Facilities Management Services Sourcing Intelligence Forecast To Register CAGR Of Over 12% Till 2030Posted by rahul nikade on April 17th, 2024 Facilities Management Services Procurement Intelligence In this facilities management services procurement intelligence report, we have estimated the total cost of ownership which is divided into five major segments. These are reactive maintenance, energy, capital projects, technology and oversight, and preventive and recurring maintenance. Reactive maintenance can account for between 30 - 35% of the TCO share. Under this TCO, the main cost elements can be further broken down and simplified as - labor, materials and supplies, energy, taxes and government policies, purchase, delivery and installation, training, maintenance, water, health and safety, and disposal. The cost of materials has increased significantly from 2020. Because of shortages of labor that have interrupted supply chains, demand for some commodities has outpaced producers' capacity to produce and distribute supplies. Facilities management is also facing more challenges as a result of the rapidly rising cost of energy. For instance, the price of crude oil increased by more than 30% at the end of September 2023 from July 2023. The production cuts initially announced by Russia and Saudi Arabia in July 2023 caused a sharp spike in international crude prices. This in turn put additional pressure on the world economy through inflation. As a result, oil prices spiked to USD 97 - 100 per barrel in September 2023. According to the CBRE 2022 report, the cost of natural gas (commercial) has increased by 42% in the last two years, which has negatively impacted many operators' and facilities managers' bottom lines. The price of commercial electricity had risen dramatically and was up by 15% in 2022 over the previous two years. Overall energy prices skyrocketed especially in H2 2022. In the U.K., for instance, in 2023, the average cost of a business electricity unit is approximately around 29 - 31.3 pence per kWh. Order your copy of the Facilities Management Services category procurement intelligence report 2023-2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis Rate Benchmarking The geographical location, scale of business, type of business, and industry served play a vital factor in analyzing the rate benchmarking of the facilities management services category. Geographical location considerations can have a significant impact on the rates of services. In emerging markets such as Brazil, India, and Mexico, the cost of labor is significantly lower than the developed countries like Germany, Japan, Canada, the U.S., etc. For instance, the annual salary of a facility manager in Germany ranges between USD 105,000 and 120,000. In Canada, it is around USD 100,000 - 110,000 annually. Compared to these, FM Managers in India earn USD 15,000 - 20,000 annually. Salaries again can differ based on factors such as skill, years of experience, domain expertise, etc. With a turnover of more than USD 75 - 85 billion annually, Germany is regarded as the largest facility management market in Europe. Most of the largest FM companies are based in this country. A few examples include the Köberl Group, M+W Group, etc. The salaries for facility managers in Germany are very high compared to the rest of the countries. This is because companies need to adhere to strict European FM standards, health and safety guidelines, and ESG regulations which force the companies to make high investments in this sector. On the other hand, recent studies in 2022 have shown that there is an increased offshoring to India, particularly for FM services to take advantage of the lower labor costs and better-integrated services. Indian companies are looking into integrating facilities management with allied services like energy, real estate, and personnel services. By providing a thorough overview of all services, this integrated approach facilitates decision-making and improves management effectiveness. Supplier Newsletter
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