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How much should an organization pay somebody who oversees the infrastructure that allows a company or university or government entity to achieve its mission? Moreover, should that amount vary whether the organization is a corporation or a hospital? Exactly how much are facility executives worth?
Facility executives, ranging from specialists to directors and vice presidents, earn salaries that vary with the industry in which they work as well as the amount of square feet they oversee and the size of their organization’s facility budgets, according to data gathered through an online salary survey.
The highest-paid position by title is vice president/director of real estate with a median annual salary of $104,000, according to the data. Next is vice president/director of design and construction with a median salary of $92,500, followed by vice president/director of facilities and vice president/director of maintenance and engineering, which both had median salaries of $85,000.
The median salary for facility/building managers was $60,000.
Salary data was gathered through SalaryBase, an online survey on FacilitiesNet, the Web site of Building Operating Management and Maintenance Solutions magazines. Data analyzed for this article was submitted between January 2004 and August 2005 and included 4,903 responses.
The median is a measure used to indicate the middle point in a set of numerical data. Half of those who responded to the survey earned more than the median while the other half earned less. Statistically, the median is a better measure of central tendency than the average because numbers that are extremely high or low do not distort it.
But what’s in a number?
Facility executive salaries vary depending upon the amount of square footage they oversee, the size of their organization’s facility budget and the building type. The highest-paying market sector for vice presidents/directors of facilities was the industrial sector, where the median salary was $124,500. The median salary for facility/building managers in the industrial sector was $73,500, which was also the best-paying sector for that title.
The second-highest paying sectors for vice presidents and directors of facilities were retail and corporate office, which each had median salaries of $100,000. In each of those sectors, the median salary for facility/building managers was $65,000.
The segment in which vice presidents and directors of facilities earned the least was the municipal government sector with a median salary of $75,000.
Not surprisingly, facility executives responsible for larger budgets and more square feet earned more than their counterparts at organizations with smaller budgets and fewer square feet. The median salary of vice presidents and directors of facilities at organizations with more than 1 million square feet was $100,000. That compares to $80,000 for those at organizations with less than 1 million square feet.
Likewise, vice presidents and directors of facilities with budgets exceeding $20 million earned median salaries of $111,500, while those with budgets of less than $20 million earned median salaries of $80,000.
Stormy Friday of The Friday group says there is still a sense among professionals that they should be better compensated.
“For the practice of facility management, pay has always been lower than what people think it should be,” Friday says. “Facility managers see IT as their competition and think that they should make as much as the folks do over there.”
According to the Department of Labor’s Bureau of Labor Statistics, professionals in information technology jobs have averaged salary increases ranging from 3 to 4 percent over a seven-year period ending in 2003. Meanwhile, those in facility-related jobs have averaged increases of just 2 percent. In some years, facility staff pay decreased, according to the bureau’s data.
As a Fellow of the International Facility Management Association, which also conducts salary surveys, Friday has exposure to facility executives and opportunities to discuss compensation. She has also worked with job placement firms and has conducted executive searches for companies trying to locate facility executives.
Although survey respondents weren’t asked to indicate education levels, experience levels, certifications or other data, Friday says those variables have a significant influence on compensation levels.
IFMA salary surveys indicate that facility executives with professional certifications earn about 20 percent more than those without them. And that difference is likely to grow.
Friday says people entering the facility field are more likely to have the certifications than were new entrants a decade or so ago. Some employers look for certifications before hiring individuals.
In some cases, accountants, engineers, human resource managers or others decide to make a career change and seek certification at that point. If an organization really wants to hire a facility person from within its own organization, Friday says, the firm will usually pay for the certification if the person is switching departments.
Banking on Business Sense
There seems to be another phenomenon associated with people who come to facilities from other departments: Those who transfer departments make more money. “I would say that those who have come into facilities from outside departments tend to make more than those who come up through the ranks,” Friday says.
Why somebody with an accounting background who moves into facilities might make more than someone who has made their career of facilities has as much to do with different skills sets of each person as it does with how facility executives view their careers.
Some organizations are willing to pay more for a person with a master’s degree in business administration who becomes a facility executive than they are for somebody who has spent a career managing facilities, Friday says. That’s partly because the skills organizations are looking for in facility executives have changed over time.
“I think the reality is that people with a business degree fare better,” Friday says.
Vicky Hardy, academic department head of design and facilities at Wentworth Institute of Technology in Boston, says while knowledge of facilities and related systems is important for all facilities personnel, general business knowledge and skills are keys to success at the top levels.
Although facility executives need not be certified public accountants, they should have some sense of financial accounting principles, including knowing how to read and interpret balance sheets, income statements and equity statements.
“The important ability is to be able to have a coherent, intelligent conservation with the CFO,” Hardy says. “You have to be able to speak the dialect of finance. You have to be able to talk with senior management.”
Seasoned facility executives, while having the real-world experience that no recent college graduate could replace, want to be sure they stay current on technology used in day-to-day business dealings, Hardy says.
Today’s graduates have an advantage over experienced facility executives: They came of age using laptop computers, instant-messaging systems and other information technologies. What’s more, Hardy says, students entering facilities careers understand the importance of learning new software quickly, interpreting databases and staying flexible to technology changes.
“People entering facilities now are comfortable with being wired in,” she says. “That gives them an advantage because it’s no longer sufficient to be just a really cracker-jack facility manager. You’ve got to be able to communicate.”
On the Move
It’s no secret that a person moving from company to company usually earns a higher salary than one who stays within the same organization. Friday says facility executives tend to stay with their organizations longer than those in a financial or high-tech field. While a facility manager might work for one company for 15 years, a computer programmer might work for three companies and an accountant for two companies over that same time period.
Those who switch organizations at such a pace tend to be more savvy — and more comfortable — when it comes to negotiating compensation packages. And there’s more to negotiating than just asking for more money.
Facility executives should be open to being compensated in ways that go beyond cash, Friday says. They should ask about whether bonuses are available based on performance, whether stock options can be awarded, and whether tuition reimbursement and travel to industry events can be included as part of compensation.
More importantly, facility executives should try to negotiate an agreement that sets terms for dismissal should an organization’s facility function be outsourced.
“Nobody likes to think about losing their job when they’ve just been hired, but facility executives should look at what kind of parachute is available,” Friday says.
Facility executives focused solely on salary figures when it comes to negotiating compensation can unknowingly put a job offer at risk. Hardy says most large organizations have predetermined salary ranges for executive positions.
“I’m always surprised that people go into an organization and ask for something the company can’t do,” she says. “If you ask for $150,000 and the most the organization can offer is $125,000, what are they going to do?”
To avoid that situation, Hardy suggests listening carefully to what organizations say during the hiring process. Often, hints dropped during interviews give candidates permission to ask questions about compensation, including things such as tuition reimbursement plans and salary ranges.
If those hints are given, Hardy suggests asking colleagues in similar positions what they make and using published data to get an idea of salary ranges.
“If you don’t get the salary you want, perhaps the company will allow you to do some outside consulting,” she says.
Facility executives trying to use education as a way to earn more money should evaluate what type of advanced degree or certification would help lead to salary increases. Hardy suggests asking colleagues for their impressions of strengths and weaknesses. As difficult as it might be to stomach some of the feedback, she says, the results can be useful in advancing on a career track.
One bit of advice Hardy offers is that facility executives with a general background, such as those with a degree in facility management or master’s degree in management science, should look at becoming specialists in architecture, interior planning or some other focused field. Those with a specialty background should consider broader areas of study.
What has become clear in the age of tightened security is the need for facility executives to keep senior managers informed about facility conditions, emergency response plans and how buildings fit into business continuity plans. Although cost pressures have — and will always — exist, senior management understands perhaps more than ever the role facility executives play in keeping an organization running. Sometimes, they might need to be reminded of that when it comes to salary negotiations.
“Since 9/11, what has come to the forefront is that we are involved in issues that affect human life,” Hardy says.
Data for this report was submitted through an online survey on FacilitiesNet, the Web site of Building Operating Management and Maintenance Solutions magazines. SalaryBase contains data on how much money facility executives earn dating back to 1999.
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