Navigating the Economic Downturn
Part 1: Reducing Operating Costs
Part 2: Facility Staffing During the Downturn
Part 3: Weighing Security During the Downturn
Facility Staffing During the Downturn
By Greg Zimmerman, Executive Editor - January 2009
If you’re a glass-half-full type person, the upside of the economic downturn may be that you have a better pool of candidates to choose from if you’re looking to hire an engineer or controls supervisor. But that’s assuming you’re not under an enterprise-wide hiring freeze, meaning that empty position will remain empty for a while. You may just have to cover that job with existing staff.
In these trying financial times, facility executives are finding themselves having to do more with less staff. But there are some creative ways to cope. One piece of advice is to closely examine the make-up of the current staff and try to find ways to move folks around.
“Always do staffing analysis and benchmark against similar types of organizations,” says Nancy Bechtol, director of the office of management and reliability at the Smithsonian Institution. “Especially in a hard economy, don’t take for granted that staff is the right size. And don’t take for granted staff has the right knowledge to be doing the job they’re doing. You can’t afford to have even one too many mechanics.”
This doesn’t mean that you should immediately start laying people off. It just means that staff may need to be re-allocated so that the most important functions of the facilities department are still carried out without a hitch. That means having conversations with upper managers so that you can come to an agreement about what, exactly, the facilities department should be vis-à-vis its core functions.
“You really have to start with the basic premise that you’ve defined the functions for which permanent employees are needed and you know the skills and knowledge needed to perform those functions,” says Stormy Friday, president, The Friday Group. “Then that trickles down to how many people you’ll need.”
Moving staff around the organization, out of the facilities organization, or even into early retirement is a good way to help the facilities’ bottom line.
“You should have a profile of your staff so you know who might be eligible for retirement and take a buyout,” says Friday. “Other staff might be interested in moving out of the facility organization.”
And there may be hidden benefits. One is that you’ll have a more valuable staff in terms of knowing how to perform multiple job functions.
“You don’t find cross-training as frequently in a robust economy,” says George Lockhart, construction manager for Great Wolf Resorts.
While training budgets are often the first to be slashed, facility executives should do everything they can to continue some form of staff development. “We’d never eliminate training,” says Bechtol.
Using on-site training methods, like Webinars or local speakers, are cost-effective but valuable ways to cross-train staff. “Multiskill training is even more critical in a down economy,” says Friday. “You want your people to be generalists.”
Overall, communication with staff is never more important than in times like these, because, as Friday says, the fear of the unknown is worse than the fear of the known. The worst thing facility executives can do is hole themselves up in their offices, and leave staff in the dark about raises (or lack thereof), changes in hours, or the status of their jobs. Even if worse comes to worst, and some people have to be let go, honesty is essential.
“If you have to cut people, let them know it has nothing to do with their performance,” says Friday. “It wasn’t a question of individuals, it was a question of job class.”
Outsourcing to In-tasking
Another possibility for cutting costs, say experts, is not just moving staff around, but moving work around also. This means carefully examining all outsourcing contracts to see if they can be scaled back and the work completed by in-house staff. Bechtol says she’s actually been doing this for years — completing tasks like painting and cleaning with in-house staff and overtime — but it’s even more valuable now in tough economic times.
“This means a lot of work can be done in a cheaper fashion,” she says. Hourly staff appreciates the opportunity to earn more as well, but Bechtol warns against using this strategy as a long-term solution, because it creates a situation where overtime almost becomes mandatory to keep up with all the work that needs to be done, and the benefit of flexibility between using staff or using a contractor goes away. Additionally, staff may start to balk at the long hours.
“We watch metrics like accident rate and injury rate,” says Bechtol. “Those are sure signs that staff is overworked.”
One example of leveraging staff for work that is usually contracted out is doing construction projects in house. Clearly, this won’t work for large projects like a 200,000-square-foot corporate headquarters building, but if you’ve been planning to build a parking garage or renovate a floor, for example, and your construction budget is suddenly cut, using your own staff, along with established relationships with other trade workers, is a possibility.
“Basically, you become your own general contractor,” says Lockhart. “You probably have more expertise than you know in house, so in a tough economy, you should take advantage of that. It’s a good refresher course and it makes your people more valuable, more invested. You learn a lot about your people you wouldn’t learn in a robust economy.”
Again, the more you use your own team, and illustrate their skills and value, the better chance they will be around at the end of the financial crisis. While, initially, the idea of taking on a construction project at the same time they’re expected to be doing their regular jobs may cause some dissension in the ranks, Lockhart says that it’s important to explain that this strategy is one way you’re working hard to keep their jobs.
That’s because at the end of the day, it saves lots of money. Lockhart says that he’s building an addition to a restaurant at a resort property with this in-house method, and expects to save about 30 percent on the cost of the project.
A clear downside, however, is that the project will probably take a bit longer than the traditional method. “Problems come up all day long on normal projects, and there’s a superintendent there to make them go away,” says Lockhart. “But this way, you’re taking care of them.” And that takes time.
Scaling back or eliminating contracts altogether may not make your contractors happy, but because the contractors are probably struggling as well, they’re more than willing to sit down and talk about options.
“Treat the contractor like the expert,” says Michael Cowley, president, CE Maintenance Solutions. “Tell them we have to figure out how to trim some money. If they don’t help, they could lose the whole contract, so usually they will.”
Comments
tparker75 wrote re: Facility Staffing During the Downturn
on 12/4/2009 7:37:51 AM
Outsourcing can be a cost reducer if the in-house labor costs have grown beyond industry standard levels (driven by long-term employees) or by lack of leadership getting the in-house staff to perform to industry expected levels. An outsourced model uses the labor for a specific scope and charges you when the scope goes beyond that. This model allows greater efficiency for the client as well as the vendor who can use the unused labor for another client elsewhere. The key is knowing what scope is really desired, and having the leadership to keep the staff fully employed and effective. The bottomline is the tasks should be clear and known - you're going to pay for the labor somwehere, somehow. So, if its costing too much your labor is too high or the scope isn't robust enough.
KC Ajith Kumar wrote re: Facility Staffing During the Downturn
on 12/1/2009 1:12:04 AM
Hi,
I tend to agree with Tom. The whole gamut of outsourcing is to reduce operational cost.
The Principal employers or the client companies normally have much higher salary structures and connected overheads that are eliminated or drasticllay reduced by outsourcing.
The other reason for outsourcing is the nature of non core functions being carried out by the company employees. This increases the focus of the principal employer on their core functions.
The comparatively intangible difference is the control over the functions. With the current levels of automation and performance metrics that also becomes tangible.
Tom Mac Dermott, FCSI wrote re: Facility Staffing During the Downturn
on 7/6/2009 12:46:59 PM
You have an interesting take on outsourcing. Companies usually outsource to obtain skills they don't have in house or to eliminate in-house staff positions; in virtually all cases, to reduce costs.
If a company has outsourced, for example, housekeeping, mailroom or food service, how will they be able to "insource" if they've already eliminated these internal positions? Why would this be less expensive, if they had outsourced to reduce costs in the first place?
