Benchmarking is Part Science and Part Art Form

by | Aug 14, 2018 | Empowerment, Leadership | 0 comments

Operations and maintenance benchmarking can be an arduous and complicated exercise. It’s part science and part art form.

Here are answers to frequently asked questions (FAQs) I’ve encountered when working with facility managers through these analyses.

How should I calculate my utility rate when I have multiple utility accounts with varying rates?

For each utility type (e.g. electricity, natural gas, etc.), it’s acceptable to calculate a blended rate by dividing your total annual utility cost by your total annual utility consumption.

All the utility categories request an annual total utility consumption calculation. Should I include annual electricity demand, too?

No, electricity demand is not calculated as an annual total but rather an average over a 12-month period. 

How should I address my full-time equivalent (FTE) count when my FTEs don’t fall within just one of the trades in the benchmarking analysis tool?

Divide each FTE appropriately among the trades provided in the analysis tool (e.g. 0.5 to General Maintenance and 0.5 to Painter/Carpenter). Alternatively, determine the trade each FTE spends most of his time and categorize him by that trade.

How granular should I make my FTE count?

Go with what makes the most sense for you and your organization, but I don’t recommend dividing up an FTE into more than 4 functions (0.25 FTE). More granular than this, and it’s difficult to track each person and his/her responsibilities along with corresponding wage information.

How would you address a facility supervisor’s salary who spends 25% of his/her time on leadership and 75% of his/her time on general maintenance?

There are several ways to consider this split in time and in wage. Whichever method you choose, it’s critical that you’re consistent with how you weight that individual’s time and hourly rate.

Scenario: Two FTEs work in a hospital: a full-time maintenance technician that earns $20/hour and a supervisor that splits his time between maintenance (75%) and leadership (25%) and earns $30/hour.

Option One: weighted premium on the leadership portion of the FTE

  • The supervisor earned 75% of his salary (1560 hrs) at $20/hour for maintenance = $31,200
  • The supervisor earned 25% of his salary (520 hrs) at $60/hour for leadership = $31,200
  • Reasoning: The supervisor’s leadership responsibilities were at a higher wage; however his maintenance work is no different than the full-time technician.  

Option Two: straight weighted average calculation

  • Calculate a weighted average of the 2 rates, which yields $22.50/hour to maintenance technician and $7.50/hour for leadership.
  • Reasoning: The benchmarking tool is comparing FTE count (total and by trade) and total labor spend, not individual wage rates. For every hour the supervisor worked, $7.50 of the $30 paid were for leadership responsibilities.

Option Three: adjusted hourly rate calculation

This is the method that I personally recommend.

  • 2080 hrs (full-time maintenance technician) + 1560 hrs (75% supervisor for maintenance duties) = 3640 hours
  • $41,600 (full-time technician: 2080 hours x $20/hour) + $46,800 (75% supervisor: 1560 hours x $30/hour) = $88,400
  • $88,400/3640 hours = $24.29/hour – calculated adjusted hourly rate for maintenance technician

Regardless of what approach you decide, just be consistent in your methodology – how you divide up FTE trades should also be reflected in the corresponding wages.

How should I address my parking decks and parking lots?

Most benchmarking analysis tools, like the one developed by the American Society for Healthcare Engineering (ASHE), offers an input field for both parking lots and parking decks. Both items are accounted for in number of parking spaces.

How should I account for my roof area?

Most benchmarking analysis tools (like ASHE’s tool) offers a separate input field for roof area and requests this information in square feet. If this is the case, do not include the roof area in the total floor area calculation.

What if budgets are split between departments?

How you’re using the benchmarking data will determine whether to include the whole budget or only your department’s portion.

If you are only benchmarking your department, then use a pro rata calculation to determine how much of the total budget is assigned to you.

In some cases, this calculation might entail splitting the total budget by line item rather than calculating a portion of the sum.

If you’re using the ASHE benchmarking analysis tool, adjust the percent of inhouse work provided to reflect how much of that service is performed by your department. Consequently, the total service contract expenses should increase for the split services.

Otherwise, include all the services in your budget and account for the percent of work provided by inhouse personnel that reflects both departments’ work.

If my FTEs provide maintenance for remote locations, should I include the floor area of those locations?

Yes – include the floor area of the remote locations (in square feet) where your FTEs provide services. Doing so will yield a more accurate calculation of recommended number of FTEs (and SF/FTE calculation). 

If the analysis tool you’re using offers a separate input field for travel time to these remote sites, include this calculation as well.

About me: I have been responsible for the development and management of over $370 million in specialized energy solutions and infrastructure projects. Since starting my career in healthcare engineering consulting, I have provided healthcare facility managers with the tools and resources they need to make data-driven, well-informed decisions that improve their energy efficiency, building performance, and facility operations. The most recent of these solutions is a healthcare facilities operation and maintenance training program, the first of its kind in the industry. 

Let’s connect: If you have a success story in facilities management, I’d love to hear about it and learn how you made it happen. 

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