A sector waiting to be recognized
The sector is probably one of the most significant contributors to GDP, but is still in the dark in terms of employment and professional quality control: facility management is desperately seeking a way to become better known and more appreciated.
Regardless of the sector’s young age, facility management is something no organization can live without, as the state cannot live without its added values. Unfortunately, official statistics still lack such a category, but experts estimate that the market generates about 5-7% of GDP and employ 400,000 people (10% of the active workforce).
Most companies know about services such as maintenance, cleaning, security, energy and fleet management, catering, IT or occupational health and safety services. Most also know that it’s best to assign these tasks to a dedicated service provider, but only a few know exactly what to look for in a facility management company. “This profession is actually about risk management, so no one really cares unless something bad happens,” Gábor Décsi, managing partner of Dome Facility Services Group, said summing up the situation. Consequently, the market is saturated but not regulated, in terms of compliance to client’s needs.
The crisis opened new opportunities for some companies that added facility management to their portfolio only to generate cash flow, but without the necessary professional background. This opened the gate to unrealistic price competition – mostly through undeclared employment. Those players that comply with all the regulations can apparently do nothing else but put their trust in the self-cleansing of the market, and wait for a time when clients’ perspective has changed and they are willing to pay more for quality services. But Décsi goes even further: “This purification process is too slow – it should be accelerated by the regulator role of the state.”
Ready to parley
The Hungarian Facility Management Society initiated the elaboration of an extensive strategy for the sector in 2009, but there has been no breakthrough since then. “There will not be such a breakthrough while the Hungarian industry is so insensitive about the work environment,” said chairman József Czerny. He also pointed out that there’s too much talking about the real estate market while concerns should be directed to the clients of real estate.
The largest client would, without doubt, be the state, if it didn’t have it’s own way of managing facilities. Although this part of the market is not yet transparent enough and only a couple of FM companies manage to get orders, Czerny said that in the long-term, this is a perspective to build a strategy upon.
The other large group of clients are MNCs in the industrial, trade or technology sectors, which have the cultural background to demand professional facility management and compliance to certain standards regarding service levels and employment. The only problem is that they are usually local representations of global enterprises and are easily moved if the parent company decides the operation is not effective enough.
Czerny believes education is the only way forward and therefore HFMS is putting this into focus. The chairman (a tutor himself) says the market could accommodate many more than the 20 managers that finish dedicated post-grad training at universities, not to mention the serious shortage of skilled workers and engineers. Experts believe greater emphasis should be put on the training of future professionals that could prepare them for such a complex role.
Opportunities for new services
Beyond the at times unregulated market, the general economic climate, and consequently the struggling real estate sector, presents difficulties for FM companies. Most are trying to widen their service portfolios: it is quite common to overlap services with property management. Leading players are also ready to use synergies presented within a group to better serve a wide range of client demands.
HSG Zander Hungária, which has large multinational clients in various sectors in Hungary, is offering a project plan mapped out by its parent company and ensuring the life-long coverage of a facility, to balance the negative effects of the economy. “We have the advantage of working within a large group and therefore are able to offer a wide service portfolio while still managing to keep core facility management competencies in-house,” deputy managing director Enikő Vanó-Huszár told the Budapest Business Journal.
Although market share, indeed basically any kind of exact data, is considered sensitive by the companies involved, the market still has some room for new players that can offer high-quality services, as shown by the most recent debut of Porreal. Created by the restructuring of the Austrian construction giant Porr Holding, it entered the Hungarian market in April, and can take advantage of instant access to the parent company’s full service portfolio, including property, facility and asset management services. Internationally, Porreal manages the outlet complex in Parndorf, and according to managing director Tibor Karsai, it aims to win the facility management and consulting services of offices, hotels, malls and other trade facilities that appreciate high quality and stability in value.
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