I’m part of a minority in FM networking circles: I started off ‘in-house’ and despite making a number of career moves, somehow I’ve managed to stay there. It’s been more by chance than by conscious design, though I have tended to express a preference towards in-house opportunities because I think they suit me fairly well. In fact, I’d even go so far as to say that I’m something of an advocate for in-house FM. But this blog is not about whether it is better on to be client-side or the supplier-side: this blog is about the differences that matter to an FM professional. And it started with an email.
The email was from a respected industry peer. In contrast to me, their background is supplier-side, but they had an opportunity to interview for an exciting client-side role. It was one of those too-good-to-resist opportunities with a very well known brand name and as they didn’t know much about how in-house FM worked, they thought it would be a good idea to reach out to their network and ask? They wanted to understand how things get done. Things like; how in-house FMs deal with budgets, KPIs, planning, etc? Who the stake-holders are and what interactions are expected, who ensures compliance, do we get audited, how do we support culture, how is success measured, etc? These are all excellent and fundamental questions I replied and you should definitely ask them at the interview because I really can’t answer how they might do it. I can tell you how my organisation does it, or how any of my previous organisations do it, but each of them do it differently. You see the thing about in-house FM is that it can vary significantly.
At its core of course, in-house FM is interested in all the same things that outsourced FM is: the basic need to provide safe and comfortable work environments and the amenities that support the work activities taking place. Things like budgets, SLAs, risk management, legal-compliance, etc, all derive from this. But what is really different is the way in which business needs are determined, defined and met. The outsourced FM industry is well established and as a result of learned best practices, good procurement principles and supplier convenience the basic framework of most outsourced contract arrangements are broadly similar. Now that is not to say that there isn’t a great deal of variation in the way that outsourced FM is delivered, but just to say that a supplier-side FM moving from one contract or employer to another will generally feel like they are on familiar ground, because the framework behind the service set-up is broadly similar.
In-house FM is different. It has more flavours than a well-stocked ice cream parlour. An in-house FM moving to a new employer could well find themselves feeling like they’ve tumbled down the rabbit hole and ended up in wonderland: the basic needs are the same but there are no hard and fast rules about how they are met.
It all goes back to the basic agreement between client and supplier for the provision of services. In an outsourced arrangement we refer to this as a contract, in an in-house provision we might generously call it a strategy, although it could just as easily be based upon the attitude of key players (including the FM), policies, financial organisation, organisational hierarchy, culture, history, attitude to risk or a multitude of other factors. It’s an important difference: at the heart of the client/outsourced-supplier relationship, there is a (legally) binding agreement that defines the client’s needs, the required services, expected quality standards, the principles of measuring success, etc. If these needs change, they get re-negotiated. In an in-house arrangement, the agreement for the provision of services between client and the FM function is much less tangible. It might be documented, though partially documented or undocumented are equally, if not more likely. But regardless of how well defined the agreement might be, the chances of it being binding are slim to none. This can be something of a double-edged sword: the existence of a contract can shield an outsourced-FM from the worst excesses of whimsicality and prevent goalposts from unexpectedly getting up and moving around the pitch, but absence of that very same binding agreement gives a canny in-house FM an inherent flexibility. An In-house FM can re-write policy, define new standards and bend, flex or even change the rules completely if they can exert sufficient influence on those that define needs, set standards or determine budgets.
So what does this mean in practice? Well take KPIs and SLAs as an example. In an outsourced arrangement, performance measures and success criteria are usually defined by the contract. The outsourced FM at least knows and understands the rules of the game and the rules cannot be changed without their agreement. The downside being that sometimes this can lead to slightly farcical situations, such continuing to report SLAs which have ceased to have relevance or carrying out unnecessary actions simply to serve the needs of an SLA or even being able to demonstrate success despite it being evidentially obvious that a service is failing.
Most In-house Facilities functions will also have an interest in SLAs and KPIs and may report on both internal and external ones. However in-house FM is a lot more “personality-driven” and the rules around performance measures and success criteria (particularly the internal ones) may be much less clear. They will often be based on what a senior executive deems to be of importance or interest and they can change as quickly as the weather during Wimbledon. Half a dozen complaints could be enough to see a new KPI established and a change of personnel might completely change the landscape overnight. In a personality-driven landscape, requirements can vary depending on the role of those further up the hierarchy: whilst it would be grossly over-generalising to say that a Finance director would only be interested in cost saving and a HR director in colour-schemes, it is obvious that the FM function would be influenced by the objectives and priorities of the role to which it reports. Of course the great thing for an in-house FM is that personal influence cuts both ways: An FM who is able to exert sufficient influence can make quite sweeping changes.
Now although I’ve focussed my explanation on performance indicators and success criteria, the situation is very similar for most of the other areas my peer was asking about: budgets, interactions, standards, etc. In general the big difference between in-house and outsource is that: the outsourced arrangement is inherently stable and is great for delivering a standard (which in many cases can be very high) and ensuring compliance. Whilst in-house FM is inherently flexible, which provides potential opportunities for FMs to take a more direct role in needs definition, specification and method of delivery. FM’s working in the outsource-sector usually have access to a level of support, resources, expertise and knowledge from within their own organisations that in-house FMs in all but the largest organisations would give their right arms for and are protected to a certain degree from flights of fancy and sudden changes of direction. But on the other an in-house FM is playing without binding rules (legal compliance aside) and the only real barriers to increasing funding, services or changing the culture are the extent to which the FM can exert their influence. And FMs are excellent influencers.
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