An Essential Support Service

Facility management is one of the most important sectors of the Hungarian economy. The umbrella association of this profession in Hungary works on tackling the challenges of our times and on raising the overall standard in this industry.

As the President of the National Association of Facility Management, Building Operation and Maintenance Service Providers (LEO FM), József Schmidt explains to Diplomacy&Trade, this is a large sector, accounting for approximately 6-8% of GDP. “When you look at the fact that some 15,000 people are employed in LEO FM companies (this facility management profession), you can see that it is a dominant economic field, especially when you consider that more than 15 million square meters of space is managed by LEO FM members alone, which means that the entire profession in Hungary is of even bigger scope.”

Comprehensive service provision
Facilities management is a support service and does not only involve the physical maintenance of the building itself. “It includes everything that is related to the facility. It obviously mainly means maintenance services, which includes cleaning, security, gardening, technical operation and general maintenance. There are also additional services we provide that are not strictly facility management, like office catering, for instance. In addition, archiving and digitization, which takes place in the offices, are also included. This has been complemented these days by activities that are related either to renovation, refurbishment or fit-out, and prop-tech technologies are now also coming to the fore,” the CEO highlights.

Efficiency
LEO FM General Secretary Rita Istiván adds that not only is there a wider and wider technology background involved in the design phase, but it is also more and more characteristic of the operational part after the development. “There are very significant cost efficiencies that can be achieved if these are constructed as smart buildings. Measuring and controlling the different points of use, different modes – all this provide continuous feedback. So, in terms of environmental protection and environmental efficiency, prop-tech is at the forefront: the more of these supports a building has, the more modern and the lower the cost of running it, and the better the uptake we can ensure that the workers feel comfortable,” she says.

Benchmarking
The National Association of Facilities Management and Building Management Service Providers has a history of almost a decade. It was founded in 2014 to help the industry communicate in a unified way, to create professional standards and transparency in the facilities management market, and to raise the overall standard in the industry. It plays a central role in creating a knowledge hub based on cooperation between market players, supporting professional training and education, and developing jointly developed state-of-the-art solutions.

Maintaining the level of service is greatly helped by the organization’s own benchmarking survey, which is now in its fourth year. József Schmidt stresses that their benchmarking research has been very successful. Pointing to the fourth edition of the book containing the latest results, he says the publication includes over a thousand properties and the characteristic numbers of those properties, “which is very important because it's the kind of survey that only exists in the United States. There is no such publication in the European Union, either, thus, the European facility management body Euro FM is also interested in what kind of benchmarking data we Hungarians publish every year. In addition, it was a big step forward to compile the collection of legislation on operations in this field and to keep updating it month by month. Our members receive this free of charge and external partners can purchase access to it. Beforehand, everybody was just trying to gather this information from different sources.”

Human resources
He points out that workforce – the fluctuation, the retention of employees – is also a big problem for the member companies of the LEO FM association. “There is a common thinking in this area, we have launched an HR survey on wages, benefits, and we update it every year. We also have education and training as our flagship activity. We have established contacts with several universities, the first of which is the Budapest University of Technology's Institute of Advanced Engineering Training, where we have signed a cooperation agreement on a partnership in training courses like facility managers, facility management and EU facility managers. We are currently negotiating with the University of Physical Education, where we could possibly join the operation of sports facilities, as currently there are no proper operating rules for swimming pools, sports halls, ice halls or football stadiums.”

Caring for the environment
Today, sustainability is becoming increasingly important in all areas of business. As to what ways and to what extent this is a challenge in the facility management profession, the CEO stresses that “as responsible business leaders, it is important for everyone to be aware of the environmental impact. We think that using renewable energy here is about using products and tools in facilities management that do not have a negative impact on the environment. We in the association are also partners in this. Some companies also have green cleaning labels – national eco-labels – where they use different environmentally friendly products and reduce water use. This is continuously validated year after year. We, as LEO FM, would also like to have a similar certification system in our operation.”

Pandemic followed by war
With the new coronavirus pandemic (hopefully) over, the facility management profession, like other areas of business, face a new challenge, the Russian war in Ukraine. While mentioning the difficulties, the LEO FM officials are optimistic about growth opportunities in their business field.

As Rita Istiván emphasizes, the facility management profession is still needed. “The more development there is, the more new areas can be captured in the market. We did not expect a war to break out, but it is now a reality and has a big impact on the situation we are in. This time, it is not a pandemic situation, it is a war situation. As soon as the pandemic was over, another monster reared its head.”

József Schmidt notes that one of the factors of concern is that the price of numerous materials have gone up. “The sharp depreciation of the Hungarian currency is affecting prices, especially the cost of stationery, various equipment and tools that have to be used for maintenance and renovation. The price of fuel has risen, and energy, especially gas and electricity, has also become much more expensive. Again, this is causing an increase in costs for everyone, and company managers will obviously decide how much of the operating costs will be spent on energy and how much will be spent on operating costs and service charges. That is why the work of our organization’s energy working group has been valued. We believe that out of operation expenses, depending on the activity, between 30 and 60% are currently utility costs, the rest was a purchased service. If we can reduce that gap, maybe our partners can buy more services from the saved amount. If we reduce it, they might think about spending not just on repair, but more on planned preventive maintenance. I don't want to make any predictions, but I am sure that the facility management profession will continue to play an important role in Hungary,” he concludes.