HOUSTON, Texas – The landscape industry has spent much of the last decade anticipating a wealth of new business opportunities becoming available as landscape and grounds work at large corporate campuses, universities, municipal parks and other similar properties were bid out instead of being managed by in-house crews employed by the property owner. In many respects, that trend has never materialized as these property owners have elected to continue managing their own grounds.
This isn’t to say, however, that this outsourcing hasn’t taken place at all. A recently released study from the International Facility Management Association (IFMA) found that landscape maintenance is the fifth most commonly out-tasked service by IFMA members, behind architectural design, trash/waste removal, housekeeping and facility systems. Such out-tasking, defined as hiring one contractor to handle one service, was more popular with survey respondents than the more financially lucrative out-sourcing, where full-service vendors are hired to manage a wide array of responsibilities on a property.
The survey noted that "despite a trend to consolidate the number of vendors used, the average number of contract vendors is 20." A majority of the respondents also indicated they used the same number of vendors in 1999 as they did in 1997, while, surprisingly, 32 percent of respondents used more vendors in 1999 than in 1997.
Despite this data to the contrary, facility managers reported that outsourcing services is part of their companies’ strategic plans. In particular, they are interested in outsourcing when those services require "specialty skills that are unavailable in-house or not cost-efficient to handle," which provides lawn and landscape professionals with two key points to build their sales presentations around. Additional outsourcing reasons included increasing focus on core competencies, acquiring access to specialty tools and equipment, adding flexibility, enhancing quality and improving customer satisfaction.
Part of the appeal of outsourcing for many landscape companies is the idea that after receiving the contract they would be able to hire the facility’s employees who were previously maintaining the property. However, only 25 percent of survey respondents said they see this work successfully because "contract staff are less likely to integrate with in-house staff and the benefits offered by the outsource provider do not necessarily match those of the organization."
In fact, 63 percent of the respondents reported that all new staff is usually brought in when they outsource a landscape job, compared to just 18 percent who say their existing staff is typically hired.
Portions of the IFMA survey dealt specifically with landscape maintenance. When asked how they typically monitor landscape service quality, 77 percent of responding facility managers said this is done through their own personal observation. This was followed in popularity by regular/continuous inspections (65 percent), monitor complaints (51 percent), occasional "spot checks" (48 percent) and require that specific, measurable standards are met (38 percent).
The majority of outsourced landscape contracts – 57 percent – are one-year deals, with 42 percent being multiple-year contracts. Meanwhile, the contract basis is generally built around a defined level of service (75 percent of the time), with 19 percent of the contracts requiring specified deliverables. And when it comes time to negotiating a payment structure, 75 percent of the contracts include fixed prices, 15 percent include a performance penalty or incentive, and 9 percent are based on cost plus a fixed fee.