those are the basics. If you have a question or a particular interest, try the information sources below or contact us anytime.
Sources of information
To find out more about who FMs are, what they do and how they rate their priorities, have a look at some of the reports on our Research pages.
To find out more about the structure of the FM marketplace and how it is changing, read our latest Trends & Opportunities Report.
To find out more about the leading players in the market, go to the i-FM Top 50.
To find out more about the evolution of FM in the UK, read our history of the key companies over the past 20 years.
To find out more about a specific organisation or a particular topic, use the search engine accessible from our front page.
To find out about i-FM licences and access to the site (our Lite licence is free and covers most content), click here.