Outsourcing FM in the public sector

Addressing the growing challenge of unemployment in South Africa requires flexible responses. One area with potential is the public sector facilities management (FM) space, where outsourcing non-essential services can help clients drive down building management costs and create more jobs.

By Jamie Louw

Jamie Louw, financial director, FM Solutions

The job market in South Africa can be classified into two economies: the Real Economy and the Parasite Economy. In the Real Economy, employers pay their workers a living wage. These jobs provide the income, benefits and security necessary to participate robustly in the economy. They also drive production and demand, as well as create tax revenues that support government’s developmental agenda.

On the other side of the spectrum, however, lies the Parasite Economy, where employers fail to pay their workers a living wage. Non-standard hiring practices, such as casualisation and labour broking, fall under this classification; these practices are prevalent in both the private and public sectors.

In contrast, outsourcing differs dramatically from any form of labour broking because it creates fixed-term and permanent employment. Employees are entitled to the full benefits of employment and are afforded protection under the Labour Relations Act (No. 66 of 1995). Outsourcing is a legal form of contracting in the public sector, and in fact serves as an essential cog underpinning the government’s ability to render services to all stakeholders in South African society.

The following are some of the key benefits:

- Risk management and failure reduction

through accountability systems: Through effectively managing risk, the appointed FM service provider ensures that key assets are appropriately maintained, measured and managed. Fruitless and wasteful expenditure is reduced in the process. Accountability systems are also created, with roles and responsibilities clearly defined.

- Value creation and compliance focused:

By outsourcing maintenance services to specialists in the private sector, government quickly gains access to competent and skilled service providers in non-core areas. Using FM specialists also ensures compliance with laws and regulations through the maintenance of appropriate records and standards.

- People and talent management, skills

transfer: Through on-the-job training and

training initiatives, the appointed service provider develops proper succession plans, which allow for skills transfer and the upward mobility of staff. For government, dignified, meaningful and permanent work opportunities are created, which reduce unemployment and increase access into the economy for citizens.

- Process integration and improved decision-

making: When FM processes are integrated through outsourcing, it empowers government to make more timely, well-attuned and appropriate decisions in respect of the portfolios and facilities it operates.

- Development of sustainable, trusting

relationships: As objectives are met and efficiencies improve, a more sustainable, trusting relationship is formed between the outsourced service provider and the government department. This allows for a more united approach to FM outsourcing and helps eliminate misguided perceptions. With all the above in mind, the core objective is to adopt a mutually beneficial, reciprocal approach that positively impacts all stakeholders.