6 Ways Field-based Businesses can Increase Profitability

Field-service based businesses, such as those in the facilities management, engineering services, utilities and pest control sectors, face many challenges including skills shortages, intense competition and increasingly demanding service-level agreements. Louise Orrell, who specialises in transformations for field-based companies, looks at some of the key things firms can do to drive profitability.

1. Optimise workforce alignment test 

All field-based businesses will have their existing workforces spread across different geographies. But as contracts come and go, employees tend to remain largely static. Over time, the misalignment between where contracts and workers are based can grow, resulting in over-resourcing in some areas and under-resourcing in others. 

This, ultimately, leads to inefficiencies, skills shortages, backlogs and poor service. To understand whether you have the right skills in the right places, compare the available working hours by skillset in each geographic area with the work volumes in each area. If misalignments are low, natural attrition can be used to progressively improve the match by recruiting what’s needed rather than like-for-like replacements. 

If misalignments are significant, a restructure may be required to get a good fit. If you have an excess of a valuable skillset, can you specifically target new work to fill that capacity? If you have very limited demand for a particular skillset, consider outsourcing. 

2. Improving work density 

Working efficiently across large geographic areas with few resources will always be challenging, so it’s important to build geographic density. Highly concentrated areas of business will maximise your employees’ time on site and reduce unproductive travel time. 

Sometimes the answer is to exit areas or turn down shiny big contracts where you don’t have the employee coverage and it doesn’t add up economically. It can be hard to make this type of decision and feel like you’re going against your natural instincts, but if it doesn’t add up from a work density perspective, don’t do it. 

3. Protect your volumes 

Unplanned contract losses can be catastrophic, so make sure you have clear retention plans for all key contracts well ahead of their renewal date. Build and maintain an active sales pipeline to replenish and grow the contract base in core areas. 

It’s also important to understand your contracts in the wider context. Sometimes a contract may look weak in isolation, but it could be vital for supporting several other contracts and potentially more profitable clients because it gives you the skills density and capacity. Losing it could impact your capability to deliver many other contracts in a profitable way. 

4. Understand and maximise billable time 

Accurately measure what percentage of field hours are billable versus those which don’t directly generate income (such as driving to a site). As a rule of thumb, around 85% of your field team’s time should be revenue generating. 

If you’re falling short, this comes back to earlier points around optimising workforce alignment and density, but you can also look at batching work – carrying out planned maintenance at the same time as unplanned reactive work. Also, multi-skilling your people as much as possible means they can do more once they’re on site. 

Technology can help and there are very good systems available that will automatically schedule jobs for you, taking into account factors like live traffic and predictive failures on assets – but remember they’re only as good as the data you feed into them. 

5. Manage comprehensive contract risks 

To be competitive, it’s likely you’ll be taking on a certain level of risk when it comes to managing assets. A common mistake I see is that companies are quite bad at assessing that risk and end up taking on too much of that financial risk by offering comprehensive cover. 

I always recommend companies do a thorough survey early on to identify assets that are in poor condition or reaching the end of their life. Negotiate these out of your cover and response time SLAs. Otherwise you’ll end up rebuilding their assets at your own cost. 

Importantly, successful projects have exec team members sponsoring implementation in their area of the business. You have to treat this as an organisational change, not just an IT one, so your cross-functional change team is important. Consider the impact that the new or upgraded system might have on people and processes. What will you need to get ready for this before you start? Keep to standard processes – don’t reconfigure as this will bite you after go-live with subsequent upgrades. 

6. Look for extra work 

One of the easiest things you can do to increase profits is identify extra work outside of your core contract. From small projects to major refurbishments, additional work – particularly outside of normal hours – can be priced at a premium and deliver high margins. You’re also proactively improving the estate, which can often mean a happier client. Set extra-work targets for your contract managers to help drive this. 

Taking a holistic approach. 

Every company has its own unique challenges, but these are several of the ‘big levers’ field-based businesses can pull to improve service delivery and profitability. Implementing change can take time – it requires a holistic approach across all areas of the business, a clear roadmap and stage gates to manage change carefully. There will be challenges, but tackling change in the right way can produce transformative results.