Risky business: How relying on in-house FM services increases costs, raises liability, and opens the opportunity for a future reduction in force
OpenWorks whitepaper highlights the risky downside of insourcing FM services.
Did you know that companies and organizations that have not thoroughly researched the concept of insourcing regarding their janitorial and facility management providers are risking their companies?
Traditionally, people believe they have greater control when they rely on in-house facility management and cleaning crews. However, this belief couldn’t be further from the truth.
This whitepaper shows how outsourcing can reduce operational risk, help you regain control over daily activities, and save money.
While facility services is a relatively small 2%-to-5% budget line-item cost, behind it lurks a multi-million-dollar operational risk that financial, operational, and facility leaders are not considering when they choose to insource commercial cleaning. In-house cleaning crews and facilities management teams don’t save the company money. Instead, they expose operations to various risks:
• Failed regulatory audits can lead to millions of dollars in fines, hurting your bottom line and margins.
Between February 1, 2022, and January 31, 2023, OSHA issued citations to Dollar General with nearly $7.5M in penalties. Alternatively, the company could have invested in new technology to improve warehouse efficiency.
• Employee illnesses, injuries, and attrition impact operational productivity.
The transportation, health services, and manufacturing industries account for 77% of occupational injuries and illnesses. And on average, in the U.S., absenteeism costs employers $3,600 per hourly employee per year.
• Degraded work performance reduces plant production, inventory turns, customer service quality, and KPIs, including profit per employee.
A 2019 study found employee satisfaction to have a substantial positive correlation with customer loyalty and a substantial negative correlation with staff turnover. The correlation with productivity was also strong and reflected in higher profitability of business units.
• Customer frustration or discomfort negatively affects brand affinity and customer satisfaction.
More than service and your employees, cleanliness matters most for 92% of consumers when deciding if they will become repeat customers. In addition, hidden costs, including employee turnover, frequent hiring, ongoing training, workers comp claims, and damage to facilities often result.
Risk always lurks around the corner every day. This original whitepaper authored by OpenWorks demonstrates why outsourcing janitorial and facilities management is a consideration that should be weighed heavily and thoughtfully.