The Facility Management Industry Is at a Crossroads

2/7/2024

I typically author management-oriented articles and rarely craft ones that are mostly opinion-based. The new year has me a little worried, however, so I deviated to write about facility management issues that are of concern. 

I see our industry/profession positioned at a crossroads. I view the situation like the Robert Frost poem “The Road Not Taken” where two roads diverge and a decision must be made about which road to traverse. See if you agree with my assessment. 

I fear our industry and profession is floundering. Like two intersecting roads, facility management is lacking solid direction for selecting the right path for the future. Without direction, I worry the marketplace will act on its own and dictate a purpose and role for facility managers that professionals will not like. The marketplace will decide which road we should take, and it may not be the one that provides the best long-term results for facility managers or for the real estate industry overall.  

From my perspective, there are two significant issues driving the call to action. The first issue is the glut of office space and its impact on the industry. The second is the dearth of candidates to step into facility roles as we move forward. Surprisingly, these two issues are not mutually exclusive but inextricably intertwined. 

This article is a call to action to analyze the options for facility managers to pursue and supply aggressive recommendations to guide us into the future. 

Office vacancies  

A January 9, 2024, Wall Street Journal article sounded the alarm. Empty office space in the U.S. is higher than it has been in the last four decades. The number of vacant spaces as of the fourth quarter of 2023 is a whopping 19.6 percent, a number that is higher than it has been since 1979. Even as we acknowledge the fact that the building boom of the 1980s and early 1990s created an overbuilt real estate environment, the current vacancy rate is staggering. Most of the space is contained in office buildings that were built in the ‘50s, ‘60s, ‘70s, and ‘80s era when large private offices were de rigueur for successful companies. As a testament to their success, companies built magnificent towers and campuses with huge private offices for senior executives and top management. 

After the recession of the 1990s and the tremendous economic downturn, a general shift away from these massive office spaces began. What followed were the reduction in spacious offices and the creation of the infamous cube farms that packed employees into smaller office spaces. Although the use of office cubicles has been reduced over the past 10 years, companies continued to shift to smaller office footprints when they reconfigured old or constructed new space. 

Then came the pandemic and the whole real estate market was turned upside down. The concept of remote work took hold and became the direction most companies pursued. Even with the advent of a hybrid work environment, it is predicted the concept of working remotely will never leave the work environment again. 

The vast difference between the surplus office space that resulted from the economic downturn and downsizing in the 1990s and the outcome of the most recent pandemic is that after the first real estate crisis, the economy boomed again. Companies began grabbing premier office space and moving their employees to centralized office buildings and campus facilities.  

Sadly, for this recent space crisis, market analysts predict vacant space will remain with us for a long time because the employment mindset has shifted to the work-at-home environment and companies are struggling with an employment strategy to satisfy this need while ensuring business goals are achieved.  

Geographic areas like the West Coast that once had real estate consisting of vast campuses and high-rise office buildings housing high-tech workers are withering away because companies have embraced the hybrid work atmosphere (at the very least) which allows employees to work remotely part of the time. 

Related Content: Post-Pandemic Commercial Real Estate: A New Era 

What happens to all the vacant space is a question that is hanging out in the atmosphere. There has yet to be a cohesive game plan put forth by leaders in the real estate industry to address the issue. It would seem sufficient time has elapsed since the pandemic to allow a plan to be put forth. Who is advising these leaders on a path forward and how the vacant space must be managed and maintained to protect the integrity of the infrastructure? Who is creating alternative scenarios for utilizing office space and proposing them to key industry leaders? Isn’t it time for the facility management industry to step up and posture suggestions for these leaders to consider? Where is the facility manager voice that should be guiding the decision making? Why aren't the industry associations out front on these issues and supplying overall guidance for real estate professionals? 

An underlying factor associated with the lack of a strategic plan is the resurgence of the debate about the role of facility managers. What once appeared to be a closed discussion has been resurrected and is unresolved for the second time. Is the role of this industry facilities management or facilities maintenance? Perhaps I have been involved in the profession too long, but I thought the industry settled the issue years ago. Has the marketplace expectation changed or has the industry failed to make the case loud and clear?  

If we don’t take a stand (again) -- and strongly support the industry as facilities management -- I fear it will be relegated back to the days when facility managers were viewed as “mops and cops” within their parent organizations. I am making a plea to settle this issue quickly and decisively if there is any hope for facility managers to take a leadership position in deciding which road to pursue. 

Staffing shortage 

If the “call to action” for strategic direction and proposals takes hold, we have solved one problem but have a second one to overcome. Even if our industry is successful in convincing leaders facility management has a dynamic and workable plan, where will the industry get the necessary professionals to implement the plan? We only have a trickle of potential professionals in our pipeline to fill positions and that is nowhere near enough to take us into the future. Again, the industry needs a strategic plan for how to fill the void of new entrants into the profession. 

Dan Weltin’s November/December 2023 Building Operating Management magazine editorial highlights the significance of this problem. He writes about the discussions in the small “huddle group” sessions held at NFMT Remix in Orlando. Weltin reports participants said their biggest challenge is finding qualified candidates to fill positions vacated by retiring Baby Boomers and the turnover in staff created by the pandemic.  

An IFMA Foundation report as far back as 2019 reported a lack of trained technical and trade professionals entering the workforce. Five years ago, the average age of a facility employee was approximately 49, so even then more than half of practitioners were expected to retire in the next five to 15 years. A survey asked participants why the problem existed and discovered a third of employers cited lack of applicants. Lack of experience was cited by 20 percent of respondents, and 27 percent named lack of hard skills or human strengths as a contributing factor. “Globally, more than half (56 percent) of employers said communication skills, written and verbal, are their most valued human strengths followed by collaboration and problem-solving.”   

This issue surfaced even before the pandemic worsened the problem. What have we done to solve the problem in the last five years? It does not seem the industry has accomplished much to reverse the situation and begin to fill the void. Facility management does not appear to be an attractive occupation for young people considering their career options. Why not, I would ask? Why isn’t our industry mounting a massive marketing campaign to make facility management attractive?  

Related Content: Will Hiring Ever Return to Normal? 

Someone needs to take the lead to educate young people on the opportunities in this industry for skilled trades staff. As Weltin mentions, we need to start educating and recruiting children at an early age to instill in them a desire to enter the profession. Again, my call to action to make this happen. 

Facility executives report one of their biggest staffing shortages is in the skilled trades. If Mike Rowe can stimulate interest in a skills trade career, why can’t we do the same? Weltin alludes to the fact that trade schools have transitioned away from teaching trade skills. The facility management industry needs to ramp up and team up with successful advocates for skills training like Rowe to help spread the word on why this industry is attractive. 

Weltin also offers excellent advice on collaborating with veterans’ organizations that are always looking for partners to help them make veterans more employable. I am sounding the call to action for facility leaders to link up with organizations such as Tunnels to Towers and Wounded Warriors Project to set up a cohesive effort to recruit and train veterans. 

In 2023, three leaders from the UK (a former Prime Minister), the chief economic adviser at Allianz and a Nobel prize winner in economics authored a book on a subject they called permacrisis – a prolonged period of suffering from a crisis that appears to have no end. The book outlines a three-part diagnosis and a plan for addressing the overlapping crisis of inflation, poor policymaking, climate change, inequality, rising nationalism and diminishing global collaboration. The plan concludes with a call for global organizations, governments, and decision-makers to be “ready to show leadership.”  

The facility management industry should take a page from their playbook and create a diagnostic method, a strategic plan, and a call to action for industry leaders. The future of our industry is at stake, and we must ensure the right road is taken. 

Stormy Friday is founder and president of The Friday Group, an international facilities services consulting firm.