Facility managers are perfectly positioned to impact the profitability of an organization

Money and profit.

It’s been one of the key challenges for businesses throughout 2023, which means it’s also been a big challenge for facility managers. And with the direction the financial landscape seems to be heading, there’s little reason to think this will change next year.

Luckily, facility management is in a unique position to make a difference when it comes to both controlling costs and increasing profitability. We sat down with Marshall MacFarlane, IFMA Fellow and senior facility manager, to talk about how facility managers can make an impact in the long run.

Controlling costs doesn’t mean choosing the cheapest option

“Controlling costs has been, and always will be a primary focus of facility managers” Marshall MacFarlane says when we begin our conversation. “Historically, the problem has been communicating what controlling costs should look like. Without standing out as SMEs (subject matter experts, ed.) for our leadership ‘cutting costs’ will often end up meaning going without or just choosing the cheaper option.”

Going without or choosing the cheapest option will have an immediate effect on the budgets, but the opposite is often the case if you look at the ramifications in the long run. 

For instance, going without or waiting to uprgade your meeting room booking system means you don’t have to spend money right now, but it also means you have to either deal with the issues related to not having that solution, or you need to handle it manually, which is often even more expensive in terms of labor.

“As facility managers I think we can be a lot more creative in the way we help cut costs than to simply choose which systems to go without or decide at what temperature we set the thermostat.”

It is harder to see reducing the temperature of your buildings as simple cost cutting when you know it will impact productivity

“An interesting way to approach cost cutting is to make your buildings better,” Marshall MacFarlane says. “By including facility management in the design and construction process we can improve operability and efficiency.”

Spending money on making your buildings better doesn’t sound much like cost cutting, in fact, it sounds more like increasing cost. But according to Marshall it is not always as simple as that.

“I love to use the ‘thermostat wars’ as an example,” Marshall says. “For years, expressing a dislike of the temperature has been seen as personal complaints, and even a bit silly, but research shows that every person has a spectrum of 4 degrees which make up their ideal temperature. And this ideal temperature is different for everybody.”

Marshall explained that there’s research that shows a correlation between employee comfort and productivity, which can be used to argue that a higher spend on more precise heating and cooling systems will have a bigger effect on profitability than turning the knob on your thermostat down.

“It is much harder to see reducing the temperature of your buildings as simple cost cutting when you know it will impact productivity as well. And that is the mindset we need to change,” Marshall says.

Reduce your facilities spend and make a significant impact on profitability

We asked Marshall to walk us through how he would go about it, if he was tasked with reducing his facilities spend for next year and still wanted to make a significant impact on the overall profitability of his organization.

“First, I’d look at energy consumption. And not just electricity but all utilities. There is almost always ‘low hanging fruit’ in our use of energy and optimizing those will produce relatively quick, and more importantly measurable results.”

According to the EU commission, 75% of European buildings are energy inefficient, and there’s no reason to believe this percentage changes a lot when looking at buildings in the US.^[1]

And just looking at that number suggests that most facility managers have the possibility of doing the exact same thing.

“Secondly I would talk to my vendors, especially those related to building operations. They are experts in their respective fields and, in my experience, if I tell a vendor I need to cut costs, they will help me do it.”

Improving the efficiency or cutting costs when it comes to buildings could happen through anything from improvements to the HVAC system to restructuring the way buildings are used.

“Last, I would look at indoor air quality. The industry standards for things like air filtration and air exchanges are minimum standards, but would we ever accept drinking water to be produced according to the minimum standard? Or what about healthcare? There is more and more data showing that both human health and productivity is correlated with indoor air-quality.”

Proving the impact of improvements to things like indoor air quality becomes a lot more difficult if we want to factor in the health and productivity benefits it has on our workforce, but measuring the improvement itself is a lot more doable.

Your building manager has a bigger impact on your overall health than your physician

Facility management is probably one of the professions that evolved the most during covid. A sudden shift increased the need for logistics, sanitation, communication and controlling the movement of people, and FM was the profession that stepped up to handle those challenges.

But this also poses the question, what is the primary focus for facility management now?

“Speaking very broadly I think the post-covid workspace is our main concern. Company philosophies have changed, and they are still changing, which means our roles as facility managers will also keep changing. But if I were to put it more specifically, I think many facility managers will be shifting gears to address company goals related to ESG.” Marshall said.

ESG is a framework used to evaluate the sustainability and ethical impact of an organization’s operations by splitting it into three groups - environment, social, and governance.

For many facility managers ESG regulations are a relatively new arena, but it’s also a place where, according to Marshall MacFarlane, the profession has potential to make a big impact, especially when it comes to the environmental factors related to our workspaces, such as indoor air quality.

“At a recent presentation I heard something which really helped me frame how big of an impact facility management can have on not just facilities but also the people who inhabit them.” Marshall told us “It was a presentation by Dr. Joseph Allen,^[2] who said that given how much time we spend indoors, there’s an argument to be made that building managers have a bigger impact on your overall health than your physician does.” 

Finishing our conversation we asked Marshall what he thinks the future of facility management looks like.

“As facility management continues to mature, I sincerely hope that the executive leadership in organizations begin to realize the value of the profession and lean on us even more to make a difference; not just when it comes to profitability or cost-cutting, but with things like workplace experience too.”

Notes & references

^[1]https://commission.europa.eu/news/focus-energy-efficiency-buildings-2020-02-17_en

^[2] Dr. Joseph G. Allen is an American director of the Healthy Buildings program at Harvard University's T. H. Chan School of Public Health, and the author of the book  “Healthy Buildings: How Indoor Spaces Drive Performance and Productivity”