Case Studies  |  8 May 2024

Outsourcing vs. In-House Facility Management Services: What’s Better?

Facility management is a key component of successful business operations. It allows buildings to maximise their operational efficiency and boost staff productivity while minimising downtimes, mainly by offloading administrative burdens so that you’re able to bring your attention to other areas of your business.

Often with the strenuous tasks of managing amenities on top of core business operations, companies can consider two options: outsourcing them to an expert facility management company, or keeping and handling them in-house.

This article aims to explore the possible advantages of each approach to help you objectively decide on two options: whether your business could make good use of an outsourced facility management team, or build an in-house team based on your specific needs and priorities.

Outsourced Facility Management Advantages 

Given the complexities involved and evolving business needs, companies look to outsource their facilities management tasks to a third-party service provider, mainly because of these three advantages:

Cost Efficiency

Outsourcing tasks to reputed facility management services can lead to significant overhead cost reductions as labour costs are a business’s biggest expense. According to the multinational services network Deloitte, 70% of organisations globally opted to outsource services primarily to reduce costs.

This is one of the primary incentives for businesses, as contractors shoulder the costs of recruiting and training workers to manage the facility.

According to a 2015 study published in the Procedia Economics and Finance Journal, businesses can save up to 70% in labour costs by outsourcing their tasks to a contractor.

Improved Focus on Core Business Competencies 

Outsourcing non-core functions to facility management services can help businesses solely focus on their core operations by delegating experts to these tasks. This allows a business to sustainably handle efficiency, and address core product development instead.

Let’s use a retail company in the clothing space as an example: their core competencies usually lie in sales management, providing excellent customer service, and managing inventory effectively.

Tasks like security, accounting, payroll management, and building management are important here – but not directly related to their core business of selling clothes.

According to a 2012 research paper published by Victoria University’s Faculty of Business and Law, the most important factors for Australian businesses to outsource some tasks to contractors were access to expertise, higher-quality service, and liberating the business to focus on their core activities.

Greater Flexibility

Delegating tasks can also give businesses some legroom in scaling up (or down) based on their current needs, without the overhead costs associated with in-house staffing bloat.

As we have mentioned before in our previous articles, businesses may inadvertently overlook ancillary functions when expanding, and outsourcing allows them to accomplish this with an external understanding of executing these tasks.

In the same paper, delegating tasks to contractors allows companies to adapt to changing demands, accelerate project timelines, and remain nimble in a rapidly evolving market – key components for successful expansion.

In-House Facility Management Advantages 

While delegating your non-core business tasks to a facilities management company can provide significant advantages, there are still concerns and drawbacks to consider. In this case, it highlights the importance of keeping facility management in-house. 

These two factors will highlight its importance:

Foster Good Company Culture 

Keeping your facility management in-house may lead to forming cohesive teams that align with your company culture and values and therefore are more likely to stay longer

This can lead to increased morale, improved productivity, lower staff turnover rates, and retention of expertise and knowledge accumulated by employees, which is vital in specialised industries.

In one study evaluating outsourcing strategies in facility management, some employees were in agreement that the company should opt to keep management in-house rather than outsourcing to retain expertise and foster employee loyalty.

Greater Quality Control and Quicker Response Times

According to Imdaad, a Dubai-based facility management services company, while the upfront and overhead costs of in-house management may be higher, these costs are offset as your team absorbs knowledge and becomes more efficient over time.

Additionally, in-house teams have tailored control over quality standards and protocols over outsourced teams, allowing businesses to make immediate adjustments, promptly implement changes, and fine-tune resolutions when tackling business operations.

With Connect Facilities

While each approach may offer distinct advantages that will help you remain competitive in today’s business landscape, the decision ultimately depends on the specific needs and current priorities of your company.

However, if you would love to give a facilities management company a try, Connect Facilities has a track record of proven expertise in property management throughout Melbourne and has gained recognition nationwide for our commitment to quality, efficiency, and sustainable practices.

Contact us today and let us help you streamline your business operations.

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