Comment: Commit for longer

Nikhil Pereira looks at what FM companies could learn from the contract system followed in the hospitality industry between owner and operator?

Nikhil Pereira is the deputy editor of facilities management Middle East.
Nikhil Pereira is the deputy editor of facilities management Middle East.

Contract duration between clients and FM service providers ideally range from three to five years. But, in most cases, the contracts run for 12 months. There is a clause of automatic renewal in such cases, but could the industry look at adopting a more standardised approach?

In the hospitality industry, for instance, an owner signs a long-term agreement with an operator (the likes of Marriott, Hilton or Four Seasons). In most cases the ‘lock-in’ period is for a minimum timeframe of 15 years, with some operators asking owners to commit for 60 years.

MJB Group CEO Roohullah Ramzan welcomes the suggestion of longer contractual agreements. “With most of our clients, we have an automatic renewal anyway. So, yes, if we had longer contracts in place it would at least take away the hassle of paperwork,” Ramzan tells me.

MJB Group is the cover story for the July edition of fmME. Turn to page 18 to read the full interview with Ramzan, as he discusses his company’s expansion plans, taking a UAE-first approach.

Sitting on the other side of the fence, Al-Futtaim Engineering Facilities Management Division’s general manager Yousef Bin Zayed is relatively satisfied with the current standard in contract durations. “It’s slightly different from hospitality,” he says indicating that an operator is responsible for a lot more than just maintaining a building, with matters pertaining to P&L high on the agenda.

Contracts can be terminated, with clients giving operators a three-month notice, and in some extreme cases an FM company is given a one-month notice to wind up operations.

It will be interesting to gauge the industry sentiment and have you weigh in on the contract duration situation — are we lacking an industry standard?

Also in this issue (p. 38) we discuss staffing, recruitment, and challenges faced by FM companies in seeking skilled and un-skilled labour. Recruitment consultants say FM companies need to make job titles and descriptions very clear. And FM companies that go the extra mile and invest in training, learning and development activities reap benefits. Today, engagement is more than just a buzzword, and while a lot of attention is devoted to engaging customers and guests, a company’s employees shouldn’t be neglected.

Ramzan sums it perfectly: “We can only offer high quality services to our clients if we keep our employees happy and satisfied.”

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