Answering the most common customer question: Why do Facilities services cost so much?

Expert Insight

Answering the most common customer question: Why do Facilities services cost so much?

One of the most common questions Facilities leaders hear from campus stakeholders is: Why do Facilities services cost so much? While every Facilities leader strives to be transparent about costs, rates can still be opaque to customers, whose point of reference is often the price they paid for a project in their own home. This communication breakdown leads to confusion at best and negative perceptions of Facilities at worst.

By better explaining Facilities costs—and why costs tend to be steeper in higher education—Facilities can head off potential aggravation. Here are a few communication strategies to socialize campus stakeholders to the true cost and operations of Facilities.

Prevent sticker shock by articulating necessary components of higher-than-expected O&M costs

Operations and maintenance (O&M) charges are the costs that customers most frequently encounter, despite these services often occurring behind-the-scenes. Customers then become frustrated when they are charged for these “invisible” services at a much higher rate than they’d expect.

One way to explain high costs is for Facilities leaders to outline the nonnegotiable, necessary components of O&M in higher ed. Our Cost and Funding Source Cheat Sheet explains ten drivers of higher costs, summarized below. 

Labor Costs
Facilities must cover high-benefit (and often unionized) workforce costs; can be 30-50% beyond cost of salary. Sharing labor costs may raise more questions than answers for customers. Only share if it will lead to a productive conversation.

Regulatory Building Compliance
Federal, state, and local regulations hold higher education institutions and their contractors to more stringent construction and building standards.

Advanced Safety Features
Institutions strive for the highest level of safety for mission and to ensure the security of students, faculty, and staff.

Durability and Design Requirements
High-utilization environment entails more costly, institutional-grade items to avoid constant replacement. Institutions also often require more rigorous design standards.

Long-Term Mindset
Campuses must construct buildings to last for a hundred years, when most other sectors build for 30 to 40 years on average.

Sustainability goals often require institutions to invest in costly but energy-efficient infrastructure and equipment.

Building Control Systems
Systems that monitor and control building mechanical and electrical equipment such as ventilation, lighting, and fire alarms.

Centralized Systems
Campus-wide systems that serve multiple buildings are more efficient to operate but cost more to build.

Academic Calendar Inflexibility
Facilities must sometimes work around staff, faculty, and class schedules, which changes the cost of goods and services.

Aged Infrastructure
Historic, outdated buildings and infrastructure cost more to operate, maintain, and repair.

For these talking points to be successful, Facilities must effectively circulate this information to customers.

  • California Polytechnic State University hosts an annual open house (free lunch included) to incentivize stakeholders to learn about Facilities
  • The University of Alaska Fairbanks regularly presents to campus units on its staffing levels and budget, how its shop rate is developed, and how Facilities determines charges
  • Pepperdine University hosts an annual orientation for deans that includes Facilities topics like the budgeting process

Each communication strategy reaches stakeholders in many units and at all levels of campus.

Equip project managers to productively engage faculty on capital projects

A second category of Facilities costs relates to capital projects. Here, it’s important for project sponsors to understand costs so they are more informed when making inevitable tradeoffs. In fact, lack of stakeholder engagement is the second most commonly cited factor in capital project underperformance.

To get stakeholders the information they need about not just project costs, but also timelines and processes to expect, we created the Capital Project Planning Toolkit. The toolkit offers five tools to help Facilities staff better educate sponsors about capital projects. These tools simplify conversations between project managers and campus stakeholders, outlined below.

Helps project managers obtain valuable information about project goals from sponsor and pull forward challenging conversations about realities of limited budgets.

Advises how to create a process map that clearly explains the major stages of a capital project and stakeholder responsibilities to a lay audience.

Provides institutions with a framework to map out project scope, stakeholder roles, and deadlines. The goal is to ensure all project participants are on the same page before breaking ground.

Defines the most important and potentially confusing components of capital project costs in nontechnical terms.

Generates preliminary cost estimates for proposed projects through an interactive budget calculator.

Additional resources

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