5 Tips on Reducing the Effects of Inflation for Facility Managers
Inflation is a national story in the United States and across the globe. In fact, inflation increased by nearly 7% last year. This was the highest rate since 1982.
There is no sign of the inflation crisis ebbing any time soon. The war in Ukraine is placing additional pressure on the price of goods.
The facility management services industry is certainly feeling the effects of inflation. Read on to learn about improving facility management through inflation planning. Explore our five tips on reducing the impact of inflation on your facility management process.
1. Streamline Processes
Many business owners are wondering how inflation works. In essence, inflation decreases your purchasing power with a weaker dollar. This naturally leads to higher costs for your workforce, be it labor, supplies, materials, etc.
One way to reduce your facility management budget is to reduce labor hours. You can cut labor expenses and lower your costs by eliminating steps in your facility management process.
2. Quantity Discount or Consolidating Services
Due to global inflation, the unit price for your supplies is on the rise. Every item that you require is going to cost more.
You can save money by buying in bulk. The unit price of your company’s supplies is lower when you buy a higher volume. While this results in a higher upfront cost, you can reduce expenses over the long term.
Consolidating services with a company like OpenWorks is a similar concept. Here, you bundle multiple services together at a discount rather than having separate fees.
There are numerous technologies and tools in the market to automate your tasking. It is not always necessary to rely on human labor.
Certain duties such as e-mail marketing, scheduling, and other repetitive tasks can be accomplished via automation. The result is that you can reduce labor hours and cut costs for your company.
4. Increase Profit Margin
Naturally, higher costs are going to cut into your profit margin. Most companies are not in a position to simply absorb rising expenses in their supply chain. Ownership and investors alike are certainly feeling the squeeze with shrinking margins.
Of course, you can offset higher business costs by raising prices. There is a downside here, as raising prices too high can potentially curtail demand for the facility management services.
While modest price hikes are acceptable, perhaps the best strategy is to look at increasing profit margins instead. This requires a comprehensive analysis of the expenses that are incurred in your facility management services. On the execution side, it requires eliminating or reducing these expenses to increase profit.
5. Outsource Facility Management Services
Given the rising cost of labor, many facility management leaders are seeking to outsource their in-house services. This can be a very effective way to offload some internal cost pressures by relying on an outsourced provider that has the scales of economy and efficiencies built into their operating model.
Many organizations across the warehouse, manufacturing, healthcare, and even private school industries have come to rely upon an outsourcing partner. And thousands of these businesses have chosen OpenWorks as their facility management partner providing unparalleled quality and customer service through robust technology solutions and a proven network of elite service providers. Learn more about why so many organizations choose OpenWorks and how we’ve earned a 99% customer retention rate, here.
Reducing the Effects of Inflation on Facility Management Services
You now have some ideas to fight back against rising costs. There are solutions to inflation that are executable in the short run. Steps like outsourcing services and automating processes can increase your profit margin.
If you are looking for advice on how to reduce the effects of inflation on facility management services, contact us today to speak with a specialist.
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