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2C— February 26 - March 10, 2016 — Commercial Office Properties — M id A tlantic
Real Estate Journal
C ommercial O ffice P roperties By Glenn Ebersole, Hollenbach Construction, Inc. Commercial property maintenance: Outsource or perform in-house?
T
oday’s businesses and organizat ions con- tinue to evaluate the
method for companies to main- tain their assets. Basically there are three (3) approach- es to commercial property maintenance management: In-house staffing, a hybrid of in-house and outsourcing and complete outsourcing. Each company reviews their individual needs to determine which of these approaches may be applied and to what extent to meet their maintenance and other goals. Commercial companies re- view the key advantages and disadvantages of outsourcing maintenance with particular focus on cost, work quality, ob-
taining expertise, tools, equip- ment and technology, risk reduction and management focus on core business. ADVANTAGES OF OUTSOURCING Core business focus: Out- sourcing enables company management to concentrate on their core competencies and strategic objectives to con- tinue and enhance sustainable growth of the company Cost savings: Cost control is a driving issue for commercial and other businesses and a prime consideration for out- sourcing. In-house staff wages and benefits (such as pension,
medical, vacation) continue to increase and in many cases have become too costly for the company to subsidize and sustain. A contractor has more flexibility to adjust the num- bers of employees faster than in-house staff and hiring costs are absorbed by the contractor. An outsourced contractor as- sumes the burden of these and other financial liabilities as- sociated with their workforce. Staffing flexibility, exper- tise and work quality: An outsourced contractor can quickly provide flexibility in delivering the proper staffing level and required skills with
less cost and time investment. In addition the contractor can provide expertise that may not be available, or is insuf- ficient within the in-house staff. This expertise also posi- tively impacts the quality of the work being performed. It provides the flexibility to utilize specialized services as needed, instead of incurring the added cost of developing in-house competencies that are not needed on a permanent or continuous basis. Personnel issues: Outsourc- ing of the maintenance func- tion means personnel griev- ances, disciplinary actions and issues become the responsibil- ity of the contractor. Payroll, time keeping, labor relations, HR, benefits, etc., are handled by the contractor which re- leases company management from the responsibility and time requirements of perform- ing those functions. Tools, equipment and tech- nology: An outsourced contrac- tor can provide staffing that is well trained in the use of the most current technology. This eliminates the need for the company to provide training to the in-house staff in its use, or spending money to acquire and implement the technology. This is also true for special- ized tools and equipment. The contractor is required to sup- ply the tools and equipment to perform the work required. DISADVANTAGES OF OUTSOURCING Loss of control: Outsourcing the maintenance function may be cost-effective, but there are restrictions when working with contractors, such as the client company’s inability to directly manage and instruct the workforce. Another ex- ample is it may be difficult for a service provider to fulfill all of a client’s requirements such as staff flexibility or craft availability within the client’s expectations. Also, the client and contractor may have dif- ferent approaches, manage- ment styles and philosophies, which can lead to conflict. Lack of availability of cer- tain skilled talent The location of the commercial property in certain markets may mean that the skilled talent pool may be limited and the re- quired skill sets may not be easily obtained. It could also mean that these special skills that must be acquired outside the market may command a continued on page 20C
advantages and disad- vantages of o u t s o u r c - ing various professional services and functions as c o m p a r e d t o keep ing
Glenn Ebersole
those tasks in-house. Com- mercial property maintenance is one of those services being reviewed. Outsourced contract maintenance is becomingmore and more prevalent as the
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