Business Services - Channel Intelligence Report - 15 September 2021
The latest insights, observations, and opinions on the global business services industry based on crowdsourced insights with industry experts.
Spend Levels Show Recovery as QoQ Spend Improves with Offices Partially Reopening; Clients Based in the US Report Labour Shortages Among Suppliers; Supplier Counts Remain Flat YOY; 63% Hold Optimistic Trading Outlooks with Hopes Offices Will Fully Reopen in 2021
Spend Levels Start to Recover as QoQ Spend Improves with Offices Partially Reopening Over the Last 90-Days
- Spend levels started to recover over the last 90-days compared to the prior 90-day period, marking a significant QoQ improvement. However, there was volatility in spend levels among the respondents with some countries seeing offices fully reopening amid easing restrictions and others seeing restrictions reinstated as a result of the spreading delta variant.
Securitas and Ecolab Observe Flat Spend YOY as Full Service Suppliers See Spend Levels Decline Across Select Services
- Facilities Managers that reported using Ecolab and Securitas as core suppliers had seen spend levels trend flat or unchanged YOY due to stable demand levels observed across both pest control and security services. Allied Universal and Rentokil also saw near-flat YOY spend levels with only a slight decline on average. Full-service suppliers recorded larger declines in spend levels due to specific services being cancelled, such as reception services or food catering.
Clients Based in the United States Report Labour Shortages Among Business Services Suppliers
- Respondents based in the United States indicated that their suppliers are struggling to find staff due to government benefit programs and COVID relief funds supplying low-wage employees with more income than they would receive by returning to work. Respondents noted that some suppliers had to raise their wage rates in order to find enough employees to service their clients as a result of these programs which had increased their prices.
Pricing Trends Remain Mixed and Broadly Unchanged YOY
- 80% of respondents reported flat or unchanged YOY pricing levels over the last 90-days. Respondents that had seen prices increase generally were located in the United States and noted that prices had risen because of the labour shortages. However, the majority of respondents had multi-year contracts with their suppliers and had seen prices remain flat or unchanged over the last year.
Supplier Counts Remain Flat or Unchanged YOY in Q3-2021
- 28 out of 30 respondents interviewed in the last 90-days were using the same number of business services suppliers compared to the same time last year. Although the number of suppliers remained the same, in some cases respondents reported changing their suppliers due to poor quality of service or because their contracts had expired and they had negotiated with new vendors.
Cleaning and Janitorial Cited as Most Commonly Used Service Followed by Pest Control and Manned Security
- 100% of the Facilities Managers we interviewed in the last 90-days were using cleaning and janitorial services and noted a specific emphasis on cleaning given the situation surrounding COVID-19, citing the importance of making employees feel safe as offices reopen. 90% of respondents were using a pest control supplier and 87% said they required manned security.
Facilities Managers Suggest Their Relationship with a Supplier is the Most Important Factor When Selecting a Vendor
- 24 out of 30 or 80% of respondents listed having a strong relationship as a core criterion when selecting a business services vendor. This was closely followed by pricing, selected as a key criterion by 23 out of 30 or 77% of respondents, and performance and reliability which was selected by 19 out of 30 or 63% of respondents.
Allied Universal Receives Highest Average Satisfaction Rating as Terminix and Mitie Group Leave Clients Unsatisfied
- Facilities Managers interviewed in the last 90 days gave their suppliers an average rating of 3.6 out of 5. G4S, now part of Allied Universal, received the highest average rating with 4.2 out of 5, closely followed by ABM Industries who received a rating of 4 out of 5. Mitie Group and Terminix received the worst average satisfaction ratings, with 2.7 and 1 out of 5, respectively, as clients were left feeling under-serviced.
63% of Facilities Managers Hold Optimistic Trading Outlooks with Hopes Offices Can Fully Reopen in 2021 Barring Any Setbacks
- 19 out of 30 or 63% of Facilities Managers interviewed in the last 90-days reported that they are optimistic about their future trading outlook over the next 6-months. This represents a significant improvement in future trading outlook expectations in the last 90-days when compared to the prior 90-day period. Most respondents were optimistic that offices could fully reopen by the end of the year amid higher vaccination rates and easing restrictions, barring and COVID-19 related setbacks.
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