In contrast to a perceived slowing of pace in the facilities management sector, a new report published by MTW Research has highlighted the prospective of a marked rise in sector profitability this year.
The report, which features information from 100 prominent providers of facilities management services, highlighted the capacity of a £200m rise in sector profitability as a result of “largely positive” sector fundamentals which will provide stable growth in both volume and value over the course of this year and next. This, of course, comes in contrast to woes highlighted from an outsourcing perspective, which the report does not dismiss as such, but merely regards such issues as a relatively short term challenge.
One of the largest restraints on profitability will come from the new national living wage, which will see an increase in costs of circa £250m over the next few years, as some 400,000 individuals are affected. Of course, whilst not being an altogether positive not from a corporate profitability angle, the new national living wage will indeed allow for employees to enjoy in the potential success of the sector in the years to come.
Most specifically, the report showcased how the outsourcing sector plays host to some 1.4m jobs for the facilities management sector this year, with the majority of the industry pressures from the new national living wage impacting small and medium enterprises, as well as regional organisations most. This comes in contrast to larger enterprises and London-centric organisations who are expected not to be feeling the “pinch” quite so much.
Preparing for the evolving facilities management landscape, trends have been seen within in-sourcing and more strategic facilities management processes, as well as the usage of new technologies, data management and communication seeing the potential for facilities management providers to shape up their operations from both a quality-of-service perspective, as well as profitability.