Learning from the recession

Year-on-year growth, shareholder profits, and pots of funds on offer for community projects; it wasn’t a dream, it was the reality of social housing facilities management in 2009.

Year-on-year growth, shareholder profits, and pots of funds on offer for community projects; it wasn’t a dream, it was the reality of social housing facilities management in 2009.

But in 2011, the demise of two major players, impending abolition of the Audit Commission, unemployment rates that are at a 16-year high and a poor World Cup performance to cope with, some are left more like Gazza circa 1990; crying like a baby.

Spending cuts, it was assumed, would increase investment in maintenance rather than asset replacement. At this, the facilities management sector developed a dangerous confidence and drive for growth. They expected their order books to expand far beyond what their contracts defined, but the orders never materialised. The expectations on returns seemed to promote the only way to grow as being acquisition. But, the result was ultimately inconsistent integration and poor financial control.

So now we’ve made our rather uncomfortable bed, do we have to lie in it?

Looking forward, it’s my belief that the facilities management sector can rise to the challenges ahead, and for those who survive 2011, the recession brings fresh opportunities.

The future

 

Thanks to the Localism agenda, local communities and companies will have more say in what is done. There’s also a chance for facilities management providers to play a role in tackling local unemployment and developing new cost-effective services and products that respond to a community’s real need.

Small to medium companies should benefit from the fall-out of 2010. Price has always been a driver and in a recession it becomes even more so, but now there’s a keener desire; to ensure that the level of service required can be delivered for the quoted price. As DH Lawrence would put it, we ‘trust the tale and not the teller’; experience and current delivery is valued more than spin and promises. Rather than putting their eggs in one cheap basket, housing providers are looking to separate contracts out and spread the risk.

Ian Williams Ltd has already seen some of their clients respond by moving to multiple providers, rather than bundling all their services together in a single outsourcing.  It’s time their partners considered changing their ways too. A commitment from facilities management providers to localised service and local benchmarking, will be a commitment from the best providers to at least give a flick and a nod to their clients’ local offers at the very minimum. Outsourcing does work, we just need to prove it.

 

Short-termism

Another group to benefit should be young people and those looking to enter the sector. At Ian Williams our commitment to apprentices has increased, as we believe a flexible, skilled workforce and limited sub-contracting offers us the best chance to meet the needs of clients and gain a competitive advantage. A direct delivery model supports this strategy and longer contracts which don’t put emphasis on short-term price gains should mean more apprentices can be recruited.

The way the recession has refocused thoughts on short-termism should mean environmental benefits. The green agenda is now much more deliverable, with companies being forced to develop alternative products that save money. History has shown us that recession breeds innovation.

From the gloom of the recession, opportunities have sprung to improve the way repairs, voids and maintenance services are provided to social housing tenants. Both in terms of cost saving and sustainability. And the environment exists to prove that outsourcing can and does work. The good have a chance to get even better. For the bad? The future is rightly looking ugly.

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