With construction projects in the Gulf estimated to be worth in excess of US$1 trillion in value, what kind of impact will this have on the facilities management profession? Becca Wilson reports.
A recent report published by GulfTalent, Construction Sector Employment Trends, claims ‘staff shortages look set to continue for the foreseeable future’.
It states that ‘companies in the sector are finding it increasingly challenging to attract the quantity and quality of engineering and managerial talent needed to staff their projects’. But what effect, if any, will this have on the FM sector?
“I suspect the impact will be limited,” said Andrew Barker, operations director of Integrated Services at Serco. “Where there is overlap in terms of skill-sets, I believe that FM/service companies are probably offering better terms, conditions and accommodation. In addition, although employees can move from project to project, projects end. The service industry probably offers greater security – and better working conditions.”
The report concludes that the biggest construction activity has been in the UAE and Qatar, however Barker believes that “although the FM industry is starting to develop in a number of UAE and GCC countries, the greatest development to date has been in Dubai with fast-developing interest in Abu Dhabi, Bahrain and Kuwait.”
The sharp increase in construction, along with other key factors, has meant the industry is now seeing a lack of skilled construction staff. Whether or not this will impact the FM industry remains to be seen. However, Barker thinks that before the industry assesses the situation it needs to understand what it means by ‘FM staff’.
“If we mean facilities managers/management staff I don’t see a knock-on effect because most facilities managers would not, typically, be interested in construction-related work. Where there may be an overlap is in civil engineering and other maintenance-related skills. These skills may be the order of the day in certain facilities (for example, large residential projects) but not in the service delivery of day-to-day services to commercial facilities,” explained Barker.
“However, there probably will be a shortage of FM staff available in Dubai in the future – unless accommodation and other costs are recognised in salaries. There is little point in moving to Dubai for the lure of a higher salary if it is eaten up by a higher cost of living.”
Up until recently, the industry has been recruiting many staff from India. But the country’s boom in construction and FM is now impacting on the industries in this region due to potential staff choosing to stay in India. With this in mind, companies are now having to source staff from other areas of the world.
“Salaries for good FM staff in India have risen dramatically. I have seen staff on salaries of INR400,000 (US$8,950) a year four years ago and now earning salaries of between INR15-35 (US$33,520-78,222) a year. Recently, an individual moved to a position with a package of INR60 (US$134,100) however I think we will still continue to see more junior facilities management professionals coming from India.”
As the industry in India is expanding, so is the skill base. Barker thinks it will continue to be the young professionals who are keen to get overseas experience on their CVs. He said: “The sad thing is that many of the FMs that have come from India have been disappointed at the lack of sophistication in the FM industry here. These are people who have come from managing complex, multi-faceted service delivery operations in large campus facilities to managing simple property management or residential estates.”
With companies and recruitment agencies finding it more and more difficult to recruit from the region, focus is now shirting to other areas.
“I guess we will continue to see more staff coming from the Philippines but my own experience of FM in the Philippines is that it is generally not as advanced as it is in the major metros in India so it will be harder to find people with the right level of experience,” states Barker.
Other key areas to target are Malaysia, Thailand and Indonesia as people from these countries are willing to work for less. Employing people from sophisticated, built cities like Singapore, China and Hong Kong isn’t cost effective, regardless if they are perfect for the job or not.
But with major developments constantly being completed, the demand for staff to maintain these buildings is rising.
And of course, there is the issue of ‘what is FM’ to consider. Many local firms are still trying to understand the concept and how it can benefit a business. But Barker firmly believes that it is not an emerging concept anymore. “It is relatively newly introduced to Dubai and the GCC but the knowledge is largely imported. In my opinion the knowledge and experience is already here and generally ahead of the current market needs.
“When we see more commercial end-user driven projects and more organisations letting total FM contracts instead of ‘out-tasking’ service silos, the industry will start to show its worth. At the moment, local organisations have not latched on to the benefit of using FM companies as managing agents (i.e. they keep the contractual relationship with the ancillary service providers to avoid a supplier mark-up on pass through costs) so there are very few total FM contracts in Dubai today.
“This is all part of the learning curve and parallels the development of the industry elsewhere where companies started by managing manage in-house and ‘out-tasking’ discrete services and then recognised that it’s better to have variable costs than fixed costs: it’s an expensive way to do business; they don’t measure themselves as strictly as they manage a supplier, etc,” added Barker.
When asked if FM companies will start to turn down major contracts because they are not able to keep up with the rate in which buildings are being handed over, Barker simply said, “yes.”
The FM’s will have the upper hand in terms of picking and choosing the contracts they want to bid for. “Any good FM supplier will not bid for work that they don’t have the capacity to do well. It will encourage FMs to be more selective in the opportunities they choose but maybe vanity and marketing will lead some suppliers to bid for the prestige projects.”
“FMs will have upper hand in choosing contracts they want to bid for.”