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The nature of the business environment today forces all business owners to do more with less and incur no reduction in the level of facility productivity while still pushing to increase the bottom line. If you are the typical business person, you measure your employees’ performance to assure yourself you are obtaining value for that investment and then take the necessary corrective actions when results fall outside pre-established norms.

But what about measuring your building’s performance and productivity? Do you know that by managing your facility costs, you will have a direct positive impact on your overall operational costs? Yes – because facility costs are the second highest operational costs in of all of a company’s operational expenses.

Does the physical environment of the office impact employee productivity?

It is often troubling to hear employees complain about things like the office is too cold or too hot, or complain about the lighting levels, and other physical office features, including the cleanliness of a building. No matter what the nature of employees’ complaints is, you have to understand that the physical office environment has a large impact on employee productivity. Whenever employees complain to each other about facility issues, productivity levels are directly impacted negatively. Therefore, the physical office environment and facility costs are inter-linked.

Businesses are increasingly becoming aware of the negative financial impact to the bottom line of an underperforming building. However, there is an increasing need for most businesses to better understand what is included in facility costs. Additionally, the business community is learning that managing facility costs is a relatively painless way to improve a company’s bottom line without just implementing an arbitrary budget reduction as a means to “do something”.

What is included in facility costs?

Here’s a list which makes up the typical facility costs for most facilities. If you don’t have all of these costs in your facility, consider it as one less headache that has to be managed and accounted for:

When one combines these facility services areas together and totals the costs, one can see how facility costs are the second highest operational expense a business will have.

Are you measuring your facility costs?

But the fundamental question I need you to ask yourself is: “Are you Measuring Your Facility Costs”? If your answer is anything but yes, you have costs that are out of control. Why? If you’re not measuring your facility costs, how can you manage them? Let’s consider a few real life examples so we are all on the same page. Have you ever been on a diet and never weighed yourself? Without the feedback of seeing the measurement from the scale, how would you know if your diet program was working or not.

Have you watched a football game without an announcer talking about the average “yards per carry” or number of “number of yards after a catch”? Players’ salaries are based on the aggregate sum of these very measures. Without these facts, one would only have opinions and how far would professional football player salary negotiations proceed based solely on opinions?

The same logic applies to facilities. Most companies receive the bill for the various facility related items, pay the bill and never look for ways to better manage those items. They do not compare these costs to the previous month’s cost, let alone the same month the previous year to look for trends. Cost savings opportunities are lost without this type of review. Businesses need to stop regarding facility costs as “necessary evils” and begin to measure and manage them.

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