How will the four markets stack up?
"A Thriving Facilities Management Partnership" is an excerpt from the December 2018 issue of Business Officer Magazine, published by NACUBO.
Keeping campuses and aging facilities in pristine condition can strain a college or university’s budget. As financial pressures intensify, it’s not surprising that more institutions are beginning to explore outsourced facilities management (FM). The obstacle: The term “outsourcing” often raises concerns about job loss and service quality.
How can you avoid the negatives? By approaching the FM service provider as a partner and shaping your relationship around the values of trust, shared goals, and advancing your mission.
Such a partnership has been the foundation of the 15-year relationship between JLL and Spalding University, Louisville, Ky. Our experience provides some critical lessons for alleviating employee concerns and establishing a successful outsourcing relationship.
It’s Not About Job Loss
Assumptions about job loss are often top of mind in conversations about outsourcing. Yet, your future FM service provider will be keenly aware that your facilities management team has institutional knowledge that it can’t easily replicate. Retaining employees will be a priority. Conversely, transitioning to the service provider will give your former employees access to a wealth of resources, tools, and best practices, along with personal development and career options.
To help ease transition fears, ask your prospective provider to share data about turnover rates and average employee tenure. Also, be sure to give employees the opportunity to ask the provider questions and address their concerns head-on.
Concerns also tend to revolve around loss of valued benefits and compensation. Yet, the reality shows that these concerns are misplaced.
In JLL’s practice, transitioning employees gain benefits and compensation on par with, or better than, what they had before. If your employees are unionized or receive full or partial tuition reimbursement, you can work with your service provider to maintain parity. Before you sign on the dotted line, make sure that you clarify your deal-breaker issues. If a provider isn’t willing to negotiate, it’s a good signal to look elsewhere.
While Spalding did not have a large FM team when JLL was brought on board, many organizations do. Whatever the size of your team, your potential FM provider should be willing to provide details about roles, responsibilities, benefits, and compensation.
Transparency Is Key
The unknown creates anxiety and ignites rumors. Before you advance your decision to outsource, meet with your key stakeholders to discuss goals, plans, and outcomes. It’s not unusual for an FM service provider to meet with a range of stakeholders—including trustees, administrators, professors, and employees—before an outsourcing agreement is ever signed. When everyone is included in the process, you can dispel negative assumptions and create a positive environment from the outset.
The Care Factor
Aside from their fundamental job concerns, employees also may worry about leaving a cozy university community to join a large, faceless real estate services company. It’s a critical concern, because job satisfaction and advancement opportunities heavily influence whether transitioned employees will continue to support your campus.
Ask your potential FM partner about its onboarding process for new employees. Will transitioning employees receive training in best practices and leading FM technologies? Will a dedicated HR contact support them throughout their career?
Creative Cost Savings
When JLL first started working with Spalding University, the priority was to find creative ways to reduce costs and maximize resources for its 600,000+ square feet of facilities—while maintaining high-quality, proactive services. Also important was a long-term capital improvement plan backed by preventive maintenance.
Within the first 60 days, JLL reduced operating expenses by $100,000 annually by restructuring janitorial, elevator maintenance, and landscaping service contracts. For creative cost savings, JLL procured office furnishings at public auctions. Instead of hiring project managers, the FM team managed facility renovations itself, and building engineers pitched in to set up and break down campus events. Optimizing resources enabled Spalding to divert budget toward other campus and community improvements.
A True Partnership
Spalding has expanded its real estate footprint by 207,386 square feet since 2003, yet facility management costshave declined from about $5 to $3.60 per square foot. That’s roughly $2 per square foot less than the average cost for higher education FM.
From the start, JLL has been embedded in the Spalding campus community. Throughout our relationship, we’ve collaborated to expand Spalding’s community service mission and establish its leadership role in the planning and renewal of nearby neighborhoods.
Outsourcing services shouldn’t be about making trade-offs, but about creating a collaborative and creative partnership. It’s possible to create a relationship that honors employees, takes service to the next level, and also helps to advance your mission.