Recession and the P-Word

The comments on my “Welcome” post made consideration of what we now seem to be terming a recession as somewhat inevitable. One or two articles of late have addressed the question of whether or not FM is “recession-proof”, so I thought I’d offer a very summarised view of my own starting with what I see happening around me on a daily basis which – to my mind – answers the question unambiguously.

Firstly, clients tell me that they’re being asked to accept budget reductions, projects put on hold, pared-down maintenance regimes and continuous scrutinisation of headcount. When tender activity is considered, it’s more with a view to reducing expenditure than it is to aligning service delivery with business need, and this is reflected by internal targets that relate largely to savings and little to service enhancement or customer satisfaction. And the softer services – those that aren’t “critical” to the core business – are feeling the pinch most of all… never mind the effect on staff morale & retention, eh?

Secondly, suppliers tell me that they’re seeing their margins squeezed on existing business, and that client tender strategy is focussing purely on bottom line savings, regardless of service and quality issues that arise as a consequence (e-bidding/e-auctions are probably cases in point, and worthy of a post in their own right!). “Best value” at the bid stage is seemingly no more than a sound-byte as clients opt for the cheapest solution; consequently, innovation is the first casualty as the safe option is to stick with the tried and tested formula.

So… does this scenario suggest an industry that’s recession-proof?

Quoting from one of the comments I referred to earlier, how about this as a stake in the ground… “The resilience of the FM industry in times of recession is surely linked to the resilience of the clients that the FM industry serves”? That’s undoubtedly got to be relevant, but is it enough to simply acknowledge the issue without trying to be proactive and (dare I suggest) creative in overcoming it?

When purse strings are tightened it’s all the more important for the relationship between client and supplier to work effectively; that way, collaboration follows as a matter of course and both parties start to progress towards the achievement of common goals & objectives. Sensible sharing of risk, incentivisation as well as penalisation, and openness & honestly are all part of the equation.

Hang on, though… isn’t that what partnership is about?