(Photograph courtesy of Tencent, JLL).
Ian Bottrell, Managing Director of Integrated Facilities Management, North Asia for JLL, argues challenges faced delivering facilities management (FM) services to international standards within China and the Asia-Pacific region, hold valuable lessons for companies that need to tailor best practice to local market needs.
Step into Tencent’s Dazu office in Shenzhen, China and you may just find yourself in awe of the creative office space designed with different visual themes for each of its eleven floors to inspire and accommodate its largely Generation Y staff. The traditional, gridded workspace has been transformed into a highly adaptive environment with modern facilities to encourage collaboration between employees.
Joining the ranks of the world’s most enviable workplaces, China’s largest internet company is taking a strategic approach toward talent retention and boosting staff productivity as it considers the changing needs of a relatively young workforce. Professional facilities management (FM) when delivered to international best practice standards can help support the creation of a more attractive working environment which, in turn, will support future talent attraction and retention.
Industry giants such as Tencent, Huawei, CICC and Lenovo belong to a new generation of young and dynamic Chinese company that is adopting FM outsourcing to gain a competitive edge against peers struggling with challenges such as accommodating headcount growth, attracting and retaining talent, boosting international credibility, and improving quality management and risk mitigation.
The benefits of successful FM implementations are many but achieving international best practice in emerging markets can present challenges. Let us consider the most common obstacles and the strategies that are being devised to overcome them in China and other major Asian economies.
LIMITED SUPPLY OF FM TALENT
China may be the world’s most populous nation but a significant shortage of qualified FM professionals remains a key challenge for companies considering expanding their operations in the country. At the recent World Workplace Asia (Shanghai) 2013 conference 51 per cent of polled attendees confirmed difficulty in recruiting skilled FM personnel to be the biggest barrier to implementing strategic FM operations across the mainland.
The finding echoes sentiment in Singapore where the FM industry is considered relatively mature; bolstered by strong regulatory support and growing demand from the rising number of multinational companies setting up regional operations in the country. Seventy-three per cent of senior FM professionals questioned by Jones Lang LaSalle for a survey at the World Workplace Asia (Singapore) 2012 conference cited the shortage of skilled FM personnel as the biggest hurdle to the delivery of FM services.
Operational challenges created by low availability of suitably qualified personnel are compounded by high levels of staff turnover (in China, for example, turnover levels within FM currently average between 25 and 45 per cent annually despite typical yearly salaries increasing of between 10 and 15 per cent).
Yet although these staffing challenges might appear insurmountable, there are practical measures that can be taken to proactively develop FM talent. These include: (a) Recruiting staff with general skills (such as service orientation, technical expertise or project management) and providing them with hands on FM training to widen the talent pool; (b) Creating clear, long-term career progression opportunities to retain talent and support succession planning at all levels; and (c) Partnering with industry organisations to develop in-house talent and ensure front row access for new talent coming through the ranks.
THE CHALLENGES OF MULTI-COUNTRY SERVICE DELIVERY
Across Asia delivery of FM best practice in reception, janitorial, security and landscaping services often poses problems as a result of local nuances.
Without a common language and metrics for comparison, making sense of the corporate real estate portfolio can become an uphill task. Standardisation; be it of maintenance practices, business language, real estate terminology or portfolio metrics, allows companies to deal with complications in operating their facilities in line with international best practices.
By way of example, China is a developing economy that depends heavily on migrant workers who are often an important source of labour for soft services. Usually, these workers have attained a lower level of educational achievement than the average population (just 10 per cent of migrant workers currently in the country have experienced education beyond middle school).
When combined with language and dialectic barriers, low levels of literacy can represent a significant obstacle; although one potential solution might be to develop flexible, descriptive and pictorial training programmes. Meanwhile in India (where 38 per cent of companies that responded to a global survey expect real estate portfolio growth over the next three years), the country’s vast cultural diversity is one of the biggest challenges to workplace transformation and the creation of productive and coherent work spaces, since a tailored approach based on a deep understanding of the country is required to accommodate the wide array of languages, religions and cultures.
INCONSISTENT SERVICE DELIVERY
Companies expect consistency in the quality of office space and maintenance across their portfolios.
In China, the sheer size of the country and its cultural diversity across hundreds of cities may function as a roadblock to implementing consistent best practice in FM.
Local teams may not have a grounded understanding of FM functions, and language barriers may lead to miscommunication between remote and central FM teams.
The absence of appropriate maintenance service providers in Tier II and Tier III cities in particular can cause unanticipated issues since few vendors can cover the whole country and none can guarantee a best-in-class service in every geography.
Even relatively low-skill services like cleaning suffer from a lack of quality vendors in remote locations which triggers outsourcing of services to FM partners that have the capabilities to deliver. For example, specialists from Singapore have been flown to China to run maintenance of the clean room and wider facility equipment for a major microchip manufacturing plant in a Tier II city due to the lack of qualified vendors able to deliver locally.
Companies can nevertheless take the lead by providing supplier and vendor training to mitigate the risk of poor service provision across a portfolio.
BENCHMARK DATA AND METRICS
Analysis of benchmark data on the cost and quality of maintenance, utilities and security will highlight whether facilities are being run at optimal efficiency. Many companies maintain inadequate portfolio data on rudimentary systems leading to poor information for decision-making.
As a first step companies might extract data from a portfolio to use as an initial point of reference and benchmark their operations across sites and over time. The most successful models combine the right technology with the right processes and people for data collection and management.
Companies might also consider adopting technology solutions to automate processes and procedures; and thereby create greater efficiencies and consistency.
MOTIVES FOR OUTSOURCING
Outsourcing FM services to specialist providers can be an effective way of gaining access to international industry best practice in emerging markets.
However, it is important to understand the motivation behind outsourcing decisions since reasons can encompass everything from the desire to achieve cost savings or minimise non-core business activity; to achieving improvements in innovation, a requirement for greater transparency, and improved energy efficiency in response to regulatory pressure to meet sustainability targets.
Whilst FM outsourcing in China remains in its infancy with companies adopting a cautious attitude and choosing to deploy in-house models utilising basic out-tasking of services such as cleaning, catering or maintenance, the practice is set to become more commonplace as the landscape becomes increasingly competitive.
Chinese companies may not always be driven by cost savings but do seek to leverage outsourcing as a vehicle for improving standards and enhancing their brand image and overall reputation.
And, as they take to the international stage, improving transparency and ethics will become increasingly important since a robust FM structure based on open and transparent procurement and cost structure models minimises the risk of fraudulent behaviour.
Recent years have witnessed a surge in demand for FM services in Southeast Asian countries such as Indonesia. Whilst their motivation is mainly cost-driven, large local companies are embracing a new trend that favours outsourcing.
As a result, these companies are reaping the benefits of successful FM implementations; including improved space planning, portfolio optimisation, advanced quality management across facilities, and improved risk governance.
FM outsourcing is a relatively new concept for companies in Japan where the FM market is mature in comparison to its Asian counterparts.
Japanese business culture is shaped by the traditional values of politeness and a manufacturing mentality that stresses standardisation and high-quality service delivery; accompanied by antithesis towards outsourcing.
The FM market may therefore be one that is hard for service providers to penetrate although, for Japanese corporates looking to expand their portfolios overseas, outsourcing is increasingly gaining acceptance as a complementary method of achieving delivery on-time and on-quality.
Facilities managers are increasingly under pressure to drive down the total cost of occupancy whilst making portfolios highly responsive to a rapidly changing business environment.
In dynamic Asia, these challenges are magnified by the geographical scale of the region, language and cultural differences, and the presence of mature, emerging and frontier markets.
Yet broader principles can be extrapolated from the Asian experience and applied to facilities management in multicultural cities where understanding and accommodating the needs of staff who often come from different ethnic and social backgrounds will improve an organisation’s ability to attract and retain the best talent.
Moreover, despite cultural differences in countries across Asia, the most successful companies are those that cultivate and manage their relationships with vendors, partners and regulatory bodies.
Consistency is essential since companies everywhere expect high-quality services to be delivered efficiently and cost-effectively.