Lack of Facilities Management Could Cost UK Business Nearly £1billion

RICS research highlights the business cost of ineffective facilities management

Research released today suggests that UK businesses could be losing out on savings of nearly £1 billion*, as a result of their failure to adopt a more effective approach to facilities management (FM)**.

Conducted by the Royal Institution of Chartered Surveyors (RICS), the research found that around 26% of organisations in the UK are still not taking a strategic approach when it comes to FM – a business discipline that involves the co-ordination of space, people, resources and property within an organisation. It suggests that those organisations using FM in a strategic capacity could be saving themselves as much as £120,000 on average.

As a result of its findings, the RICS suggests that a reluctance to invest in, and embed a dedicated FM programme within an organisation – an approach it calls ‘Strategic FM’ (SFM) – means that many businesses and public sector organisations could be missing out on huge cost saving opportunities.

The research conducted with 707 small, medium and large organisations from across the public (203) and private sectors (504), also shows the positive impact SFM has on those organisations that already adopt the approach. Half of those interviewed who use SFM said that it has saved their organisation money – with many of those in the private sector reporting the positive impact it has had on their profitability (39%) and turnover (48%).

What’s more, of those questioned who use SFM, three in five (59%) said that their organisation had seen an increase in overall productivity, with 49% saying that the attractiveness of their organisation to clients or customers had been boosted by it. In addition, around a fifth (21%) said that employee absence in their organisation had decreased as a result of SFM.

Of those questioned specifically in the Government sector, the tangible benefits of a more strategic approach to FM were even higher with 70% of those respondents that use SFM saying that they had seen an overall increase in productivity, with a further 71% stating that they had also seen an increase in employee engagement.

Johnny Dunford, Global Commercial Property Director at RICS, said:
“It’s clear from our research that recognising FM as a strategic discipline has the ability to bring about tangible business benefits for organisations of all shapes, sizes and sectors. With nearly £1 billion being wasted by those organisations without SFM in place, our research clearly demonstrates that more needs to be done to get leaders in the private and public sectors on board with the new approach. By recognising FM as an important strategic discipline, businesses could reap the huge business benefits it promotes.

“To support professionals in developing SFM in their own organisation, RICS has developed a valuable suite of information, resources and services which includes our recently launched SFM Guidance booklet and accompanying Case Studies booklet. What’s more, the RICS is helping to professionalise the FM sector through its Chartered Facilities Management Surveyor (MRICS) and Associate (AssocRICS) qualifications.”

To accompany their findings and to support professionals in implementing SFM in their own organisation, the RICS has developed a series of top tips.

1. Ensure that you are fully aware of your organisation’s overall mission statement and business objectives with a view to developing an SFM approach that supports in their delivery.
2. Put measures in place to capture accurate data which will enhance strategic decision making when it comes to FM – data on operating costs, repair costs, utilisation levels and environmental performance are key.
3. Ensure that FM is represented at a strategic level when organisational policies and frameworks are being developed – this will ensure that the right facilities can be provided in the right locations at the right cost and quality, supporting organisations in meeting key objectives.
4. Use internal communications networks to get a view of the operational requirements of your organisation and build relationships with key operational managers who can help you deliver an effective FM strategy.
5. Access the abundance of resources, information and qualifications that are out there – all geared towards the professionalising of FM and enhancing of its vital importance as a strategic discipline.