Savings offer CBRE the opportunity to reduce costs, but also to improve efficiencies as often efficiencies are the key drivers in reducing costs.  We must remember that Savings are often linked to a Client contract and this must form an integral part of the Contract negotiations with the supplier.

Saving drivers vary by account maturity, business vertical type, contract size and labor hours-FTE count.

Itemized below is the list of the key savings drivers in addition to key areas where vendors tend to inflate operating costs to cushion margin.

Increasing levels of productivity 

Cleaning task frequency optimisation based on building space and occupancy / traffic

Contractors are developing strategic / consolidate relationships and are reducing cost through customer / geographical leveraging

• Monthly driven by improved equipment, cleaning process task sequencing and training 
• Waste-stream management at occupant level - centralised waste 
• Continued deployment of high-efficiency / autonomous equipment 
• Continued gains to proper sequencing of environmental preventative maintenance and advances in air filtration
• Scalable programming based upon changing levels of workplace occupancy / density 

Cleaning task frequency optimisation based on building space and occupancy / traffic

Industry Productivity & Savings Trends

• Driven by required enterprise-wide cost control measures
• Embracing of an "outcome-based" performance model, rather than prescriptive 
• Mobility / tracking of an on-site activity resulting in declining service-level requirements, smart monitoring 
• Higher-efficiency workspace management / hoteling 

• Required emphasis on "back-of-house" support including:
  • Training and Safety 
  • CMMS programming development 
  • Occupant / employee / cleaning associate tracking 
  • Planning and quality control

• Organisations demanding lower cost of ownership:
  • Outsourcing as a model
  • Fewer allocated internal resources
  • Distraction / cleaning tour amplitude management / avoidance
  • Leveraging core competencies

Specifics

"Stripping-out" Hidden Margin

Pricing Component

How

Average %

Mitigate

JAN-022 - Ver 1.1 (Apr 23)

Wage Rates

Benefits

Governmentally-influenced wage factors i.e. social security | pension | etc.

Indirect Expenses

Subcontract Expense / Tenant Services

Overhead

Profit

Failure to pay negotiated wage rates based on seniority

Overstating governmentally-required | CBA | Guild benefit % to labor

Overstating %’s to labor

Overstating expenses related to materials, equipment, communications, technology, consumables, regional management allocation, etc.

Overstating subcontract expenses (double-dipping on allocation of OH and profit / Utilizing base building labor 

Not market relevant based upon competition and annual spend (the higher the annual spend, the lower the OH %)

Not market relevant based upon competition and annual spend (the higher the annual spend, the lower the profit %)

3%

2%

2%

5%

2%

2%

5%

• Supplier to provide validated wage report monthly (do NOT accept Excel summary)

• Abstract CBA | Guild agreements

• Abstract governmentally-influenced wage-related expenses i.e. federal | state base wage rates, etc

• Validate expense elements to market-relevant %’s, secure itemized schedule of expenses | amortization | define allocations
• Decouple consumables

• Decouple subcontracted expenses and direct source
• Decouple hard | soft floor care

• Engage Category Management
• Test market

• Engage Category Management
• Test market

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