5 January 2018 | Herpreet Kaur Grewal
Facilities management service providers have been facing stagnating profitability, buffeted by factors such as rising cost inflation from the National Living Wage and the uncertainty surrounding Brexit.
Now the collapse of Carillion has raised important questions about how outsourcing is carried out, putting the sector in the national spotlight.
Separately, a report from professional services consultant EY suggests that to this can be added the problem of increased competition from SMEs.
EY reviewed the available accounts for 22 FM firms with operations in the UK. Their average EBITDA margins have remained stagnant at around 7 per cent during the past three years. In comparison, revenues grew at an average of 14 per cent last year.
A separate survey by the Social Market Foundation suggests that as many as 14 per cent of workers in accommodation and food services, and 9 per cent in admin and support services were born in the European Economic Area (EEA). Depending on the terms of the UK's withdrawal from the EU, FM firms could face increased costs to hire labour.
But are these really the key challenges that FM service providers face? Or will other issues take precedence? What do you think are the biggest challenges for the sector as we head into 2018 and especially now in light of the collapse of Carillion?
- Rising cost inflation from the National Living Wage
- Shortage of European Union workers due to Brexit and related issues
- Other (please state)
As ever, we welcome your views on all of the above. Please click here to take part in the survey.
If you have any extra comments email us at [email protected] after voting.