Chris Kenneally, CEO at The Cordant Group, talks about the talent gap within the service industry in his second article for Infologue.com.
Chris writes: “One of the biggest challenges for any organisation is attracting, recruiting, training and retaining good people. This is certainly the case for the service industry and I believe that if the right measures to address this issue are not put in place quickly then it will have a highly detrimental effect on the service sector and the vital support it gives UK business. Our ability to grow and innovate will be affected because we don’t have a sufficiently skilled workforce.
“In my opinion there has been far too much reliance by organisations on government-funded initiatives such as apprenticeships and training schemes and far too little investment by the service providers. This is understandable as we operate in a sector where margins are extremely tight and customers are often driven by cost. But something is going to have to change moving forward if we are to plug these skills gaps and continue to build a service industry that benefits everyone.
“How do we convince our customers that they need to take some responsibility for contributing towards this by relaxing their tight hold on the margins they are prepared to allow their suppliers?
The Living Wage
“The introduction of the new Living Wage, as announced by the Government, is set to create additional tensions and strain throughout the UK supply chain. It will be paid to workers aged 25 and above and initially will be set at £7.20 an hour, with a target of it reaching more than £9 an hour by 2020. According to the Office for Budget Responsibility it will give a pay rise to six million workers but is also expected to cost 60,000 jobs and reduce hours worked by four million a week.
“One thing is for sure, it will have a dramatic effect in the cost of services and someone will have to pay for it. In the retail sector for example, where costs are extremely tight, there is not enough margin for retailers to absorb this additional increase so it is likely that the consumer will end up bearing the cost. What is inevitable is that as organisations look to claw back some of this additional cost they will cut back on what they believe to be non-essential areas such as training thereby further exacerbating the problem.
“At Cordant Services we have over 2,000 bus cleaning and support staff looking after more than 70% of London buses. On average our teams fuel, clean and shunt around 6,000 vehicles every day within the M25 area. Our contracts with Transport for London’s (TfL) Bus Operators attract the London Living Wage (LLW). This is not something that we as a business decided but is actually part of a commitment by TfL and therefore the Bus Operators.
“Our experience of the LLW has been mainly favorable and so I am hopeful that any issues caused by the new Living Wage will be relatively short term until the industry adapts and I personally believe that everyone should have the right to a salary that takes into account the costs of living and working.
“So what can the service industry do? Well certainly technology can play a huge role in reducing the cost of service delivery thereby potentially freeing up money that could be reinvested in training – although in the current mindset any savings would be returned to the client.
“The key to this is embracing technology and the benefits it can bring. This is something that we as an industry are often slow to do. In fact I would go as far as to say that there has been a full generational gap in the FM world when it comes to technology and what we are due to see is a kind of third industrial revolution.
“The key challenge here is also about the people in the industry and whether we are able to change the extremely traditional FM approach and actually embrace the opportunities that technology can bring. This is particularly hard as there is a perception that more technology and automation will mean less jobs although this is not necessarily the case. One way to change this is through education and the FM trade bodies need to step up to the mark and ensure that all courses and professional qualifications reflect this need for change.
“Customers will also need to change the way they procure – moving away from treating FM as a commodity and actually allowing service providers to demonstrate their expertise and deliver these technological benefits.
“At Cordant we believe in the technology that matters and this is how we develop solutions for customers. When considering new developments we put them into three categories: essentials that can really deliver business benefits; things that are nice to have but we need to be certain they will pay for themselves; and bluesky building blocks. The latter category is often very exciting but it is often too early in its development to be of real value.
“The general concern within the industry is that the introduction of technology will mean a loss of jobs as ‘technology takes over!’ I don’t believe this is a real issue. Certainly good technology can help create efficiencies but it can also help in the welfare of our staff which in turn will help us to retain them.
“For example at Cordant Services we utilise a leading edge system to harvest ‘intelligent data’ to help us ensure our workforce is healthy and fulfilled. This is a technique used by some of the world’s top football teams who analyse the performance of their key players, log any injuries they sustain and assess how far they can run and for how long. They then make individual plans for that player’s future career.
“Ok so we may not have David Beckham or Jack Wilshere on our staff but to us our superstars are just as important. By logging meaningful data about work environment and history we can better match skills to key roles and improve the productivity of individuals whilst increasing the longevity of their time with us. This results in a continued rejuvenation of their career and is a key weapon in the fight to keep good staff.
If in doubt – do it yourself
“Ultimately we, the service industry, are responsible for our own destiny and we have to make this work. Earlier this year Cordant Services announced it is investing over £1million in an industry leading initiative designed to attract new people into the sector and help them to develop into the business leaders of tomorrow.
“We spent several months interviewing over 200 people and recruited 14 ‘cadets’ of varying ages and backgrounds from outside the industry, including an ex-professional rugby player and a teacher. They all have some sales experience but have never worked within the FM arena.
“The ‘cadets’ will follow a two-year training programme at Cordant’s newly created Sales Academy, which includes both practical and classroom modules, where they will be mentored by a member of the senior team. The course has a detailed curriculum and covers a wide range of facilities management knowledge and skills. The resulting qualifications will be aligned with BIFM membership grades and the cadets will undertake practical and work-based assignments, bringing value to the business.
“We know this is a bold initiative but we believe that the market will benefit from an injection of fresh new talent that will bring in ideas and working practices from other sectors. In return we will teach them the necessary sector specific skills and give them a professional and structured development programme that we hope will lead to a long-term successful career path within Cordant Services.
“In conclusion the service sector is facing a skills shortage that is being exacerbated by a number of issues such as the introduction of the new Living Wage, a poor and confused perception of the industry, increasingly tight margins and failure by organisations to address the issues. This is likely to have an extremely detrimental effect on its future unless new initiatives are undertaken swiftly.”
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