Where Do You Stand? — Compare Your FM Organization vs JLL’s Benchmark Survey (Part II)
O&M trends show increases in Work Order demand and cost per Work Order
What you need to Know — Increasing Work Order Costs and Volume are Squeezing FM Organizations
In part II of the JLL survey, Corrigo CMMS user data is analyzed and presented. It validates the qualitative results from part I (“Do more with less”). Key insights include:
- Work order volume has increased > 50% since 2018 (HVAC, Electrical, Plumbing)
- Average work order cost has increased by 27.2% since 2020. This includes a 17.9% increase in labor cost and a 31.5% increase in material cost (both subject to significant geographic variations).
- The national average work order cost ($1,045) now exceeds $1,000.
Work Order Volume — HVAC, Electrical, and Plumbing See Significant Growth
The work order volume for HVAC, Electrical, and Plumbing trades grew at a pace consistent with historical data - undisturbed by COVID or other macroeconomic factors. Some of this work is due to energy efficient asset replacement. Since the summer of 2018:
- HVAC work volume has increased 7.82% year over year (YoY) for a total increase of 45.7% (2018–2023).
- Electrical work increased 9.80% YoY for a total increase of 59.6% (2018–2023)
- Plumbing work increased 13.89% YoY for a total increase of 91.6% (2018–2023)
This means that work volume continues to grow at a steady rate for providers and internal technicians everywhere.
The amount of work being done today (# of work orders processed) is significantly larger than the level being done in the pre-COVID environment. FM organizations are challenged to accomplish this in the midst of labor shortages, budget constraints, and hiring freezes.
Work Order Cost Data — Cost Increases Driven by Increases in Labor & Material Costs
Work order data was analyzed to calculate the national average work order cost in North America by trade between Q1 2020 and Q1 2023. The average cost, across trades, was $821 in Q1 2020. In the three years since, the average cost has grown to $1,045, eclipsing the $1000 threshold.
- National average work order cost increased from $821 to $1,045 for a 27.2% total increase over three years (8.4% annually).
- Labor cost component per work order went from $530 to $625 for a 17.9% increase over three years (5.6% annually)
- Material cost component per work order rose from $600 to $789 for a 31.5% increase over three years (9.6% annually)
- On average, work order cost ($1,045) is ~60% labor and ~40% materials. Note that not all work orders include material costs.
- The increase in cost to maintain facilities (8.4%) has outpaced inflation (based on 2.9% CPI from 1980–2020).
Regional Cost Data
Total work order costs are volatile and increasing across the board in every geography. There is, however, significant variability between regions. For example, material costs are up 93.6% in the Washington DC area (avg. was 31.5%), while labor costs were down 6.7% in the New York City area (avg. was up 17.9%).
Conclusion
Analysis of the CMMS work order user data reinforced the challenge cited in part I “to process more work orders with less staff and smaller budgets”. It also highlighted the complication that inflation (of labor and material costs) brings to the situation.
A main takeaway is the necessity to leverage technology to improve both productivity (output / input) and efficiency (useful output / input).
“Technology moves operations ever closer to greater FM efficiency” — JLL Report
How We Can Help You Do More with Less
Virtual Facility’s technology for alarm and integrated workflow management helps you improve efficiency and productivity, while managing work orders at scale:
● Streamline the Reactive Work Process — Work orders can be triggered directly from a BAS alarm(s) and dispatched manually or automatically via CMMS.
● Automate Workflow — “Automation rules” create and dispatch work orders automatically for alarms that meet pre-defined criteria.
● Reduce Ineffective (Repeat) Work — Real-time status on work success provides a feedback loop to improve performance (if the alarm doesn’t clear or it returns in 24 hours, then the repair was not successful).
● Targeted Business Intelligence — Predefined analytics serve up actionable insights to evaluate FM performance and provide real-time data to support repair vs replace decisions.
● Mobile App Capability — Respond to and monitor alarm-driven reactive work from anywhere.
Email us: makebetterwork@vfacility.ai
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