Facilities Management

and
Facilities Equipment
A white paper by Martin Pickard FBIFM
based on a survey of facilities managers
February 2011

Sponsored by
In association with
Contents

Section Page
1 Abstract 4
2 Introduction 5
3 Industry outlook 6
4 Management of equipment 8
5 Equipment innovation and replacement 9
6 Compliance 10
7 Training 11
8 Conclusions 12

Appendices
i. The Survey 13
ii. The Author 13
iii. The Sponsor 14
iv. Reference Material 14

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 1 Abstract

All organisations are faced with fresh challenges in the post recession economic
climate. Facilities Management (FM) is an important sector of the UK economy and FM
operators rely heavily on a wide range of tools and equipment. This paper considers
trends within the FM market, the management required by facilities equipment and
the need for innovation and effective replacement policies. Along with compliance and
training considerations these issues are viewed in the light of a groundbreaking survey
of facility managers and the practical experience of the author. Facility managers
spend a great deal of time managing equipment and yet productivity, service and
commercial issues continue. This paper concludes that a review of equipment
strategies for sourcing, management and compliance offers an opportunity for positive
change in difficult times.

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2 Introduction

Facilities Management (FM) is a term used to describe the practice of co-ordinating

and integrating support services and the related design and operation of the built
environment. There are references to such a role and to facilities in general going
back hundreds of years but the modern and general usage of the term began in the
late 1970s.

The market that has developed to supply services to facility managers and the
organisations they serve is commonly referred to as the FM industry and many
businesses now offering a full range of FM services are known as FM companies.
Some of these contractors offer a Facility Management service while others combine
FM with the provision of facilities frontline services.

There is another market that supplies goods and services to both FM companies and
to in-house FM operators. These markets combined are a considerable size estimated
to be as much as £118.8bn in 20101; with an estimated 3.5 million jobs involved,
Facilities Management is of vital importance to the UK economy.

Facility managers have extensive remits related to the specific needs of the
organisations they serve. These include support services like catering, cleaning,
maintenance, mail room, furniture, security and landscaping alongside the
management of compliance with health, safety, environmental and employment policy
and regulation.

Delivering this complex portfolio of services relies upon the availability of a vast
assortment of equipment from ladders to leaf blowers and scissor lifts to floor
scrubbers. Facilities equipment may be as basic as a broom or as complex as a
computer. Ensuring timely access to the most appropriate tools and equipment,
making sure they are properly maintained and that they are always used in accordance
with safety guidelines is a key responsibility for all FMs and FM service providers.
Survey response
This aspect of facilities management has not been subject to the same academic
scrutiny as some of the discipline’s other competencies and yet it represents a
significant risk to the effectiveness of the FM operation in terms of both performance
and compliance. This paper sets out to examine some of the main issues involved and
seeks to identify key trends and opportunities.

The major source of reference for this paper is a comprehensive survey of facilities
managers undertaken in the last weeks of 2010 by leading equipment provider HSS
Hire. In what is believed to be the first survey of its kind, 360 facilities managers
from all sectors, public and private, responded to 24 questions about their use of
facilities equipment.

70.5% of the respondents were in-house facility managers with the remaining 29.5% In house
representing the FM industry as facilities service providers and FM Companies. Contracted
While 360 is not a large sample given the size of FM in the UK, the diversity of
organisations involved and the ratio of in-house and contracted FMs is considered to
be representative of the sector as a whole.

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 3 Industry Outlook

Margin movement in 2010 The economic upheaval of 2007–2010 is considered by many economists to be the
worst financial crisis since the Great Depression of the 1930s. Its impact on in-house
facility managers has been varied depending on the sector involved but the non-core
nature of the FM budget and its relative size within an organisation’s overheads has
inevitably resulted in a desire for cost reduction.

The FM industry has suffered from this with operating margins under pressure on all
sides, however, it has also benefited from an increase in the outsourcing of ancillary
services as organisations seek to reduce risk and to move from fixed to variable costs.
A historically expanding market has slowed significantly with MBD reporting 1%
growth during 20101.

This mixed experience is reflected in the responses to the HSS survey. When asked
Have Risen -3-4%
-1% -4-5% “By how much have your margins fallen on average over the past year?” 81.5% of
-1-2% Over -5% respondents confirmed that margins had fallen, 11.3% had experienced reductions
-2-3% of more than 5% while a fortunate 18.5% reported that their margins had increased
during the same period.

Despite falling profitability there was considerable confidence about future growth with
only 13% of respondents expecting their businesses to contract over the next two
years and 24.9% anticipating no change. The remaining 62.1% were looking forward
to growth with 10.6% expecting to grow by more than 15% in the same period.

The MBD research1 is more cautious about growth in the FM sector in 2011 predicting
Growth expectations to 2012 another 1% rise due to “the continued fragility of the economic recovery” but is more
optimistic about the next four years with forecast growth rates fluctuating between 2%
and 4%, pushing the total market value in 2015 to £135.4bn.

George Osborne’s Public Sector Spending Review (PSSR)2 offers continued mixed
fortunes to the facilities management market with proposals designed to reduce public
spending by £81bn over the next four years. Those businesses that are providing
services to government departments will be directly affected and existing contracts
are certain to come under heavy scrutiny.

There will, of course, be challenges for the FM industry in a tough procurement climate
with pressure to renegotiate existing contracts. On the other hand, the PSSR provides
Negative 5-10%
the FM and support services industry with a chance to demonstrate how effective
No change 10-15% outsourcing can be used to deliver both efficiency and effective service.
0-5% Over -5%
48.2% of survey respondents expected the public spending cuts to have a negative
effect on their business while 34.8% expected no change. Only 17% expected new
business opportunities to arise. The comprehensive spending review has delivered a
hefty dose of economic reality which hints at grim austerity for facility managers. But the
true cost, and opportunity, clearly depends on each organisation’s market positioning.

5
The strategic responses made by each organisation to the economic challenge will PSSR impact
have a direct impact on every facilities management operation whether in-house
or outsourced. If overheads are to be reduced in order to protect margins in an
organisation that is planning for growth then the FM has to achieve increased results
with fewer resources.

If serious falls in service are to be avoided this creates a demand for levels of technical
innovation and specialist expertise coupled with smart systems and processes beyond
those normally found in a generalist team. History has shown these factors to be
successful criteria in outsourced service solutions particularly when specialist services
like facilities equipment are involved.

Many organisations will adopt financial strategies which will change their facilities
Negative
management needs. Some will seek to convert capital commitments to revenue No change
costs, to reduce financial risks and to focus on core business. To do this many will Positive
rely on outsourced service solutions to improve flexibility and scalability and to reduce
uncertainty in these difficult times while demanding full open book disclosure from
their contractors.

Providers of facilities equipment will need to refocus their market offerings in order
to meet these new requirements. An intelligent response will allow customers to
concentrate on their core business while those specialist providers who have the right
commercial structure will be better suited for investment in new equipment and to offer
services like real-time asset registers and 24hr help desks.
Professionalism increase required?

FM companies and other heavy users of facilities equipment like grounds maintenance
contractors and cleaning businesses will expect their equipment suppliers to help
them to manage contract churn more efficiently by only paying for tools when they use
them and to assist with the responsible disposal of redundant equipment as well as
carrying the assets on their own balance sheets.

These expectations are confirmed by the survey. When asked “In general do you
feel that there is a need for the providers of FM services to increase their level of
professionalism?” a massive 88.8% answered yes. This could be interpreted as a
major criticism of the FM industry but more likely reflects changing needs due to
market conditions and a desire for the experts to provide new solutions.
Yes
No

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 4 Management of equipment

Why not outsource? The management of facilities equipment is a key role that impacts upon the availability,
reliability, cost, compliance and performance of a vital resource. Facility managers are
notoriously busy people but nearly half (45.4%) of those asked estimated the amount
of time their service managers spend on equipment management to be more than
10% while 7.2% thought it would be more than 30%.

A significant number of facilities people are therefore spending a day or more a week
managing equipment despite the fact that the number of facility managers who
procure and own all of their own equipment was less than 25%. 8% were leasing and
more than 50% had a mixed solution. 14.5% had outsourced the whole thing showing
that FMs are well aware of the benefits of outsourcing non-core activities when the
market provides the right solution.

Convenience Contract The responses from those not outsourcing their equipment maintenance were
Special Unaware
interesting. Of those who gave their reasons, 61.7% cited the security and
convenience of ownership, 18.9% felt they had specialist equipment needs that an
outsourced provider could not satisfy, 11.3% cited contractual requirements to provide
new kit and 8.1% were not aware that outsourcing was an option.

This is despite well established equipment brands developing sophisticated service

offerings that address all of these points. What could be more convenient than
guaranteed availability of whatever kit you need, wherever you are and replaced with
new or fully maintained equipment when you need it?

Equipment related problems The contract requirement response is particularly telling. These are presumably service
providers required by their clients to purchase new equipment at the start of a new
contract. They will make the capital investment which they will then recover from
the client over the life of the contract. In such financial arrangements clients must
achieve true transparency in an open book contract to avoid over-recovery. There are
opportunities here for both clients and FM providers to review current practices in
pursuit of greater efficiency and reduced risk.

Although most respondents were not managing the equipment themselves, the vast
majority (86.2%) were confident that preventative maintenance regimes were in place
for their equipment. The remainder, reliant upon reactive maintenance and repair only,
were presumably prepared to accept a degree of downtime and lower reliability levels.
0-10% 31-40%
Despite these high confidence levels, service issues caused by equipment failure
11-20% Over 41%
21-30% are widespread with more than 40% reporting incidence of more than 21%. If
maintenance regimes are in place this suggests that they are ineffective, that machines
are being used for inappropriate tasks or that operators are not being properly trained.

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5 Equipment innovation and replacement

From the survey it would appear that facility managers are retaining equipment for Replacement
lengthy periods. 38.4% are only replacing equipment as and when it fails which may
lead to unnecessary downtime and possible service failure. Some of this may be the
result of FM service providers extending the use of equipment rather than replacing kit
in the later years of a longer contract.

Inevitably some of this will be the result of decisions taken to postpone capital
investment during the economic crisis. More than half of survey respondents (52%)
admitted to keeping equipment beyond its useful life as a result of the recession.
For many, such a gamble will have paid off; although nearly 25% admitted to losing
productivity due to the age of their equipment.

Once again this highlights the frustrations that clients feel when their service
Annual 5 years
providers fail to deliver professional and innovative service based on best practice to 2 years Over 5 years
resolve changing needs. Indeed fewer than half (48%) of facility managers asked felt 3 years Until it breaks
that their equipment suppliers provided innovative solutions to these challenges in 4 years
their market area.

Innovation is highly desirable in facilities management where constant change, variable

external influences and pressures on cost, quality and timeliness are ever present
features. It has become increasingly popular to include a requirement for innovation in
tender documents and performance management regimes. The choice of equipment is
an area where true differentiation can be achieved by intelligent bidders.

The speed of technological development is fast and one of the effects of every
recession is to accelerate the pace of change as the pressing need for greater
efficiency and improved effectiveness drives the market. Improved battery life, reduced
energy consumption, greater productivity and more effective performance can all be
delivered by the latest models produced by cleaning, maintenance and other facilities
equipment manufacturers.

Innovations like lighter, cordless and silent vacuum cleaners are revolutionising
cleaning operations for many facilities organisations enabling day cleaning with full
time dedicated staff and an improved focus on quality and service. New eco lighting
rigs, portable access platforms and state-of-the-art power tools using the latest battery
technologies are all being used to support the most efficient facilities operations.

Frustrated clients often report that an approach to innovation promised in tender

documents is not realised through the life of a contract. Organisations seeking
a serious contribution from their facility management are interested in a level of
continued and guaranteed improvement over time. Performance improvements in
terms of customer satisfaction, quality of service, environmental performance and,
of course, bottom line costs are highly desirable for all organisations in today’s
commercial environment.

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 6 Compliance

Relevant Legislation Health and safety in the workplace is a critical issue. There were 152 fatal accidents
The Supply of Machinery (Safety) Regulations 2008 in Great Britain in 2009/2010 and 233,000 reportable injuries. 5.1 million working
days were lost due to workplace injury3. The use of equipment in the workplace can
Health and Safety at Work etc Act 1974
increase the risk of accidents and must be carefully managed.
Electrical Equipment (Safety) Regulations 1994

Lifts Regulations 1997 Employers must assess the suitability of tools and equipment for given tasks. They
Equipment and Protective Systems Intended for Use in
must operate a maintenance scheme and training programme and they must ensure
Potentially Explosive Atmospheres Regulations 1996 that they keep equipment secure and safe. Because of the risk involved there is a
Gas Appliances (Safety) Regulations 1995 raft of legislation that needs to be taken into account regarding the supply, use and
maintenance of equipment in the workplace.
Pressure Equipment Regulations 1999

Simple Pressure Vessels (Safety) Regulations In the survey 82.7% of respondents were confident that all of the equipment they
The Cableway Installations Regulations 2004 were using is fully compliant with all of these regulations although only 76.5% were
confident they could prove their compliance if required to do so immediately and
Personal Protective Equipment (EC Directive)
Regulations 1992 31.6% were concerned about the likelihood of prosecution.
Provision and Use of Work Equipment Regulations 1998
Contrary to myth the Health and Safety Executive (HSE) does regularly prosecute for
Lifting Operations and Lifting Equipment Regulations 1998 breaches of safety regulations. In 2009/10, 1,033 offences were prosecuted by the
Dangerous Substances and Explosive Atmospheres HSE (and the Office of Rail Regulation), with a further 287 offences prosecuted by local
Regulations 2002 authorities. 15,881 enforcement notices were issued by all enforcing authorities3.
Electricity at Work Regulations 1989
There were 45 prosecutions under the Provision and Use of Work Equipment
Gas Safety (Installation and Use) Regulations 1998
Regulations in 20103. Fines for the most serious safety breaches are now routinely in
Pressure Systems Safety Regulations 2000
the hundreds of thousands of pounds. Coupled with the need to pay not only your
Personal Protective Equipment Regulations 1992 own legal costs but also the prosecutions, non-compliance with health and safety law
is a costly exercise

Ensuring that proper testing is carried out is vital. Most respondents (68.4%) had
outsourced this activity. Whoever does the work it is important that maintenance and
inspection records are up to date and readily accessible. The leading outsourced
In 2010 a communications company was fined service providers have state of the art systems and processes to ensure this.
£300,000 with costs of £196,150 following the
death of a worker who fell from a ladder. The HSE
investigation found a number of issues including Employers should conduct robust risk assessments covering the set-up, use and
a failure to provide suitable access equipment for maintenance of tools and equipment at work. The risk assessment process must
work at height and failure to carry out equipment
inspections. Falls from height remain the most
identify the environments in which workers will use the tools and equipment, any
common cause of workplace fatality. local conditions that may affect safety and how the workers will actually use each
item in practice.

The assessments will also show what information employers must make available in
the form of posters, signs and user guides. By limiting risks in this way, employers
In 2009 a hospital was fined £8,000 plus costs of have some control over potential hazards.
£8,466.71 after pleading guilty to breaching both
the Electricity at Work and the Management of
Health and Safety at Work Regulations when a
Risk reduction measures like machinery guides, warning devices, personal protective
worker suffered severe injuries whilst operating a clothing and maintenance routines keep the issue of safe use and maintenance to
steam cleaner. The hospital had failed to follow the the front of everyone’s minds. It is important to remember that employees also have a
manufacturer’s instruction concerning the use of a
Residual Current Device with the cleaner. duty to handle tools and equipment safely and to stop using any item immediately if it
requires maintenance or repair.

All of these activities can now be sourced from equipment providers, reducing the
burden on the facilities management team. Responsibility for health and safety
compliance cannot be outsourced and the client remains accountable so it is
important to have full confidence in the expertise of anyone providing such services.

9
7 Training

Well considered risk assessments should inform decisions about the training of Training & paperwork?
equipment operatives. It is vitally important that any worker using equipment that
could present any kind of risk to themselves or others is properly trained in its use and
that this training is properly recorded. 90.3% of survey respondents said that their staff
had been trained to operate the equipment they used but only 70% were confident
they could produce written evidence of this.

Training is not just about compliance. In activities like cleaning and grounds
maintenance, ineffective operation of equipment can dramatically affect the
performance of some machines. The poor results are often blamed on the equipment
when additional or better training would actually improve the end product in the way it
was designed.
Yes Not sure
Equipment suppliers should provide an appropriate operating manual on delivery and No paperwork No
supervisors should study this carefully to consider implications on working practices.
Many providers will offer expert advice and equipment demonstrations at the
customer’s premises to support this. On-site training of assigned operators is much
more effective than classroom training and can prove more cost effective as well.

This issue appears to be well understood by facility managers with 64.3% affirming
that more training would increase the productivity of their workforce. Professional
trainers can make a difference to the impact of training and many organisations
outsource some or all of their training for this reason. 25.8% of respondents did
not outsource any of their training activities. This figure will include some larger
organisations with in-house training teams but one suspects that others are sacrificing
the benefits of proper training in pursuit of short term savings.

A typical organisation’s investment in training and development increases each year as

experience shows that companies that spend more on training produce considerably
more profit per employee. However, although corporate managers recognise the
benefits of human-capital management and its impact on productivity and safety, it
can be difficult for training teams to find better ways to deliver tangible, measurable
value to the organisation.

“What is questioned, and should be questioned even more strenuously, is whether

(in-house) training organisations as operated today can deliver the kinds and
quality of training—on time, on budget, and on target—that will consistently drive
bottom-line results,” write Edward A. Trolley and David van Adelsberg in their book,
Running Training like a Business4

Some organisations will elect to revamp their in-house learning departments by

themselves so that training reflects business strategies and productivity goals. But an
increasing number of companies are outsourcing their training needs to specialists
who can connect training to operational objectives at lower costs and with greater
flexibility and efficiency.

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 8 Conclusions

This exploration of the issues involved in facilities management and facilities

equipment and the useful data provided by the HSS survey confirms the author’s
opinion of the importance of a considered strategy for the sourcing, management and
operation of equipment.

The FM community view of the post recession climate is less negative than in other
sectors with many predicting growth and some poised to benefit from an increase in
outsourcing in the wake of the public sector spending review. However most are being
forced to work harder, with 60% saying that margins have been hit.

Emerging from a recession is a critical time for companies and it is at this time
more than ever that management need to concentrate on their core business and
proposition. Fixed costs and capital investment are unpopular with businesses
under pressure. Outsourcing is attractive in such circumstances but FM clients lack
confidence in the professionalism of some providers and will avoid those they believe
cannot offer a comprehensive service.

The majority of FMs do see benefits in outsourcing with less than a quarter buying
all of their own equipment. Despite this, equipment is still consuming a lot of
management resource and equipment related service issues are far too common.
Equipment is being kept beyond its useful life as a result of the recession by those
who have retained ownership while those who have outsourced have less exposure to
the problems that creates.

Compliance issues and the need for effective training reinforce the importance of
developing an appropriate facilities strategy with a professional provider. Specialist
knowledge, technical innovation and solution driven commercial products are
increasingly required by equipment users and the facilities supply chain must
respond accordingly.

Every aspect of the FM paradigm must be carefully scrutinised in difficult times.

Facilities equipment is one of the less glamorous aspects of the discipline and has
suffered from this in the past. However it is clear that many prudent facility managers
are engaging successfully with leading equipment providers to develop new strategies
in support of corporate objectives.

Facility managers and FM companies faced with financial pressures, performance

issues or compliance worries who have not reviewed their equipment strategies for
several years would be well advised to take a fresh look at this critical area.

Martin Pickard
February 2011

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Appendices

i. The Survey

The survey, believed to be the first of its type in the UK, was commissioned by
HSS Hire, the national supplier of tool and equipment hire and related services. It
consisted of 24 questions that were put on the specialist website, Information Facilities
Management (i-FM.net) for a six week period ending in mid-December. i-FM.net is read
and followed by a mix of both in-house and contracted facilities managers and this
was reflected in the diversity of response that the survey attracted, both in terms of
organisation and individuals. The number of individuals completing the survey totalled
360, with 29.5% employed by FM specific businesses, with the remaining 70.5% of
respondents working for FM functions within larger organisations.

ii. The Author

Martin Pickard FBIFM

Martin Pickard is the Principal of The FM Guru Consultancy and an award winning
consultant, journalist and trainer, Martin is a facilities management professional with
40 years’ experience in all aspects of property and business services provision. His
career includes a variety of corporate property, project and facilities roles in the UK
including long periods with BT and Cellnet. He has also held boardroom positions with
a number of FM consultancy and contracting organisations working all over the world
for major customers from both public and private sectors. He now operates a portfolio
of business interests in FM training, consultancy and interiors.

Martin is a Past President of the IFMA UK Chapter and a Fellow of the BIFM and was
twice winner of their Award for Excellence in FM Journalism. Known to many as The
FM Guru, Martin is a regular contributor to several business magazines and speaks
at conferences and seminars all over the world. In 2008 he was named as one of the
20 FM Pioneers who made the most impact on the development of FM over the last
thirty years.

Email: [email protected]

Address:
Unit 5 Water Hall Farm
Wavendon Road
Milton Keynes
MK17 8AZ

www.fmguru.co.uk

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 Appendices (continued)

iii. The Sponsor

HSS Hire Service Group is a UK-based, national supplier of tool and equipment hire
and related services. It has been serving big businesses, trade and DIY customers
since 1957 and is dominant in the ‘maintain and operate’ sectors with many
customers directly or indirectly involved in facilities management, maintenance,
refurbishment, fit-out as well as build. The company also runs a dedicated training
division and offers a range of innovative hire related services including HSS LiveHire,
HSS Outsource and HSS Onsite.

HSS Outsource provides bespoke managed equipment plans to customers seeking

to benefit from a move from fixed to variable costs, the minimisation of capital
investment, equipment innovation and guaranteed compliance. The solution provides
all the benefits of ownership with none of the responsibility and delivers an advanced
planned preventative maintenance regime, real-time asset management and rigorous
reactive service level agreements supported by the HSS network. HSS Outsource is
operational with organisations across the UK including those in both hard and soft
service facilities management. HSS PitStop provides the same benefits for those
operating mobile fleets.

In 2009 HSS launched a revolutionary online management system, HSS LiveHire,

which allows its customers real time tracking and visibility of equipment they have on
hire. This is a central part of a commitment to being industry pioneers - championing
transparency, integrity and ‘the true cost of hire’.

Operating under the banner of HSS Hire, the group has an established nationwide
network of 232 locations including a number of supercentres with extended opening
hours. Operated using a ‘hub and spoke’ approach and supported by a vast fleet
of liveried vehicles, the network ensures the best possible national distribution and,
therefore, customer service.

HSS was both the Hire Association Europe and Contract Journal Hire Company
of the Year 2009. In 2010 it was awarded the HAE’s ‘Excellence in Customer Care’
award and Highly Commended by the European Rental Association. HSS Hire is
ISO9000, ISO14001, OHSAS18001 and SAFE-Hire certified and holds Investors in
People status as well as a 4 star British Safety Award.

To download the survey and for more information on HSS and the HSS Outsource
service, please visit www.hss.com/outsource

iv. Reference Material

1 MBD UK Facilities Management Market Research Report – Dec 2010

2 HM Treasury Spending Review 2010
3 Health and Safety Executive Statistics 2009/2010
4 Running Training Like a Business (Berrett-Koehler, San Francisco).

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