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Willingness to Spend for Quality

The requirement for office space has shrunk, there are no two ways about that. New expansions will also be limited. Work-from-home will become the norm for at least a fraction of the office staff, varying between 20-50%. For the IT sector, this could be higher.

Offices have adopted staggered timings. After restrictions were imposed, what was a 9-to-5 office day has become 7-to-4 or 12-to-8. The requirement for FM during the 9-to-5 regime was a certain limited amount. Because of the shift in office timings, this requirement has grown.

With offices functioning at maybe half their capacity, the FM spend on consumables has reduced accordingly. Hence, most offices have adopted hygiene into the existing budget. As long as sanitisation and disinfection don’t overshoot the predetermined budget, there is no problem. Since the demand for disinfection and sanitisation products has increased tremendously, expenses on them have also come down. Earlier, alcohol-based disinfectants were hardly in use except in hospitals; today, they are everywhere. Their prices have come down.

Today, customers are not insisting on cost reduction and cost control, since they know that by now, costs have been optimised. Now, the focus is on quality.

Vinay Deshmukh
Executive Director & CEO, Forbes Facility Services

Industrial FM

For manufacturing, predominantly the auto and ancillary industries, business has been hectic. After the slowdown of mid-2019, the pipeline was almost dry. This has affected the supplies and the dormant demand, post the lockdowns, has pushed the charts up. The wave there is rising and the FM budgets for this segment will see a marginal increase in the spend.

Trends in manpower requirement

If the office is 10,000 square feet across four floors, and has space for 600 persons (150 on each floor), the FM department has to have a presence on all four floors. That cannot be brought down drastically. For such offices, with staggered timings, the requirement for manpower will go up.

Now, let us consider a 5,000 square feet office with 50 employees. Even if only 10 employees come to work, the number of FM personnel required does not change. If these 10 employees also come to work at staggered times, the FM personnel also get divided accordingly.

Pandemic-related changes in customer expectations

Food processing customers have become much more stringent in terms of their cleaning demands and monitoring. Earlier, the most stringent monitoring was related to GMP audits. Today, these customers are applying the same rigour to disinfection and sanitisation norms.

Most educational institutions are still closed, but they are anticipating a drastic change in their cleaning requirements. There is much more emphasis on hygiene rather than cleaning.

FM budgets and FM quality

World over, cleaning forms 55-60% of FM. The second largest is food services. Pest control, facade cleaning, technical services etc are limited to 15%. This configuration will not change drastically because of Covid. However, there will be a substitution of material costs of cleaning with hygiene, but the budgets will not change drastically.

In the past year, there was doubt about whether companies will remain profitable. But a lot of people have learnt that even during Covid, businesses can be profitable. Today, customers are not insisting on cost reduction and cost control, since they know that by now, costs have been optimised. Now, the focus is on quality.

More and more customers are becoming aware that they should depend on a single FM service provider. So we, who provide both cleaning and food services, have started getting cross-references for other services, because customers believe this is safer.

Customers have also understood the difference between the organised and unorganised sector. They have seen that organised players are much more attentive, adhere to all norms and take good care of their staff as well.

Quality is very subjective. Each customer spends to attain a quality that they perceive is the right quality. There may be individuals in an organisation who may be okay with substandard quality, but that never becomes the philosophy of the organisation. Hence, some organisations may think of saving some money on one FM component and spend more on another, or even spend 10-15% more to achieve the next level of quality.

Let us say an organisation is looking to change its FM service provider. It will look at quality first, and the price only second, whereas a small company working with an unorganised player may not do so.

Within our own FM industry, there are some people who are fixated on cost, and keep complaining that the customer is not willing to pay enough/enough for quality. I don’t think this is the case. Only if the customer gets quality for the price that they are paying does the deal go through. We are not individual buyers and suppliers; we are institutions.

Rise in automation and digitisation

A variety of products are coming into the market which are a combination of cleaning and disinfection solutions. On the equipment side, people are talking about robotics and self-operated machines. This comes with a higher cost, but customers are well aware of that. Those who want it are willing to spend more.

We have introduced a promising product which we spray on high-touch surfaces like elevator buttons, light and fan switches and AC remotes to form a protective covering which ensures that bacteria and viruses do not settle on that surface. We are currently testing how often it needs to be applied.

Earlier, attendance used to be biometric. Now, people don’t want to touch the sensor. We are moving towards face recognition and QR code-based attendance.

Overall, 2021-22 looks up from the gloom of 2020. It is vibrantly expectant for the next life cycle of the industry. It is also driving the wave of solution-based approaches more than ever.

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