Strategic Analysis of Singapore's Facilities Management Reveals Immense Growth Potential
Increase in manpower costs spurs transformational growth strategies of FM companies in securing new contracts
Research Overview
Manpower cost is the main reason for price increase in FM services in 2020. For cleaning and security services, the increase in manpower costs is associated to Singapore’s progressive wage model (PWM). Price increase in FM services is also attributed to improvements of other fringe benefits, such as bonus pay-out.
COVID-19 constraint will be an emerging reason for increased inflation rates in 2020 for all services across all buildings types. Other cited reasons for possible price reduction are bundled contracts, change of contractors and contracts (from conventional to performance-based), price war or competition, and use of technologies that replace manpower.
In particular, cleaning cost has increased in 2020, and it is expected to experience the same trend in 2021. This is due to more cleaning demand from new buildings, compliance to PWM, increased salaries of manpower, local qualifying salary increase by $100 from $1,300 to $1,400 as per Singapore’s Ministry of Manpower (MOM) regulations, and additional work scope due to COVID-19 prevention.
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