An economic downturn in the UK will be the dominant driver of decision-making in the FM sector this year, according to research by CBRE, as firms look for better value for money from contracts.
The property adviser has published a report outlining the trends that it predicts will have greater focus in 2023, in the wake of multiple challenges including the cost-of-living crisis, industrial action, energy supply challenges, rising interest and inflation rates, as well as the overhanging effects of the Covid-19 pandemic.
Trends in Facilities Management in the UK concludes that clients will be looking to reduce costs and gain cost certainty, leading to a focus on value for money and partnership in FM contracts, including longer-term, fixed-price contracts that offset the effects of inflation.
There will also be a drive to reduce risk and improve operational efficiency, says CBRE. Building and asset automation will increase, the internet of things (IoT), and a more pronounced migration from planned maintenance schedules to condition-based maintenance will be evident.
Despite the economic challenges, the journey to net zero will remain high on the agenda in
the UK, the report concludes, as failing to act on sustainability will start to have tangible impacts in 2023.
Clients are looking for more and better quality data to support real estate decision-making, so facilities managers need to develop these skills, with data literacy emerging as one of the most important themes.
Balancing priorities will be another feature of 2023, CBRE predicts, as firms also juggle concerns such as hybrid working, diversity, equity and inclusion, and attracting and retaining talent.
CBRE’s report also highlights physical, human and technological trends.
The need to attract and retain top, diverse talent will create a push and pull between workplace experience and the need to reduce facility costs. Visibility of Environmental, Social and Governance (ESG) initiatives will improve talent retention, while Gen Z workers now expect facilities such as wellness spaces and catering as standard.
“We’ll therefore see higher-quality spaces, but with a more curated employee experience in rightsized portfolios in 2023,” says the report.
Energy efficiency and reducing energy consumption will be a high priority in 2023 as organisations continue to reduce their carbon footprints. As well as a transition to procurement of renewable energy and carbon-neutral fuels, there will be more businesses investing in on-site energy production infrastructure. Legislative changes, such as ESOS, will become the biggest driver in capital expenditure, CBRE suggests.
Another big theme in 2023 will be the evolving role of facilities managers, to keep building operations running smoothly while managing data analytics, requiring FMs to implement world-class training, robust talent marketing and recruiting strategies.
There will be a sharp rise in the number of apprentices, graduates and school programmes designed to develop younger talent to bolster the future workforce, according to the report. Training and upskilling will become a competitive advantage for facilities management companies, it predicts.
Cultural transformation including ESG and the return to office programme, hybrid working as well as more serious conversations about the potential for a four-day working week, will see businesses increasingly prepared to invest resources into supporting these long-term organisational needs.
“Facilities management will play an even bigger role in connecting the workplace, improving employee experience, accelerating towards ESG ambitions and driving cultural transformation,” the report states.
Data, analytics and sensor technology, smart buildings and occupancy management as part of hybrid work will become the most dominant technology trends in 2023, the report said, while AR, AI, IoT and DT (Digital Twins) will continue to be on the periphery of the sector in 2023.
As well as challenges there are also opportunities, the report says: “Economic turbulence often leads to innovation when new ways of working become a necessity. It’s therefore likely that we’ll see a rise in collaboration and partnership to create shared value in the facilities management industry.”
The report concludes: “The ultimate conundrum for facilities management providers will be trying to balance the client need for cost optimisation with new uplifts, such as the recent rise to the living wage and the material price increases for both consumable and fixed goods.”