White is Right?

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21 October 2016 | Updated 01 January 1970

ThisWeekinFM chats to Martin White about his career and how he see the FM market changing, particularly with regards to Brexit now that the dust is starting to settle

A little bit about yourself?

With a career spanning over 20 years, I have spent most of these years working in the FM inustry and have seen multiple recessions and have experienced the market change first hand.

In the early stages of my career, before it was now known as FM, it was common practice to secure contracts with 25 year terms with many customers outsourcing for the first time.

Comprehensive contracts were extremely favourable allowing the clients to have cost certainty safe in the knowledge that if something unexpected happened, the service provider then would take on the financial cost.

Due to the recessions and the need to reduce costs, the comprehensive contract fell out of favour with clients opting to take on labour only contracts or contracts that had a limited liability caps set at £500, £1,000 or £5,000.

The recessions forced many organisations to reduce their apprenticeship schemes, which resulted in an aging workforce and particular skills shortages.

In the modern day, my opinion is that FM as a service is now viewed by many as a commodity, by which contracts are awarded on price as opposed to value. Businesses find it difficult to differentiate themselves or at the very least find it difficult to articulate how they are different to their competitors, leading to the price-led contract awards. Designer goods continue to grow in sales as customers pay a premium for something unique or a market leader.

Many organisations are now returning back to delivering the service in-house as they have failed to find a partner that can deliver on their promises.

Your role at Artic

My role within Artic is to ensure the market is aware of the skills, expertise and capabilities that Artic can offer in order for Artic to achieve its growth target.

I have to be able to understand the clients needs and wants and work to turn these into solutions that protect the clients' brands and develops the client relationship sustainably over time.

How has the landscape shifted in the last 3-5 years? Are there new practices that FM companies are adopting?

There has been continued activity within the M&A market with the most recent one being the acquisition of Integral by JLL. This has led to the formation of extremely large service organisations that purport to provide better value through their size and multi-tasking of its workforce.

Whilst true in certain circumstances, this has also resulted in customers becoming less significant to the service organisation due to the size of the client compared to its service provider. In turn this has led to many organisations wishing to engage with smaller SMEs that continue to promote and operate to traditional values of 'Customer is King'.

Another trend is the splitting of services, moving away from the generic FM provider and dividing contracts into Hard and Soft services. Allocating specialist service providers by contract-type, this allows the best of class to be engaged in the project, who will have the specific skills required, best priced parts, industry knowledge and expertise to help clients navigate today’s complex legislation and regulations.

How do you think Brexit will affect the industry?

Initially the market was quite stagnant in the run-up to the Brexit vote with organisations delaying decisions based on the uncertainty of the outcome.

Now that the UK has voted, we have found a significant increase in activity recognising that buildings still have to be maintained, regulations and legislation still has to be adhered to and with the uncertainty removed, capital works projects are being released.

How are smaller FM suppliers placed to react to any market changes as a result of Brexit?

As an SME, operating in London and the South East, we have limited exposure to any market changes as a result of leaving the EU. The only area of future concern will be the rising of material costs.

Picture: Martin White is in charge of sales and marketing at Artic Building Services

Article written by TWinFM Reporter | Published 21 October 2016

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