ERA’s quarterly insights tailored to the Facilities Management sector — tackling cost optimization, sustainability, supplier relationships, and staying at the forefront of industry trends.

Facilities management is a rapidly evolving industry. As the needs of tenants and clients change, facilities management professionals must work to stay ahead of the curve. In 2024, this means prioritizing employee retention, focusing on sustainability, mitigating rising costs, and strengthening partner relationships to accomplish evolving goals.

Competitive Labor Market Challenges Facility Service Providers

  By Randy Mackay, Senior Consulting Partner


Employee turnover continues to impact service providers in all facility services. Attracting and retaining low and medium-skilled workers has become increasingly challenging in the facilities space as historically low unemployment rates (currently below 4%)1 have driven significant wage increases.

According to the US Bureau of Labor Statistics, the average pay for non-supervisory workers in the US for support services has increased 154% over the past ten years and stood at an average of $25.28 per hour in November 2023.2

Meanwhile, 56% of organizations say they have difficulty hiring or retaining employees.3 As new people are hired and take time to become fully productive, quality can suffer.

Facilities leaders are seeing the competitive job market translate into higher costs for services and, in some cases, diminished quality. So, what should decision-makers look for in third-party service providers? Third-party service providers need an employee retention strategy now more than ever. Financial incentives may not be enough to retain workers in critical facilities positions. Today’s employees demand an inclusive work culture that values the individual worker. Companies can attract talent by accommodating schedule limitations, transportation needs, and language barriers.

Since current workers can be the number one source of recruitment for low-skilled employees, it is also important to demonstrate a commitment to culture. Increasing empowerment and teamwork through initiatives such as early access to pay, bonuses for performance, quality, and/or safety, referral incentives, and team celebrations can promote a healthy group dynamic.3,4

KEY TAKEAWAY: To receive the best value and quality from third-party service providers, facilities decision-makers should ensure each
provider has a strong employee retention strategy.

Launch a Recycling Program in 2024

By Ray Jansma, Senior Consulting Partner


In 2021, the United States generated 265M tons of municipal solid waste4, accounting for more than 10% of the world’s solid waste5, and generating $141B in annual revenue for the US waste industry.6

Businesses can reduce their contribution to that $141B by creating waste management plans and by training employees to reduce waste and increase recycling.

Waste management measures companies can implement today

  • Purchase in bulk to minimize single-use containers
  • Improve inventory management to limit spoilage
  • Eliminate single-use plastics from breakroom and cafeteria supplies
  • Use only rechargeable batteries
  • Repair, recycle, or donate old office equipment to keep it out of landfills

Longer-term actions include investments in solar infrastructure and establishing supplier requirements such as electronic invoicing and the use of recycled packaging. Successful waste management requires a cultural shift emulated by company leaders, but there are benefits beyond saving waste management costs — a successful waste management plan can raise a company’s
profile in the local community and help attract new customers.

KEY TAKEAWAY: Reducing waste is not only good for the planet — it also creates cost savings and can generate revenue to increase a company’s profitability.

2024 Light Duty Fleet Outlook

By Gary Grant, Consulting Partner


The prolonged effect of pandemic-related supply chain shortages has subsided, and increased inventory of light duty vehicles in 2024 is expected to lead to higher incentives and discounts. However, fleet incentives are unlikely to reach the record highs seen in 2019 when discounting exceeded 10% of transaction prices. Cox Automotive’s Average Transaction Price index for December 2023 was down 2.4% from the record high set in December 2022.7

Market forces will likely exert downward pressure on vehicle prices in 2024, but savings will come mostly from seller margins (dealer or fleet management company) rather than from fleet incentives. The best pricing will continue to come from factory orders.

KEY TAKEAWAYS: Forward planning is essential to achieve the best fleet pricing in 2024. Fleet managers should consider vehicles needing replacement over the coming year and plan for 8–12-month lead times.

The Scoop on Snow Removal

By Scott Price, Consulting Partner


The North American snow removal services industry witnessed steady growth between 2018 and 2022. Procurement IQ8 attributes this growth to increasing urbanization combined with the impact of climate change and heightened emphasis on efficient winter maintenance. The industry saw a surge in demand for advanced technologies and innovations to improve snow removal
effectiveness and sustainability. Recent weather patterns brought frequent and severe snowfall events, particularly in regions accustomed to heavy winter precipitation.

Inflation, along with higher fuel and labor costs, have driven snow removal service prices higher over the past three years. Rising road salt prices and concerns around environmental impact from its use on water ecosystems are leading to alternative options like anti-icing products applied in advance. According to Procurement IQ, snow removal prices have increased nearly 12% in the past ten years and are set to rise as much as 4% in the next four years.

There are several pricing models to consider as companies aim to manage costs effectively to achieve competitive rates.

KEY TAKEAWAY: As snow removal service prices increase, facilities leaders should consider both cost and price predictability when selecting among contract models.

Energy Cost: Eye on Natural Gas Trends

By Todd McGlauchlin, Consulting Partner


Mild weather through December 2023 led to seasonably low natural gas prices for commercial accounts at the start of this year. According to the U.S. Energy Information Administration (EIA), the United States began 2024 with 14% more natural gas in storage than the previous five-year average.9 This should keep prices low through spring 2024 despite severe weather events in January.

The NYMEX futures outlook for the coming two years suggests a significant natural gas price increase. While the EIA forecasts natural gas demand to increase in 2025, they predict storage volumes will continue to limit upward price pressure. However, there is potential for significant price increases as demand shifts, exports increase, and cooler temperatures replace those of a warmer-than-average 2023.

Facilities consuming large amounts of natural gas should attempt to pull contract negotiations into the spring while prices are low. Longer-term contracts may also offset the potential price increases to come.

KEY TAKEAWAY: Spring 2024 is a good time to enter into multi-year natural gas contracts given seasonally and historically low prices, and the potential for price increases on the horizon.

New Year Checkup: Facilities Management Contracts

By Mike Roberts, Consulting Partner


Facilities Management (FM) contracts can encompass hard services like elevator maintenance, fire protection, water treatment/ management, HVAC, electrical, and building controls, as well as soft services like security, janitorial, food service, and landscaping/pest management. Hard services contracts are typically multi-year agreements which auto-renew every three to five years.

Suppliers in the hard services space saw a dramatic increase in their input costs as wages spiked in 2022, and being committed to long term contracts, many were unable to adjust pricing to accommodate the increased labor costs. According to a recent CBRE report, “the sustained imbalance between input and final costs likely means service providers will try to recoup the previous years’ losses in future contracts.”10

With the start of a New Year, a good practice for facilities leaders is to review current service contracts and re-familiarize themselves with contract term dates, auto-renewal clauses, and annual price increases. By checking contract terms regularly, leaders can cue timely discussions with vendors to maintain optimal pricing and service levels.

Facilities Contract Services – Contract Checklist

  • Take note of contract end dates and auto-renew clauses
  • Review ancillary spend for services not covered under contract
  • Scrutinize contract termination and performance clauses which may offer an exit from an unfavorable contract
  • Review annual price escalation clauses and compare with prevailing wage trends

KEY TAKEAWAY:Regularly reviewing FM contracts may help facilities leaders avoid automatic contract extensions and ensure annual price escalations are within the bounds of current contract agreements.


About the Authors

Randy Mackay, Ray Jansma, Gary Grant, Scott Price, Todd McGlauchlin, and Mike Roberts are Expense Reduction Analysts Facilities Solutions specialists. Averaging more than 28 years of experience reviewing janitorial, controls, waste management, ground maintenance, fleet, and energy expenditures, this group has helped clients identify targeted solutions and Integrated Facilities Management (IFM) partners to optimize facilities costs.



1) Bureau of Labor & Statistics;2); 3) Workforce Turnover Trends; 4) Generation of municipal waste worldwide as of 2021, by select country; 5) Projected generation of municipal solid waste worldwide from 2016 to 2050; 6) Revenue of waste management and remediation services in the United States from 2010 to 2023; 7) Automotive Market Shifts to Favor Buyers as U.S. New-Vehicle Prices Down Record 2.4% Year Over Year in December 2023; 8) Snow Removal Services Sourcing Guide & Market Intelligence; 9) Short-Term Energy Outlook; 10) Facilities Management Cost Trends 2023