The 2016 FM Business Confidence Monitor in Nigeria
Early this year, the British Institute of Facilities Management (BIFM), Nigeria Chapter, and BusinessDay conducted a survey to assess the confidence practitioners and users of FM have in the sector as well as predicting the future outlook. This survey is part of plans to bridge information gap in the sector, predict growth and understanding of FM in Nigeria.
The survey targeted decision makers, clients and those working in the field, delivering FM services on a daily basis, with majority of the respondents from Lagos, some from Abuja and three states of the South East. The fact that majority of respondents were from Lagos is not surprising given that majority of the FM operations in Nigeria take place in Lagos.
The survey clearly indicated a strong optimism for the growth of the sector, given the fact that more blue chip companies, other corporations and sectors like banks, schools, government have started to increasingly use FM facilities. In terms of business performance, respondents felt FM is on an upward trajectory; they described it as fast growing and attributed it to the fact that more people are now aware of FM and its attributes in Nigeria.
More companies, including public sector organizations, now have FM departments, with functions and responsibilities of Facilities Managers more widely known and acknowledged. Other reasons given were that the services being offered by FM companies continue to be varied, with improving standards and easy availability through outsourcing.
In assessing job trend within FM, most respondents were a little wary and did not indicate if they would expand, reduce or maintain current levels of workforce. This is understandable, even as FM continues to grow, it is still perceived by some clients to be a ‘luxury’ and likely to be cut when there is a recession.
As more services get outsourced, companies do not need to directly invest in expanding workforce – those decisions are essentially then devolved to FM companies providing outsourcing services. 14 percent of respondents however did indicate they were planning to increase their workforce in the coming year. Those planning to expand saw potential for expansion through aggressive marketing that would increase client base and so the need for recruitment of more staff, as well as ambitious plans to open up more branches of FM facilities in states.
The use of technology in FM represented an exciting area of opportunity for the respondents. Most respondents were favorably inclined to using technology, and could clearly see how this would improve the growth of FM in Nigeria. Apart from using technology to better manage day-to-day activities of FM to improve efficiency and save costs, the growth of real estate was seen as providing the environment for FM to manage those assets and reduce costs.
Despite the optimism, there were some concerns and caution – the state of economy and recession were seen as having a negative impact on FM, with companies and clients seeking to cut costs, with FM being a soft target. FM companies also face challenges – high costs of maintenance through continuing poor electricity, high inflation rates, lack of access to finance and high exchange rate means high operating costs and low profitability.
The pervasive poor maintenance culture in Nigeria continues to be a cause for concern. Changing the mindset and integrating maintenance into real estate to ensure value will be key to the growth of FM. The slowing down of real estate was another area of concern for some of the respondents.
The overall business outlook for FM is however quite good and positive. Respondents, overall, are planning to expand their clientele base, increase online presence, adopt the use of technology to deliver better services and improve value for money through innovation. There are other plans for increasing machinery, increase capital base and investment, increasing branches and even expanding outside of Nigeria, to the rest of Africa. Practitioners also saw growth in career opportunities and growth within the FM sector.
The conclusion, all in all for the FM sector in the next year, is that of optimism and expansion, even with the current economic crisis, given a record number of respondents, 81 percent, were very positive on business performance, adoption of new technology, expansion and career development with new opportunities for training.
Tunde Obileye