E ntry of MNCs and off-shored jobs has also brought in its wake Facility Management services. Companies in this sector come into the picture soon after the large establishments move into rented or leased urban spaces and look for agencies that could take care of operation and maintenance of the property. Also known as property management, the activity encompasses all classes of real estate projects be they commercial, residential, infrastructure, retail, hospital, industrial or recreational.
Outsourcing came to India in the early 1990s with the expansion of IT and ITES-enabled services. The facility management services began to be conceived only a decade ago. Today, the size of the organised industry is pegged at around $7.6 billion, and has grown at 15-20% over the last few years. According to Sandeep Sethi, Managing Director, Integrated Facilities Management at JLL, by 2020, the sector is expected to cross $19.4 billion. He says the growth of certain sectors like retail, hospitality, Industrial and healthcare and increased presence of MNCs in India are the drivers of growth in the sector.
FM companies not merely enable the clients to focus on their core business activity and free them from other worries, they play a key role in enhancing and sustaining the value of the real estate asset.
Says Raghav Kapoor, City Head, Sila, a firm into the FM sector for the last seven years, the business is growing 20% year-on-year basis. The company today employs around 6,000 workers in 29 cities all across India. Kapoor says today all major realtors have realised that FM companies deliver operation and maintenance services at much reduced cost and higher efficiency. According to Kapoor, the activities undertaken by FM agencies could be divided into 1- soft (pantry, housekeeping, landscape, reception); 2- hard (mechanical, electrical, plumbing or MEP) taking care of installations such as escalators, lifts, transformers; 3- safety & security, emergency, fire etc; and, 4- accounting & billing.
Cost reduction
Elaborating on cost efficiency, Kapoor says FM companies employing large retinue of janitors, plumbers, electricians, mechanics, carpenters, painters and all such other skilled personnel, can optimise their services and take the burden off the shoulders of their clients. In such cases, they also obviate the need for maintaining payrolls, provident fund, ESI for menial staff for the clients. Clients can even jettison costing and billing for use of common spaces and services in larger properties such as shopping malls and residential enclaves to the care of such services. They can procure equipment and spares at much reduced cost directly from manufacturers and wholesalers due to their existing relationship. Even daily consumables such as detergents, shampoos, tissue papers, cleaning agents procured in bulk, bring down the cost.
Besides, there is an additional benefit: the FM companies could put their reliever teams to work for ‘deep cleaning’ and checking of efficiency of electrical, hydraulic and HVAC installations on weekends without interrupting the normal functioning of the offices. Shampooning of sofas or carpets which may not be possible during a normal working day could be carried out on weekends without any hassles.
Faster growth
Kapoor says while Mumbai is still the number one business city and offers the major business opportunities for FM sector, growth in Bengaluru is faster. Sila currently has nearly eight million sq. ft. of commercial space to manage in the city which include malls. Embassy Services, a subsidiary of the Embassy builders, manages 28 million sq. ft. of space in Bengaluru with nearly 125 employees providing a whole gamut of engineering, sanitary and soft services.
A relatively new firm, Zippy, which began operations just 18 months ago, now maintains a workforce of 100 men. They undertake housekeeping and pest control jobs for their clients.
Employment prospects
FM in a lot of ways mirrors the growth trajectory of the IT/ITeS sector, with very similar talent demands as well as talent-related challenges. Sources from the sector point out that there is a minimum year-on-year additional manpower demand of about 14%. If one adds an approximate attrition rate of 25% to this, the minimum employability opportunity is 39% at a principle employer level. At a sub-contractor level there is a similar demand.
Technology-driven
FM is essentially a technology-driven service and without continual upgradation of technology and innovation the services lose their competitive edge. Kapoor says Sila has now its own app that allows facility managers to track attendance of employees at various sites, their performance, wages and hikes, leave, complaints, police verification of employees’s antecedents etc. Sandeep concurs and says technology is playing a decisive role in the delivery methodology of FM services, affording a more responsive and efficient experience to the users of such services.
