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Budgeting Your Building

Tips for in-house facility managers tasked with making tough choices

Budgeting Your Building

It’s that time of year again—the time when you’re tasked with creating a budget that will take your facility through the next several months, or even the next year. There are many factors to juggle when setting up the budget, including allocating costs for hiring, supplies, equipment, special projects, and emergencies, in addition to demands for higher quality work.

To meet and exceed the standards set by your client (if you’re an outside contractor servicing a building) or your supervisor (if you’re an in-house facility manager), you may have to collaborate with outside contractors, make tough decisions regarding your employees, and work with shrinking operational costs. When you decide upon your budget, you must ensure that the quality of work doesn’t suffer, and that you have everything you need to do the best job possible.

According to those in the cleaning industry, the biggest challenge faced by in-house facility managers is contending with lower budgets, while still maintaining standards. In fact, according to Cleaning and Maintenance Management’s 2015 In-House/Facility Management Benchmarking Survey, 90 percent of respondents said reducing overall cleaning and maintenance costs was important to their facility or organization in some capacity.

“There continues to be a cost-cutting focus in this industry,” said Anthony F. Maione, vice president of Core Management Services. “There is a tremendous amount of pressure when budgeting, which puts in-house facility managers in a financial squeeze. They are constantly tasked with figuring out how to continue to produce successful outcomes for stagnant or decreasing budgets.”

Sharon L. Cowan, a certified building service executive (CBSE) and owner of Cleaning Business Consulting Group, stressed a similar point. “They must increase productivity in employees, while often times not increasing wages,” she said. “They must keep on top of every trend and new process in the industry to keep their crews efficient and productive, while staying motivated.”

If you’re an in-house facility manager and having a difficult time coming up with your budget, or want to know how to make the budgeting process better, the following advice from cleaning industry experts may help.

Look at Your History

Whether you’re looking to create your general budget, or trying to figure out how much money to set aside for special projects, you should study your facility’s history.

Mike Koenig, vice president of sales and marketing at TMA Systems, LLC, said management software can help in-house facility managers more accurately predict costs. “You can trend your unexpected costs from prior years. You have the ability to see what your future capital planning needs will be moving forward in order to maintain your facilities at a certain level.”

Some maintenance management systems can allow in-house facility managers to plug in all their past and present information, and then predict funding for the next one, two, five, or even 10 years.

By investing in management software, an in-house facility manager may be able to make intelligent decisions and back up a budget with solid data; this can also help building service contractors (BSC) provide data to clients if they request the information to help with budgeting.

Reevaluate Your Cleaning Procedures

After you’ve recorded your history and processes into your computer, you can start to reevaluate how you perform duties and arrive at your numbers.

“The first step for obtaining the right number is to do an inventory of the space you're responsible for maintaining,” said Jim Peduto, Esq., CBSE, co-founder of the American Institute for Cleaning Sciences (AICS). “You want to look at all the particulars that relate to that space, including flooring, square footage, and types of rooms,” he said. “Step two is to develop a list of tasks for that space and frequencies of the tasks [associated with the space]. Then, apply production rates for each of the listed tasks. The fourth step is to arrive at labor hours required to do the work, and the fifth step is to compare labor hours to the budget you have.”

If you use software, it should calculate the labor estimates needed for any type of situation. For example, Koenig said, if you’re an in-house facility manager at a university and your boss wants you to increase the cleanliness from a two to a three, you can see how that would affect the bottom line. “Once our system is populated with cleaning matrices, you can go in and determine exactly what your impact will be for the labor to support those levels.”

Cut Down on Employee Expenses

Fortunately, and unfortunately, as a facility manager, you also have the role of hiring and firing employees. It is your job to determine employee hours, and how many you will need during the next several months.

When it comes to budgeting, Peduto said, employee expenses are going to be one area where you’re able to cut back. “In any operation, labor is going to be far and away the largest budgetary component where in-house facility managers can save money. Supplies, equipment, and other areas pale in comparison to labor.”

Deciding upon the number of labor hours needed to maintain a facility is a key starting point for your operation. “Many [in-house facility managers] face the fact that it’s been a long time since they reengineered or looked at the number of labor hours that go into task assignments,” Peduto said.

To do this, Maione suggested using a workloading tool “to determine how to achieve adequate work levels with [fewer] people. [That way], you will have the option of not replacing some positions when they become vacant. You’re still meeting cleaning needs because you’ve re-designed your task and frequency in anticipation of having [fewer] custodians in the future.”

Maintain Your Equipment

Equipment is another big cost. It can run you thousands of dollars, and, if it breaks down, you’re going to need to quickly find the funds to replace parts.

“Equipment is becoming more crucial to the industry,” Maione said. “Wide-area equipment, utilizing better technology, can cover more ground and help cleaners perform their duties more efficiently.”

In order to prevent machinery from breaking down, Maione said, in-house facility managers need to be proactive and keep detailed equipment logs. By instructing their employees to do preventative maintenance, they can avoid budgetary problems down the line.

Research Outsourcing Options

Outsourcing some or all duties can lead to your operation running smoother.

“By choosing to outsource, you can mitigate budget surprises by making it more predictable,” Maione said. “If you’ve done a good job drafting your contract [with the cleaning service contractor], you can effectively shift the risk associated with cost uncertainty to a contractor willing to operate under a firm fixed fee.”

If you’re an in-house facility manager and having budgetary issues, you may want to consider outsourcing some tasks. If you’re a BSC servicing a facility, explain to your client about the benefits of outsourcing some tasks and how it could help the operation run more smoothly. If you’re the client, you could let your team know that you’re toying with the idea of outsourcing some services.

Outsourcing only works, however, if both the in-house facility manager and the outsourced contractor are on the same page. They must know their roles, and work hand-in-hand to reach the same goal.

“For the in-house managers, much of their time is spent managing the employees, handling coverage when someone is out, getting the work completed, engaging with human resources issues, making certain of safety compliance, training, discipline, termination, [and] supervision of the work,” Cowan said. “For the outsourcing managers, much of the above mentioned processes are removed from their job descriptions. They deal only with the representative of the building service contractor. The BSC takes on supervision, staffing, training, deficiency issues, quality checks [of] equipment and supplies, and responses to immediate concerns. This allows the facility manager the ability to oversee the janitorial program, make recommendations, and focus on streamlining the operation.”

Validating Your Budget

In an industry where budgets are consistently tight, facility managers are not only faced with cutting costs, but the additional challenge of validating expenses for their department. In fact, in Cleaning and Maintenance Management’s 2015 In-House/Facility Management Benchmarking Survey, 84 percent of respondents said validating/proving their budget to management was important in their operation.

ISSA, the worldwide cleaning industry association, offers a tool for in-house facility managers who may need a hand when it comes to backing up their budgets. ISSA's Value of Clean Calculator is a tool that calculates how items like worker productivity and asset preservation can contribute to savings for an organization, which may come in handy when trying to validate budget expenses to upper management. You can access the Value of Clean Calculator and other tools that help demonstrate the value of clean at www.issa.com/valuetools.

Construct Your Budget

This year, you’re probably going to be faced with more demands than ever. But by utilizing helpful tools, factoring in the correct costs, and taking the building’s history into account, you can set up a budget for success.

Posted On September 29, 2015
Kylie Ora Lobell

Kylie Ora Lobell

Freelance Writer

Kylie Ora Lobell is a freelance writer and content marketer based in Los Angeles, CA. Her work has been featured in publications like NewsCred, Vertical Response, Dell’s Tech Page Oneblog, and Forbes.com’s EMCVoice.

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