Welcome, to the seventh edition of the Provider Performance Survey! The Provider Performance Survey has grown to be a widely recognized study in the Dutch FM market and focuses on creating insight into the performance of facility management providers who provide integrated FM services. By the latter, we mean that they provide a combination of FM services and that this includes both operational as well as (part of the) managerial tasks associated with those services. We thereby distinguish between four sourcing models: multi service, managing agent, integrated facility management (IFM) and public private partnerships (PPP).
Our aim is that the Provider Performance Survey will serve as a tool to further professionalize the facility management market. The survey creates transparency in the market, offers providers specific information on how to improve their performance, and simultaneously provides information on clients’ needs. Furthermore, the results may be of value for client organizations in selecting a provider, in defining the set of requirements for providers and as an objective source of information.
The main research question is as follows: How did facility management providers active in the Netherlands perform in the sourcing models multi service, managing agent, integrated facility management (IFM) and public private partnerships (PPP) in 2022?
What makes the Provider Performance Survey distinctive, is the fact that the performance of the providers is assessed by their own clients. The survey is therefore, by definition, objective and independent. The clients of the different providers were approached and asked to share their opinion. In this year’s edition, a total of 122 clients have been interviewed.
The focus of the survey is on the performance of facility management providers who provide integrated FM services. We distinguish between four sourcing models:
The multi service model is a model whereby a combination (or bundle) of a few different FM services is outsourced to one facility management provider. The provider is responsible for the operational delivery of this set of services, ensures the integration of these services and acts as a single point of contact for the client. The delivery of the services is performed by the provider’s own employees and/or by the provider’s subcontractors.
In the managing agent model, the client contracts the (different) providers for the operational delivery of services and in addition to that, contracts a facility management provider as a managing agent. In this model, the facility management provider is responsible for managing the operational providers (tactical management) contracted by the client and for the day-to-day operational coordination of services.
In practice, the scope of the tactical management tasks of the managing agent is rather large. In order to participate in this survey’s category ‘managing agent’, providers are required to perform at least three management tasks as part of their managing agent agreements.
In the Integrated Facility Management model, a broad combination of different FM services is outsourced to one facility management provider, whereby the provider is responsible for the management, coordination and implementation of all those services and acts as a single point of contact for the client. Similar to the multi service model, the facility management provider is responsible for the operational delivery of the services, either carried out by its own employees or by its subcontractors. Different from the multi service model however, is that the provider in an IFM model is also responsible for the majority of the operational, tactical and sometimes even some of the strategic management tasks.
In this model the provider is not only responsible for the management, coordination and execution of the operational facility services, like in the IFM model, but the provider is also responsible for the realization of the ‘infrastructure’. Several types of PPP contracts exist. The most integrated type of contract is DBFMO. With this type, the provider is responsible for the design, build, finances, maintenance and operation of the infrastructure. This infrastructure could be a highway, a bridge, an office building, a hospital, a penitentiary, etc. Given the size of PPS-projects, usually a consortium of different parties (shareholders) is created rather than one facility management provider. The consortium is also known as an SPV (Special Purpose Vehicle) and acts as the contractual partner of the client. Parties participating in the consortium usually include one or several construction firms, a facility management provider and in some cases also a financier such as a bank. The parties in the consortium together develop the plans after which the construction company builds, the financier takes care of the necessary funding and the facility management provider is responsible for the maintenance and operation. PPS-contracts are usually long term contracts, in some cases for more than 25 years.
After three consecutive years in which the average PPO-score showed an upward trend, from a 7,1 in 2018 to a 7,5 in 2020, we see this year that the previously steady increase has come to an end. The average PPO-score of this year is a 7,5, similar to the score in 2020.
Interestingly, over the years we see that the difference in score between the providers overall is getting smaller. Looking at the highest and lowest scoring providers in the survey, the difference between them has decreased from 2,0 points in 2019, to 1,4 points in 2020, to 1,1 points this year. On the other hand, a somewhat counterintuitive observation can be made for the top 10 highest scoring providers in the survey. Here we see that the difference in score between them is increasing rather than decreasing: in the previous edition the score of the 1st ranked provider was only 0,3 points higher than that of the 10th ranked provider, whereas this year the difference is an astounding 0,7 points.
The 1st ranked provider this year is Heijmans, with a PPO-score of 7,8. In the last edition, Heijmans was in fourth place. The number two this year is Flexim, with an average PPO score of 7,64. Number three is Facilicom, scoring 7,62. Flexim and Facilicom respectively ranked fifth and sixth in the previous edition.
Notable this year is Sodexo’s score. With a 6,7 this provider’s score is still more than adequate this year, however we see a significant drop of 0,8 points compared to the previous edition of the survey. It can therefore be concluded that Sodexo falls behind this year.
ISS shows the biggest increase this year. They are up 0,4 point compared to the 2020 edition. With many of the other providers, we actually see a decrease compared to the previous edition. We suspect that the exceptional proactivity that providers showed during the COVID-19 period was rewarded with high client satisfaction in previous edition’s survey, but that this effect has now worn off.
Looking at the PPO scores of the different sectors, we notice that the satisfaction of clients in the utilities sector increased sharply by 0,9 points, that is, from a 7,1 in 2020 to an 8,0 in 2022. Among public sector clients, we observe the opposite, where satisfaction has dropped from a 7,8 in 2020 to a 7,1 in 2022. The potential causes of these relatively large changes can unfortunately not be derived from the survey results.
Since 2020, a variability score is calculated for each (returning) provider in the survey The score indicates how stable and reliable a provider’s PPO score is over multiple editions of the survey. The variability of the PPO score is largely determined by the number of respondents interviewed per provider and by the percentage of respondents returning annually. A larger percentage of respondents returning annually reduces the fluctuation of a provider’s PPO score. With fewer respondents and many changes in respondents over the years, there is a higher chance of fluctuating rankings. In the study, we distinguish between low, average and high variability scores. Providers with a high variability score have relatively low PPO score fluctuation and few changes in (numbers of) respondents compared to previous years. In contrast, a low variability score means a highly fluctuating PPO score due to changes in the number of respondents and a lower percentage of respondents returning annually. The higher the variability score, the more reliable the provider’s PPO score is. That is, when the survey is repeated, the PPO score will be largely comparable.
|Ranking||Provider||Score 2022||Score 2020||Variability score|
The market score of Multi Service providers this year is a 7,6. This is an increase from the previous edition where the average was 7,3. Multi Service is the only category to show an increase this year. It is the first time that ISS is list leader of this sourcing model category, with a score of 8,3. Sodexo is in second place with a score of 7,9. Heijmans is in third place with a score of 7,7.
The difference in score between the best scoring provider (ISS) and the least scoring provider (Facilicom) is, with 1,4 points, relatively large in comparison with the other sourcing model categories.
|Ranking||Provider||Score 2022||Score 2020|
For all themes included in the survey, we see a decrease in scores. This means that, after rising in 2019 and 2020, the scores are back to the level before COVID-19. Most striking is the development of the score for Innovation & continuous improvement. This theme has, since the start of the survey, been the major concern and was always evaluated lowest of all themes and competencies. However, the past years did show an upward trend from a 6,0 in 2018 to a 6,4 in 2019 and a 7,0 in 2020. This year we are back to square one with a score of 6,0, which is one full point lower than the previous edition!
The observed drop in the score for Innovation and continuous improvement is primarily evident in the Managing Agent and PPP categories, and mainly among clients within the industrial sector and the public domain. These clients seem especially dissatisfied with the lack of a proactive attitude of providers in the search for innovations and improvement opportunities and the responsibility they take for this. They expect more from their providers in this area because they believe that the providers have the substantive knowledge and experience. New insights and knowledge gained by the providers from their other clients, is also not proactively shared.
Another interesting observation is that, in the healthcare sector, a contrasting picture is being painted with regards to Innovation and continuous improvement. Here, clients are actually significantly more satisfied compared to the survey’s previous edition. The sector has come a long way, as in 2018 they still scored a 4,2, in 2019 a 5,5, and in the previous edition a 6,0, but this year satisfaction with the theme increased by 1,8 points to a striking 7,8! Healthcare clients are particularly satisfied with the way in which innovations and improvements are worked on in a cooperative way by both client and provider.
After the overall increase in satisfaction during the COVID-19 period in 2020, in which extensive cooperation between clients and providers was crucial, an overall decrease in satisfaction is now being observed in 2022. Now that COVID-19 has largely passed and basic services must again be delivered as agreed, the clients’ expectations have also, from a temporarily higher level of understanding and empathy, gone back to normal. This is especially evident among clients of large organizations who also operate outside of the Netherlands (more than 10,000 employees worldwide).
The biggest decline in satisfaction is visible for the competency of Proactivity, which also happens to be the lowest rated competency in this year’s survey. Important to note is that, if providers are able to score well on this competency, it significantly affects the total satisfaction of the client with the collaboration in a positive way. This is reflected in the high score that was given for the importance of this competency. Due to its low ranking in the survey but the high importance given to this competency, there is certainly room for improvement here. This is especially true for contracts in which the main scope pertains to soft services; here the provider’s commitment to a proactive attitude appears to make a substantial contribution to the overall satisfaction of the client. Opportunities for providers lie mainly in initiating regular contact with the client about the services.
Collaboration is also very important for clients. Satisfaction with this competency is particularly influenced by the extent to which the client is satisfied with the cooperation on common goals. Although Collaboration is scored lower in 2022 than in 2019 and 2020, its score is still above 8.0, which is a great result. The Collaboration competency, of all competencies in the survey, is the most important contributor for a positive client assessment. Collaboration is especially evaluated highly within IFM contracts. Clients in the Governmental sector seem to have the highest expectations when it comes to Collaboration and evaluate this competency the lowest.
Overall satisfaction in the market has stabilized after years of increase. With an overall score of 7,5, the 2022 result is equal to the 2020 result. At first glance, this is not an outcome that may raise concerns. But underlying, we do see a trend that demands attention. In fact, on a more detailed level, we see a downward trend in the scores. We suspect that this is the effect of the COVID-19 period, where clients were temporarily more satisfied due their providers’ quick anticipation and response in an unusual situation, but this has now worn off along with the crisis.that we were faced with. A second frequently heard reason, which has placed additional pressure on client satisfaction after the COVID-19 period, is the increasing shortage of well-qualified employees in the market, which affects the service delivery of providers.
The difference between the highest and lowest scoring provider has fallen from 2.0 points in 2019, to 1.4 points in 2020 to 1.0 point this year. Moreover, we also see the underlying differences narrowing and we see less outliers. We see that over the years, the smaller providers were usually the ones that performed very well. Thanks to their agility and customer focus, they were better at creating true connection and collaboration with their clients. These providers, such as Kien (now Vebego), Arrange Group (now HEYDAY), have recently merged into “mainstream” providers. An analysis of the effect on client satisfaction shows that clients, in this new set-up, feel less well served than they did before the merge. The result is a drop in satisfaction and an absence of high-performing outliers. New “boutique players” have not yet come to the forefront or have too few relevant clients to be included in the survey.
In 2020, Managing Agent was the best-performing model. And it has been, consistently, in the past years. This is mainly thanks to the flexibility and independence it allows for when it comes to the Managing Agent’s management tasks versus the performance of operational services by other providers. Especially in COVID-19 times, where flexibility and independence were greatly valued, it was not surprising that the Managing Agent model scored well. Remarkably, Managing Agent is the lowest scoring sourcing model in this year’s survey. We see one possible reason for this decline, which is the disappearance of the “boutique players” in the market and the absence of D&B in this year’s survey.
If ‘Flexibility’ was the magic word in 2020, now it is ‘Collaboration’. The better the cooperation between client and provider seems to be, the higher the client’s overall satisfaction. Fortunately, Collaboration is also evaluated well on average (higher than a score of 8,0). The high satisfaction is seen across the board, though it must be noted that the Governmental sector has above-average expectations towards its providers in this area in comparison with other sectors. The IFM model performs best when it comes to Collaboration, compared to the other forms of outsourcing. Alignment with the core business, Integration of services and Customer management remain themes that affect the overall satisfaction score the most and are very important for collaboration.
A breakdown of different sectors included in the survey reveals that the Industry and Government sectors are significantly less satisfied than others. This is particularly surprising for the Governmental sector, as satisfaction in there tended to be high throughout the past years. Another interesting observation is that in the Utilities and Healthcare sectors, unlike in the other branches, satisfaction has risen to such extent that these sectors have actually achieved the highest scores in the survey this year.. Healthcare clients are especially satisfied with the way Innovations and continuous improvement is worked on in collaboration between client and provider.
For the first time, hard service providers outperformed their soft services peers. Although the difference is small, a 7.4 and 7.3. Interesting to note is that clients have come to find other elements important in the collaboration with hard service providers. In 2020, clients believed that Connection to the core business, Craftsmanship, and Contract compliance were particularly important, these are factors that are somewhat more technical of nature. In 2022, these have been replaced by softer factors such as Service Integration, Collaboration and Commitment.
Of all client organizations included in the survey, 98% have indicated to find sustainability (very) important. And although the scores that providers receive from their clients for sustainability are more than adequate, clients do not yet experience the proactivity and equality that suits them. To large extent, they experience that their providers have a lower level of ambition when it comes to this topic and show (too) little proactive behavior. Remarkably, in a contractual sense, there is certainly no effective governance on this topic yet. Moreover, there still seems to be a lack of specific and measurable goals as well as a lack of fixed agreements.