Korea IFM, The Lagged 30 Years and 1 Year’s Obsession

These days many people come up with a question “What is IFM?”, and where to find information about it. However, it is not easy to understand the concept of IFM and not much information is available to learn in depth. It is a pity that Korea is far lagged behind compared to other global IFM markets.

Recently, many global companies with a branch in Korea reach us to get help in introducing IFM service in their Korean branch. But most of them are directed by their headquarter offices to get the service through global IFM companies having branch in Korea.

Dong-Ju Park CEO of Gold Bricks FMS(GB FMS)

They fail to find local service providers who can deliver IFM services, and ask us if we can provide IFM service that meets the global standard. After realizing that there is local service provider who can provide IFM service with a global standard, they persuade their headquarters or regional offices to get service from local provider. The most common reaction is that they get surprised to know the existence of local IFM service provider in Korea.

There is no doubt in that kind of reaction. Some of the global IFM companies have 100 years of history, and most of them hit the boom since 1990s. Korea is at least 30 years behind compared to the global IFM market. Single service providers in Korea provide all the services on behalf of Global IFM companies and drain the national wealth by means of management fees. This is one of the reasons why we need to begin to make change.

IFM service is perceived as a necessary concept in commercial facility and real estate service industry, like the administrative offices in the apartments of Korea. Among various high techniques, IFM model concentrates on the cost-saving pricing method through “Glide Path” with 3 to 5 contract periods. On the other hand, companies in Korea make contract only up to 1 or 2 years which causes a serious dysfunction that needs to be amended.

1 year of contract period means the service provider changes every year by transferring the same employees and succession of temporary positions. If the purpose of changing service provider is derived from unconditional cost saving desire of the client, the contract will be focused on cutting the labor costs only.

It also means that the clients will look for the service provider who can quote the lowest price of labor cost without considering their service quality or professionalism.

This kind of structure will only cause decrease in wage and instability of employment. In addition to that, it precludes long-term research on the IFM service or investment for improvement. It leads to the conclusion that IFM market in Korea is a “cheap manpower dispatching services”.

This is not a positive story for both landlord and service provider. The real function IFM extending to real estate, energy savings and EHS is a fairy tale of a far-away country.

The “OBM (Outcome Base Model)” which is a standardized concept in global IFM industry, is only based on the wage of our service model. ‘No Head-counting” is an effective system to secure service quality and focus on the delivered result.

However, a short-term contract limited to 1 year of period, precludes the opportunity for OBM application or a long-term investment for employees, introduction of technology for service improvement and advanced cost-saving research.

We must consider why minimum wage relies on the facility management services such as cleaning, security and other short-term services. Most of the facility management companies’ revenue comes from the irregular application of a break time and accrued severance pay through short-term employment. We should not turn away from this bitter reality anymore.

Even though Korea is 30 years behind in the global IFM industry, it is now the time to change the system. The first step could be replacing the wage based short-term contract to a long-term contract.

We should remember that clarifying the purpose of service delivery and thinking over the stable management of commercial workplace would be a shortcut to offset the lagged 30 years and contribute to society.

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