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IN PARTNERSHIP WITH

Facilities Management
Business Confidence
Monitor 2017

UK
FM Business Confidence Monitor 2017 Page 1
Contents
Foreword........................................................................ 3
Introduction.................................................................... 4
Profile of respondents................................................... 5
FM environment............................................................ 6
Business growth............................................................ 7
Careers, apprenticeships and legislation.................. 10
Conclusion................................................................... 11

Page 2 FM Business Confidence Monitor 2017


Foreword
Nicki Thomson,
Linda Hausmanis Managing Director,
Acting CEO, BIFM Head of Business Services,
Barclays

Welcome to the FM Business Confidence Monitor (BCM) 2017, We are delighted to work with BIFM and i-FM once again
brought to you by the British Institute of Facilities Management to measure the confidence, concerns and ambitions
(BIFM) in collaboration with Barclays and i-FM. The aim of of organisations operating within the sector. Facilities
this report is to provide an authentic forecast of the facilities management (FM) makes up a substantial part of the
management (FM) sector in the UK over the coming 12 months. wider economy and employs a significant proportion of the
workforce in the UK. Therefore, the health of the sector is
By leading on work such as the BCM, and through a core of crucial to understand, not only by those within it but by the
tracker questions, BIFM is able to monitor changes and trends in wider business community as a bellwether of UK economic
confidence and behaviours over time. This couples together the health.
views of FM teams on the ground along with commentary from the
sector’s senior decision makers to offer a comprehensive insight This is the third year of our involvement in the FM Business
into the market. Confidence Monitor and it is interesting to compare results
based on the historical data. Competition in the market
Since the last report, there of course have been substantial was cited as the biggest barrier or obstacle to business
political and external challenges within the UK market, which the success in 2015 but this was – perhaps unsurprisingly
FM sector and wider business world must now embrace. However, – overtaken by the economy in 2016 and 2017. Further
despite this uncertainty the outlook for 2017 remains cautiously clarity as to the terms of the UK’s exit from the European
optimistic with some indicative trends which show a lowering of Union in the coming months should help to alleviate some
expectations. of this concern and put businesses in a better position to
formulate their investment plans and strategies for growth.
What remains encouraging is the increase in respondents,
perhaps demonstrating the value of this BCM by the wider This year’s survey also provides an up-to-date view on the
industry. Because of its success within the UK the Business outlook for 2017, enabling us to better understand what the
Confidence Monitor has now been replicated by BIFM in both the next 12 months have in store for this vital sector and the
Middle East and last year for the first time in Nigeria. people that work within it. It is pleasing to see that more
than half of survey respondents think the Apprenticeship
Levy will have a very positive or positive impact on bringing
new talent into the FM sector. With the skills shortage a
Simon Iatrou key topic of conversation, apprenticeship schemes offer a
Editor, i-FM lifeline to businesses looking to train and develop new staff
from the ground up. We will continue to share best practice
with businesses and offer guidance to ensure effective
i-FM is delighted to be partnering with BIFM and Barclays on implementation of the relevant schemes.
this crucial piece of research once again. The FM Business
Confidence Monitor is a mechanism for capturing the FM The information contained within the FM Business
market’s general outlook and can also serve as an effective Confidence Monitor helps us to stay current and relevant
barometer of confidence in the wider business world. in our approach to the facilities management sector where
our commitment is to support our clients in the valuable
How facilities businesses plan to invest in technology over work that they do for the UK economy – providing jobs and
the next 12 months stands out in this year’s survey. Through helping businesses prosper and grow and public services
the adoption of new technologies, the FM sector is making operate efficiently and cost effectively. We hope you find this
giant leaps forward and is having a tremendous impact edition insightful and informative.
on important areas such as workplace wellbeing and
organisational performance.

FM Business Confidence Monitor 2017 Page 3


Introduction
The FM sector represents a substantial piece of the wider economy. The potential
market for facilities management is estimated to be £121.8 billion (Mintel 2016) -
the sum of facilities management contracts, other contracted out activities, and a
commercial estimate of the value of work not currently outsourced - has demonstrated
consistent growth in the last few years. By measuring confidence levels, it is possible to
gain greater insight into the UK industry and position FM as a benchmark for any future
analysis.

In recent years, the FM Business Confidence Monitor (BCM) has revealed a sense of
cautious optimism within the facilities management sector. While survey respondents
have been generally positive about the business environment and the potential for growth,
a range of external factors have tempered expectations. This year has begun with a sense
of political, social and economic uncertainty.

Anomalous events could send the UK, US and Europe down a new path and industry –
which relies upon consistency – is unclear about where this will lead.

It is impossible to ignore the results of last year’s Referendum on the UK’s Membership
of the European Union (EU). Despite much debate and the Government’s move to publish
the Brexit plan, the consequences of exiting the EU currently remain ambiguous. Many
argue that there is a lack of clarity over important issues such as the status of the UK’s
free trade agreements, tariffs and the fate of EU citizens in the UK. Each of these issues
will have some effect on businesses in the facilities management sector, which is why the
authors of the report have included a specific question on Brexit in the 2017 survey.

Page 4 FM Business Confidence Monitor 2017


Profile of
respondents
In total, 469 people completed the online survey between 14
December 2016 and 16 January 2017. This figure represents a
67% increase in respondents compared to last year’s research.

A breakdown of the data reveals that 52% of these respondents


work for service providers (up 4% from 2016 survey), while 29%
belong to client organisations in the private sector, and the
remaining 19% belong to client organisations in the public sector.

Of the 450 respondents who revealed their job rank, 184 (41%) More than a quarter of respondents (29%) work for organisations
identify as Senior Management and 133 (30%) as Middle that employ 5,000+ people, while slightly fewer (20%) belong
Management. Fifteen per cent ticked the box Managing Director/ to organisations with 1,000-4,999 employees. Interestingly, the
CEO, with Non-management and First Line Manager categories number of respondents that represent organisations with 10-49
making up the other 14%. employees has grown by 2% compared to the 2016 survey results.

The largest sectors that respondents worked within were In terms of geographic split, a quarter of respondents operate
Education (31%), followed closely by Real Estate (27%). Other UK-wide, marking a 5% increase on last year, while the number
groups include Mechanical & Engineering (23%), Central of London-based participants has fallen by 7%. The next most
Government (22%) and Construction (20%), though many popular answer is the South East with 12%.
participants marked multiple boxes.
This year, women make up 19% of the sample size (a 4%
decrease compared to last year’s survey) and the respondents
PLEASE DESCRIBE YOUR ORGANISATION were from the 45-54 age group (39%).

2016

2017

19% Service provider


Client-private sector
Senior leader view
Client-public sector
52% To canvass wider opinion, a small group of FM industry leaders
29% were interviewed. They were asked for their views on some of the
salient issues raised in the survey, adding an extra dimension to
the research by incorporating real qualitative data to the survey
findings.

WHAT LEVEL ARE YOU WITHIN YOUR ORGANISATION? HOW MANY PEOPLE IN TOTAL ARE EMPLOYED
BY YOUR ORGANISATION?

2015
30
2016
1-9
29%

2017 25
10-49
Managing director/CEO
10%
4% 15% 20
Senior management 50-99
20%

Middle management 15 100-249


First line manager 250-499
30% 10
11%

41% Non-management 500-999


10%
8%

5
7%

7%

7%

1,000-4,999
2015
2016
2017
2015
2016

2017
2015
2016

2017
2015
2016

2017
2015
2016

2017
2015
2016

2017
2015
2016

2017
2015
2016

2017

0 5,000+

Shades denote 2016 and 2015 data

FM Business Confidence Monitor 2017 Page 5


THE FINDINGS
FM environment
Overall, 62% of survey respondents rate the current FM
business environment as positive or very positive, while 30%
describe it as satisfactory and only 7% say it is poor. These
broadly positive figures are comparative to the 2016 survey
results.

HOW WOULD YOU DESCRIBE THE CURRENT FACILITIES


MANAGEMENT BUSINESS ENVIRONMENT?

2015
“I believe the trend from many
2016
customers will be to continue to
2017
appoint best-in-class services
7% 12%
Very positive providers and bundle services with
1%
Positive
one partner where appropriate.
Satisfactory
30%
Poor
Customers are steering away from
50%
Very poor homogenised ‘one size fits all’
solutions.”
Mauro Ortelli, Managing Director,
14forty

OVER THE NEXT 12 MONTHS DO YOU EXPECT THE FM


ENVIRONMENT TO IMPROVE, REMAIN THE SAME OR
DETERIORATE?

2015

2016

2017

8% Improve OVER THE NEXT 12 MONTHS DO YOU PLAN TO INCREASE,


Remain the same MAINTAIN OR DECREASE YOUR WORKFORCE?
Deteriorate
2016
40%
51%
2017
Increase
14%
Remain the same
Decrease
39%

Regarding expectations for the FM business environment 47%


over the next 12 months there has been a notable dip in
confidence. Only 40% of respondents expect it to improve (down
9 percentage points from last year and 14 points since 2015)
and 51% believe things will remain the same. The remaining
8% expect the environment to deteriorate, a 3 percentage point On the subject of recruitment, 39% of respondents plan to
increase from 2016. increase the size of their workforce in 2017. Furthermore, almost
half (47%) plan to maintain the size of their workforce, while only
14% expect to decrease numbers.

Page 6 FM Business Confidence Monitor 2017


Business growth “Increasingly, customers see opportunity
in the relationships they have with their
facilities and engineering providers.
Confidence in activity over the next 12 months has stayed Topics we are actively discussing with
surprisingly static since last year’s survey. In 2017 the data customers range from energy saving
shows that 38% of respondents expect to increase capital
initiatives to how we can improve the
investment (which is up 1% from the 2016 survey), while 48%
expect capital investment to remain the same.
overall wellbeing of building users.”
Steve Gibbs, Managing Director,
When looking at Service Providers increasing their capital
SPIE UK Facilities Services
investment, there has been an overall significant drop from
2015 (then 54%), lowering to 39% in 2016 and showing a
small increase in 2017 with 42%. However, those set to
decrease their capital investment has nearly doubled from
6% in 2016 to 11% in 2017.

WILL YOUR CAPITAL INVESTMENT IN THE NEXT 12 MONTHS...

2015 DO YOU ANTICIPATE YOUR TURNOVER OVER IN


2016 THE NEXT 12 MONTHS WILL...
2017
Increase More than half of respondents (55%) anticipate that their
Decrease turnover will increase (though this is down 4% from last
Remain the same
42% year) and 35% expect it to remain the same. Only 10% expect
46%
turnover to actually decrease.
Service Providers only

11%
However, when looking at Service Providers there has been a
significant decrease since 2015 in indicating their turnover will
increase (87% compared to 64% in 2017).

2015

2016
HOW CONFIDENT ARE YOU IN ECONOMIC GROWTH AND THE
2017
PERFORMANCE OF YOUR BUSINESS OVER THE NEXT 12 Increase
MONTHS COMPARED WITH THE LAST 12 MONTHS? 29%
Decrease
Remain the same

The survey then asked participants to state how confident they are
7% 64% Service Providers only
in the economic growth and the performance of their business
over the next 12 months, compared to 2016. In response, only 8%
said they are much more confident, while 19% are slightly more
confident. Conversely, a combined 37% of respondents report
that they are slightly less confident or much less confident.

However, when looking at Service Providers there has been a


significant decrease of 39 percentage points stating they are “Servest is a growth business
much more confident/slightly more confident since 2015.
Alongside this, the figure of those who are much/slightly less and our strategy has always been
confident has grown significantly from 7% in 2015, near doubling twofold: to grow organically and
in 2016 to 13% and 2017 has seen this grow to 33%. via acquisitive means. Our M&A
2015 activity will continue to contribute
2016 to business expansion.”
2017

5% 10% Much more confident Andrew Sugars, Executive Director


Slightly more confident
As confident
Corporate Development, Servest
28% 20%
Slightly less confident
Much less confident

37%
Service Providers only

FM Business Confidence Monitor 2017 Page 7


WHAT ARE YOUR BUSINESS’ MAIN OBJECTIVES FOR
THE NEXT 12 MONTHS?

The most commonly cited business objectives for the next 12


months include moderate revenue growth by a rate of up to 20%
per annum (55%) and maintaining current business performance
(45%). In addition to this, 13% of respondents said they aim to
acquire other businesses and another 13% hope to be involved in
international trade.

60
Grow revenue moderately
50

55%
(up to 20% per annum)
40 Maintain current business p

45%
Grow rapidly in terms of tur
30 (more than 20% per annum
20 Acquisition of another busin

9%
International trade
10

19%
2017 13%

6%
2017 13%
Sell/down size/consolidate/

20174%
2016

2017

2016

2017

2016

2017

2016

2016

2016

2017

2016
0 Hand on the business/succ
60
Grow revenue moderately
50
55%

(up to 20% per annum)


40 Maintain current business performance
45%

“Currency risk
30 will feature highly Grow rapidly in terms of turnover in sales
(more than 20% per annum)
for companies
20 that make numerous Acquisition of another business
9%

cross-border10 payments or have


International trade
19%
2017 13%

6%
2017 13%

Sell/down size/consolidate/close
multiple foreign currency accounts.
20174%
2016

2017

2016

2017

2016

2017

2016

2016

2016

2017

2016

0 Hand on the business/succession


We will see companies examining
the type of FM model they use to try
to mitigate this risk.” WHICH OF THE FOLLOWING BARRIERS OR OBSTACLES DO
YOU BELIEVE WILL IMPACT THE SUCCESS OF YOUR BUSINESS
Colin Kenton, Managing Director OVER THE NEXT 12 MONTHS?
FM Services, KBR
The next 12 months will not be without their challenges. The
economy has been cited as the biggest barrier or obstacle to
growth (57%), while 45% point to competition in the market.
Other popular answers include recruiting/retaining staff (23%),
shortages of skilled staff (22%) and regulations and enforcement
(22%). It is helpful to note that none of these answers are
independent of the others. For example, “competition in the
market” is dependent on the state of “the economy”.

60

50
57%

“FM companies need to act as 40


The economy
45%

Competition in the market


strategic partners to their clients 30 Recruiting/retaining staff
and deliver measurable outcomes. 20
Shortage of skilled staff

It is essential for us as an industry Regulations and enforcement


23%

22%

22%

10
to prove that FM creates value for
0
our clients, especially with the
uncertainty caused by Brexit.”
Sean Haley, Regional Chairman,
Sodexo UK & Ireland

Page 8 FM Business Confidence Monitor 2017


“Economic uncertainty around
Britain’s relationship with the
European Union poses the
biggest challenge for business in
2017, whilst all central and local
government departments are
faced with demands to do more
WHAT IMPACT DO YOU THINK BREXIT WILL HAVE ON THE with less.”
UK ECONOMY?
Bruce Melizan, Executive Director,
One of the biggest obstacles to business success over the Interserve
next 12 months could be the UK’s exit from the EU. The mixed
response from survey respondents, however, is illustrative of
the confusion that clouds the entire Brexit debate. While 44%
of participants believe that Brexit will have a negative impact
on the UK economy, just under a quarter (23%) anticipate that
it will have a positive impact. A further 21% of respondents
believe that Brexit will have no impact whatsoever.

2017
8% 4% Very positive
WHAT INVESTMENT IN TECHNOLOGY WILL YOU BE
Positive MAKING IN 2017?
23%
No impact
Negative Although a multi-response question, according to the data
44% Very negative 19% of respondents have no plans to invest in technology
21% throughout 2017. Of those businesses that do plan to make
this investment, 54% will focus on measuring and reporting
tools, 52% will target service delivery software and 35% will
look at CRM and communications.

Improve service delivery


60 Measuring and reporting tools
CRM and communications
50
We will not be investing in technology in 2017
52%

54%

40

30
35%

19%

20

10
2016
2017

2016
2017

2016
2017

2016
2017

“Technology will be increasingly


2017

important as the intelligent use


of data could lead to a lower
requirement for labour resources
and provide clients with richer
information to inform their property
and facilities management decisions.”
John Telling, Group Corporate
Affairs Director, Mitie

FM Business Confidence Monitor 2017 Page 9


Careers, apprenticeships
and legislation
The Apprenticeship Levy, which is set to launch in April 2017,
requires all employers in the UK with an annual pay bill of more
than £3 million to invest in apprenticeships. Under the terms of
the new law, these employers will have to pay a 0.5% levy on their
total pay bill each month.

WILL THE INCREASE OF THE NATIONAL LIVING WAGE,


RAISING THE CURRENT NLW FROM £7.20 TO £7.50, IMPACT
DO YOU CURRENTLY HIRE APPRENTICES? THE NUMBERS OF EMPLOYEES FOR YOUR BUSINESS?

A number of prominent FM service providers have welcomed the In April 2017, the National Living Wage is set to increase from
greater focus on apprenticeships, with some even going as far £7.20 per hour to £7.50 per hour. Respondents appear to be
as to pledge an increase in the number of apprentices that join optimistic about this change, with 87% confident that they will be
their business. Although well over half of the survey respondents able to maintain the number of employees in their business. Only
(57%) do not currently hire apprentices and only 37% plan to hire 5% worry that they will have to decrease numbers.
apprentices in 2017.
2016 2016

2
2001
2017 17
7
5% 8% Yes – increase
5%
No – maintain
Do not currently hire apprentices Yes – decrease
38% Do currently hire apprentices
57%
Not sure

87%

WHAT IMPACT DO YOU THINK THE APPRENTICESHIP LEVY


WILL HAVE ON BRINGING NEW TALENT INTO THE SECTOR?

Views on the Apprenticeship Levy are fairly positive. More than


half of the survey respondents believe it will have a very positive
or positive impact on bringing new talent into the FM sector. In
contrast, only 15% of respondents claim it will have a poor or very
poor impact.
“The main frustration
2017
[with the Apprenticeship Levy]
Very positive
12%
3% 12% is that previously developed
Positive
training plans that were targeted
Satisfactory
Poor
towards meeting customer needs
34% 39% Very poor
will be now need to be modified
to meet the need to use approved
courses.”
David Carr, UK CEO,
Bouygues Energies & Services

Page 10 FM Business Confidence Monitor 2017


Conclusion
While the general outlook remains optimistic, Likewise, FM professionals are still unclear about
uncertainty in the economy has led to a dip in apprenticeships with the Apprenticeship Levy to
underlying confidence indicators. be introduced in a matter of weeks. Nevertheless
it seems that the benefits of hiring apprentices
are welcomed by FM service providers. There is
The majority of FM professionals feel positive about still a need for the FM sector to pledge to increase
the current business environment, yet fewer people the number of apprentices as there are notable
now than in 2016 believe that it will improve over the challenges around recruitment and shortages of
next 12 months. Concerns about the economy may skilled staff.
cause businesses to pursue conservative objectives
and growth. Though the facilities management sector has
reasons to be positive, with sustained competition
This conservatism may stem from a set of ‘known in the market indicating a healthy business
unknowns’. Although the UK’s recent economic environment, the key message from this year’s
performance has been solid, possible pressures research appears to be ‘wait and see’. FM
on economic stability could crystalise in 2017. professionals are generally positive about the future
Naturally, organisations may be reticent to make though caution remains on some headline topics.
any big investments or assumptions about future
growth until there is a clearer picture.

FM Business Confidence Monitor 2017 Page 11


BIFM i-fm.net Barclays
The British Institute of Facilities i-FM is the award-winning web-based For over fifteen years, Barclays has been
Management (BIFM) is the professional news and information service catering to at the forefront in providing support,
body for Facilities Management (FM). the needs of the facilities management funding and guidance to the facilities
Founded in 1993, it promotes excellence community. management sector. Working with our
in facilities management for the benefit team of dedicated Business Services
of practitioners, the economy and With a reputation for top-quality news, Relationship Directors, you can be
society. Supporting and representing features, comment and research, we have confident that you will always have access
over 17,000 members around the world, grown and developed with the industry to the right specialists, perfectly placed
both individual FM professionals and – always maintaining our distinctive to understand your business and connect
organisations, and thousands more focus on the FM marketplace. Updated you to the expertise you need.
through qualifications and training. every business day, the site delivers a
unique service – easily accessible, fully We recognise that the FM sector is
BIFM promotes and embeds professional searchable and highly topical. diverse, and that the businesses within it
standards in facilities management. have different needs. Through the strategic
Committed to advancing the facilities t: +44 (0)208 850 9520 support of our Relationship Directors and
management profession, it provides a e: info@i-fm.net the in-depth knowledge of our dedicated
suite of membership, qualifications, @ifmnet credit team, we can provide access to
training and networking services designed w: www.i-fm.net finance from across the Barclays Group
to support facilities management to meet your business requirements.
practitioners in performing to the best of
their ability. To find out how we can help your
business succeed, contact Nicki
t: +44 (0)1279 712620 Thomson, Head of Business Services,
e: research@bifm.org.uk Barclays.
@BIFM_UK
w: www.bifm.org.uk t: +44 (0)7775 546 928
e: nicki.thomson@barclays.com
@BarCorp_News
w: www.barclayscorporate.com

Page 12 FM Business Confidence Monitor 2017

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