Engineering “Bandwidth”

February 23, 2018 | By: Mark Gallman, SMA, SMT, LEED GA
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THE STATE OF BUILDING ENGINEERING

The news of an economic upswing and consumer confidence is great news. The questions to commercial real estate owners and operators are: Do you have a well maintained and performance competitive property coming out of the latest economic downswing? Do you provide competitive services now? Is your service and maintenance staff staying well trained? Is your staffing level adequate to handle the demand now?

When evaluating maintenance staffing levels, there are many factors to consider. Owner goals are one of the first considerations. Owners may intend to have a long-term or short-term goal for a project. The owner may be an owner/operator or they may be one of many owners in a joint venture project. The owner may be an owner operator with a long-term goal, or may simply contract management and maintenance services.

Steve Harrison with Harrison Property Advisors answered questions from his unique perspective.

How are investments in staffing envisioned by owner operators, third-party management companies, or even some joint ventures?

Harrison: Staffing levels have changed over the years and the number of engineers at a building has been reduced. There may be differences between our company’s philosophy and that of the third-party company, but our goal is to always recommend what we believe is the best process for the building.

How do tenant/customer facilities services affect base building staffing? How do some lease agreements affect base building staffing?

Harrison: Staffing levels are determined by what services are required to keep the building operating properly. Tenants expect service request to be responded to in a timely manner so staffing has to be able to work quickly, to at least respond to the tenant and let them know they are tending to their request. We have found that tenants prefer in-house management and staff on site.

Can you speak on your personal experience for building (asset) value, when you place more in house
staffing on the scales vs. outsourcing engineering services?

Harrison: I’ve always been a proponent of in-house vs. outsourcing. I believe in people and the team, and when we invest in people and our values are instilled in the individual, they are more committed to our best in class program. Our program, education and commitment to our engineers are evident in the results we are obtaining at our properties. I’m not sure we could ever accomplish what we have with a third-party maintenance provider.

What factors affect in house staffing vs. outsourcing? (i.e., benefits vs. cost or liability vs. in house services; long-term hold owners vs. short-term hold projects)

Harrison: Both benefits and cost are a factor when evaluating staffing levels, and the balance between in-house vs outsourcing has to be understood to ensure that the building is being maintained properly. Liability has to be managed whether our team is involved or the outsource team is responsible. From my perspective, hold period, or the length of time an owner plans to own the asset, should not be a factor, the processes have to be managed properly from the start.

How do owners equate ROI to in-house staffing vs. outsourcing or contracting?

Harrison: Maintaining chillers, building management systems and fire systems, to name a few, are usually outsourced. These are complicated systems that need qualified technicians maintaining them. The engineers at the building are required to understand the operation of the systems well enough to know when they are maintained properly. ROI is measured in maintaining the equipment well enough that it doesn’t have problems that were undetected, unexpected and unplanned. Additionally, knowing when to budget and how to identify what the ROI will be when a piece of equipment is replaced is critical.

As building systems complexity increases and building equipment becomes more diverse from building to building; are there any advantages or disadvantages to having adequate in-house staffing vs. contracting or outsourcing?

Harrison: There is no doubt that our industry is moving toward more sophistication in the systems we are managing, which means the people that operate the equipment need to be more qualified. To operate a building at peak performance, the engineer will need to understand the data provided by his system and be able to quantify it in such a way that he can take whatever action is necessary to operate the building properly.

Can you speak to the subject of investing in engineer education? How do owners feel about it? How do managers feel about it? How do you think engineers feel about it?

Harrison: Our experience has showed that if you have a program that is always in a training mode, whether it is internal or offering opportunities for employees to acquire classes outside, the company employees will engage and grow.

What may be some of the factors that affect direct hiring of engineers? (i.e., cost to recruit, cost of benefits, cost to remain competitive and cost of retention)

Harrison: One huge factor with hiring is finding qualified people who are willing to make a change. There is not a pool of qualified engineers that are looking to make a change. There is a huge cost for the interviewing process, especially when prospective engineers are evaluated, tested and put through some sort of qualifying process, such as back ground checks. The time alone spent in the interviewing process is daunting, including the 90-day evaluation period, which may end up letting someone go and starting the process over again. As budgets tighten, it’s sometimes difficult to bring the salary level up to where there would be interest from a qualified individual.

Where would a building owner or operator turn for resources to build a maintenance services team?

Harrison: BOMA Georgia’s BTO has done a great job developing curriculum and working with Chattahoochee Tech to put programs in place. Gwinnett Tech has a similar program as well as BOMI’s SMA and SMT programs. I also believe technical schools have students that are taking HVAC, electricity, plumbing that would certainly embrace relationships that would help them place people when they graduate. In addition, BOMA and online searches such as CareerBuilder are good resources.

Where do you think we are heading? Can we recruit qualified engineers? Do we just move toward more contract services? Is there going to be a “bubble that bursts” or a “perfect storm” where buildings struggle to maintain value and acceptable customer services?

Harrison: I believe it’s time to have more conversations with schools and colleges pertaining to our profession. We need more comprehensive programs that are geared to train students how to be a building engineer. In addition, we as employers need to have programs that promote engineers as they develop and grow. It should never be a dead-end job. It should be one that is attractive to others, especially as young people become better educated and earn college degrees.

With technology, we have been able to trend some very important statistics. The computer maintenance management system or CMMS work order systems that are in use today throughout our industry can help us determine the level of services and maintenance that is required for a project. An example of how to look at these statistics may be to look at the total quantity of work orders or the quality of the work orders. How long did it take to get to and complete the work order?

Perhaps there is a high quantity of work orders but the timelines to completion are high and the staff is working overtime to try to do the actual maintenance and compliance work on a project. There may be deferred maintenance on the project or compliance work is lagging behind. Owners and operators have to be able to sort through all the information at their disposal to try to staff appropriately for their projects.

WRAPPING IT UP

When it comes to the business of offering a commercial real estate product and delivering on the service; economic cycles can play havoc on companies and the decisions that they have to make to stay competitive and deliver the services and products they promise. Understanding all of the factors in making staffing decisions is complicated. Staffing appropriately can be a time-consuming and costly task. Not staffing appropriately can also be costly and can weigh heavily against the success of the owners and operators in commercial real estate. Investing in a well-trained staff with sufficient numbers to meet or exceed the demands of today can add value to
any project.