How to Take Cost Out of Property Services — Cleaning, M&E, Plumbing, Vertical Transport & Waste (Universities, Hospitals, Hospitality, Schools, Prisons)
There’s a familiar meeting in many organisations: the facilities manager, the procurement lead and the CFO sit down to discuss next year’s budgets. The line for property-services looks immovable. “That’s just the cost of doing business,” someone says. But it isn’t. Property services — the combination of cleaning, mechanical, electrical, plumbing, vertical transport, waste and other critical facilities activities — are often a mix of poorly scoped services, legacy contracts, duplicated responsibilities and soft productivity that quietly leaks cash month after month.
Reducing that cost is both art and science. It’s about spending time up-front to understand the true scope, the operating model and the drivers of cost — then aligning procurement, operations and contract management so savings stick. This article is a practical blueprint for Australian and New Zealand facilities, procurement and finance leaders working in universities, hospitals, hospitality, schools and correctional facilities. It covers the levers you can pull, the pitfalls to avoid, the governance you’ll need, and the role of technology and sustainability. It also explains, plainly, how Trace Consultants can help you turn ideas into a deliverable program.
Why property services cost reduction matters
Property services are a recurring, high-touch portion of the facilities budget. The reasons they offer rapid savings opportunities are simple:
- Labour intensity. Labour is usually the largest cost component. Small improvements in productivity, rostering or travel time translate to significant dollar savings.
- Hidden scope & legacy assumptions. Old contracts often include vague scope descriptions, generous supervisor ratios or historic allowances that no longer reflect current needs.
- Fragmentation of responsibility. When responsibilities sit across operations, procurement and estates, duplication or gaps are common.
- Lack of data & performance management. Without good metrics and verification, suppliers tend toward risk-averse behaviour, and opportunities for efficiency go unidentified.
- Complex stakeholder needs. Hospitals and prisons have demanding compliance and safety requirements; universities and hotels are service-led. Each needs a tailored approach.
- Opportunity to link sustainability & productivity. Less waste, better dosing systems, route optimisation and lower water use are both environmentally sensible and cost saving.
When done well, cost reduction delivers more than a smaller line item — it improves service predictability, reduces risk and frees funds for higher-value investments.
The six levers to take cost out of property services
Successful programmes typically combine several levers. Think of them as the toolkit you’ll use:
- Scope clarity & rationalisation
- Commercial model & market engagement
- Operating model & workforce design
- Productivity, technology & digital verification
- Procurement, contracting & governance
- Sustainability & waste minimisation
We’ll walk through each in turn with practical actions and sector considerations.
1. Scope clarity & rationalisation
Most savings programmes start with scope. If you don’t know what you’re buying, you can’t buy it efficiently.
Actions to take:
- Inventory your sites and tasks. Build a central site data pack: floor plates, room types, opening hours, access constraints, and the periodic work that happens (e.g. deep cleans, lift servicing, emergency call-outs). For multi-site organisations (universities, hospitals) this is the foundation for consistent scoping.
- Create standardised service specifications. Move from “hours per week” to outcome-based specifications: audit pass rates, frequency by room type, accepted cleaning methods, allowed chemicals and required PPE. Outcome specs reduce ambiguity and price gaming.
- Rationalise non-core or ad-hoc activities. Identify tasks that don’t need contractor input (e.g. in-team minor repairs, small-value consumables) and consider bringing them in-house or routing through a central helpdesk.
- Tier services by criticality. Not all areas require the same standard: clinical theatres demand different standards to general admin areas. A tiered approach focuses resources where risk and service outcomes are highest.
- Standardise schedules. For institutions with multiple buildings, standard schedules remove bespoke arrangements that add cost and complicate rostering.
Sector note: Hospitals and prisons need higher-control scopes (infection control, security), while hospitality and universities value front-of-house presentation. Scope rationalisation must respect these differences; the point is to remove unnecessary variation, not service.
2. Commercial model & market engagement
How you pay shapes the supplier’s behaviour. Moving beyond simple hourly rates opens opportunities for productivity and innovation.
Commercial models to consider:
- Activity-based pricing: Price by task or area (e.g. per washroom clean, per m² for general areas). This clarifies pricing comparability and links payment to work done.
- Guaranteed FTE (staffing) model: A supplier guarantees rostered hours or FTEs. Useful for predictable demand but requires robust productivity baselines.
- Output/outcome contracts: Payment linked to KPIs and audit results; incentivises performance but needs solid measurement.
- Gainshare or shared savings: Agree a baseline and share improvements — aligns incentives for continuous improvement.
- Hybrid models: Combine guaranteed FTE for core services with activity rates for variable or specialist tasks.
Market engagement tips:
- Run an RFI first. Use a market sounding to understand capacity, innovation and price drivers. The cleaning and facilities market is competitive; RFIs also tell you which operators can deliver multi-site or specialised services.
- Transparent pricing templates. Force bidders to submit comparable pricing by using a detailed pricing schedule and activity matrix.
- Benchmarking. Use defensible benchmarks for labour rates, supervision ratios and productivity standards for each sector and geography.
- Pre-qualification. Screening for safety, insurance, financial capacity, and modern slavery compliance reduces tender risk.
Sector note: For hospitals, ensure bidders demonstrate clinical cleaning capability and infection control training. For prisons, security clearance and experience in custodial environments are mandatory.
3. Operating model & workforce design
Labour is the principal cost. Designing the workforce and rostering to minimise non-productive time is a large lever.
Workforce optimisation actions:
- Activity time studies. Understand real task times for cleaning, inspections, plant maintenance and waste routes. Avoid relying on rule-of-thumb.
- Rostering & travel minimisation. Design rosters that reduce travel time between buildings, cluster tasks spatially, and align shifts with demand peaks (e.g. room turn-around in hospitality).
- Supervision ratio review. Challenge historical supervisor levels. Right-sized supervision reduces overhead yet must preserve safety and quality.
- Multi-skilling & key-person risk. Train staff to perform multiple tasks (e.g. minor M&E fixes), reducing handoffs and wait times. For regulated tasks (mechanical, electrical) keep certified specialists but minimise downtime through task bundling.
- Labour model review: Consider mix of permanent, part-time, casual and contingent labour. Each sector has different constraints — hospitals need higher certainty; hospitality values flexibility.
- In-house vs outsourced design. For some specialised services (vertical transport maintenance, complex M&E), retain strategic in-house capability or a managed supplier; for commodity tasks, a competitive market may be best.
Sector note: In schools, seasonal demand and after-hours access shape rostering. Universities with student labour pools can optimise term-time rosters. However, student labour requires strong governance and supervision.
4. Productivity, technology & digital verification
Productivity gains are sustainable when backed by measurement and digital tools.
Practical technology & productivity levers:
- Digital cleaning verification. QR codes, photo evidence, or checklists on mobile apps increase accountability and reduce disputes. These systems also create auditable records for compliance.
- Workforce management systems. Basic rostering tools and timekeeping reduce payroll leakage and help enforce agreed shifts. Advanced systems optimise travel and skill matching.
- Route optimisation for waste & maintenance. Route planning reduces transport time and fuel; for waste collection, compaction and bin routing is a quick win.
- Predictive maintenance for M&E. Move from reactive repairs to condition-based maintenance to reduce downtime and emergency call-outs for plant and vertical transport.
- Low-code and smart spreadsheets. Pragmatic tools like Smart Excel or Power Platform apps (which Trace Consultants has implemented with clients) can provide immediate visibility and automation without long IT lead times.
- Analytics & dashboards. Pull together hours, audit scores, call-outs and costs into a simple dashboard the facilities and finance teams use to spot trends.
Implementation tip: Start small — pilot digital verification in a handful of buildings before scaling. That proves process change and cultural acceptance.
5. Procurement, contracting & governance
A good contract and an organised governance framework lock in savings.
Contract design essentials:
- Clear scope & exclusions. Avoid ambiguity about responsibilities for minor works, consumables, and site fixtures.
- Performance KPIs & payment linkage. Include KPIs that matter (audit pass rate, response time for emergency call-outs, lift downtime) with balanced incentives and reasonable remedies.
- Transitional arrangements. Mobilisation and demobilisation clauses, training requirements and data migration specifics. Don’t leave mobilisation to goodwill.
- Modern slavery & compliance clauses. Require supplier transparency across labour and subcontractors. For public institutions, this is often a mandatory check.
- Variation management. Define how extra works or scope changes are priced to avoid cost creep.
- Termination & contingency. Include rights and practical steps for supplier failure, including access to key staff records for operational continuity.
Governance model:
- Single point of contract management. A named contract manager coordinates supplier performance, invoicing and governance.
- Monthly performance reviews. Regular scorecard reviews with operations, procurement and finance; escalate for under-performance.
- Quarterly strategic reviews. Focus on continuous improvement, innovation proposals and safety incidents.
- Annual market benchmarking. Revalidate pricing against market movement before price review windows.
6. Sustainability & waste minimisation
Sustainability is increasingly material — and delivers cost benefits.
Sustainability actions that reduce costs:
- Chemical dosing & microfibre systems. Dosing reduces chemical waste and cost; microfibre improves cleaning performance and reduces product use.
- Water efficiency & HVAC controls. Investment in water saving and HVAC optimisation reduces energy and water bills.
- Waste segregation and recovery. Improve recycling, organics removal and reduce general waste to decrease landfill costs and potentially generate revenue.
- Fleet electrification & route optimisation. For organisations with in-house fleets, electrifying vehicles and optimising routes reduce fuel cost and emissions.
- Product procurement & circularity. Moving to re-usable consumables, longer-life assets and supplier take-back programs reduces replacement spend.
Sector note: Hospitals have complex waste streams with regulatory disposal costs — careful segregation delivers both compliance and cost benefit.
Mobilisation & change management — the place where savings are won or lost
Many programs hit difficulties in mobilisation. Treat transition as a project.
Mobilisation essentials:
- Detailed mobilisation plan. Include timelines, recruitment/training, equipment delivery, IT access, and site readiness gates.
- Baseline audits. Capture condition and current performance; these baselines prevent disputes.
- Stakeholder communications. Inform internal teams, unions (where relevant), tenants, clinicians or campus users about changes.
- Trial periods & readiness gates. Pilot approach for 4–8 weeks before full handover; move to full payment only when acceptance criteria are met.
- Risk register & contingency. Identify and mitigate risks (supply chain, mobilisation slippage, industrial relations).
People factor: The supplier’s workforce is your operational asset. Investing in their training, wellbeing and rostering pays dividends in productivity and quality.
KPIs and measurement — what to track
A short, focused KPI set is better than a long wish list.
Suggested KPIs:
- Cost KPIs: Cost per m², cost per bed/room, cost per lift service incident.
- Service KPIs: Audit pass rate, number of corrective actions, average response time for urgent call-outs.
- Productivity KPIs: Cleaned m² per labour hour, first-time fix rate for M&E, average time per service call.
- Risk & compliance: Number of WHS incidents, contractor audits passed, modern slavery screening coverage.
- Sustainability KPIs: Waste diversion rate, water usage per m², Scope 1/2 energy per site.
KPIs must be reconciled to finance for savings to be visible and recognised in budgets.
Common pitfalls and how to avoid them
Avoid these frequent mistakes:
- Buying by price alone. The cheapest hourly rate often hides lower productivity and higher supervision or rework. Compare bids on activity and outcomes.
- Under-specifying the scope. Ambiguity leads to disputes and cost creep. Invest time to specify properly.
- Ignoring mobilisation. Many savings are lost during a poorly executed cutover. Treat mobilisation as a project.
- Weak governance. No one owns the scorecard or pays attention to drift. Create clear contract management routines.
- Neglecting labour and safety obligations. Non-compliant suppliers are a reputational and legal risk. Ensure award compliance and WHS oversight.
- Over-reliance on one supplier. Risk concentration is real — prefer panels or option for multiple suppliers across regions where practical.
How Trace Consultants can help
Trace Consultants brings practical, multi-disciplinary capability to help organisations remove cost from property services while preserving or improving service and compliance. We work with universities, hospitals, hospitality groups, schools and correctional facilities across Australia and New Zealand. Our services are focused on delivery and include:
- Scope definition and activity-based modelling: We convert building inventories and service requirements into robust activity models so you can procure like-for-like and compare supplier bids on a level basis.
- Market strategy & procurement design: We design RFI/RFT and procurement strategies (single supplier, regional panels, managed services) and run market engagement to attract capable bidders.
- Commercial drafting & negotiations: We write clear scopes, pricing schedules and contract clauses that balance commercial outcomes, performance incentives and risk protections.
- Mobilisation & transition management: We treat mobilisation as a project — recruitment, training, baseline audits and readiness gates — ensuring suppliers meet day-one readiness.
- Workforce & rostering optimisation: Practical review and redesign of rosters, supervision ratios and travel flows to improve productivity while maintaining compliance.
- Digital enablement: Rapid deployment of pragmatic tools — Smart Excel or Power Platform apps, cleaning verification and dashboards — to provide immediate control and visibility. This approach accelerates results without heavy upfront IT projects.
- Risk, compliance and modern slavery reviews: We ensure award compliance modelling, WHS risk assessment and supplier due diligence are embedded so savings are sustainable and defensible.
- Sustainability planning & waste optimisation: We identify interventions that reduce cost and environmental impact — from dosing systems to waste route optimisation.
- Continuous improvement frameworks: We establish governance, scorecards and joint improvement programs with suppliers to capture ongoing productivity gains.
We focus on practical outcomes: a defensible plan, a ready market process, a controlled mobilisation, and measurable savings that finance can recognise.
Quick checklist — 20 practical actions to get started this quarter
- Build a single, auditable site and task inventory.
- Define tiered service specifications for all building types.
- Run time-and-motion studies on core activities.
- Pilot digital cleaning verification in three buildings.
- Run an RFI to understand market capability and innovation.
- Create an activity-based pricing template for procurement.
- Review supervisor ratios and test a right-sizing model.
- Rework rosters to cluster tasks and reduce travel time.
- Identify quick wins in waste diversion and dosing systems.
- Design mobilisation readiness gates and acceptance tests.
- Implement a simple KPI dashboard (cost, audit, response time).
- Conduct supplier modern slavery due diligence for top spend.
- Test predictive maintenance for a key piece of plant (lift or chiller).
- Negotiate gainshare mechanisms in new contracts.
- Standardise consumable specifications and consolidate procurement.
- Embed WHS audits into monthly performance reviews.
- Map variations and create transparent pricing for extras.
- Start an employee training programme for multi-skilling.
- Pilot a small in-house team for a non-critical scope to compare outcomes.
- Set up monthly governance with finance to track actualised savings.
Taking cost out of property services is not about cutting corners. It’s a disciplined programme of scope rationalisation, smarter commercial levers, better workforce design, pragmatic technology and strong governance. For complex environments such as hospitals, prisons or universities, the challenge is to reduce cost while protecting safety, compliance and service outcomes.
Trace Consultants helps organisations bridge the gap between ambition and delivery. We bring activity-based costing, market knowledge, procurement rigour and hands-on mobilisation experience — so your savings are real, repeatable and defensible. If you’d like to take the next step, a short diagnostic that maps your top spend categories and identifies three tangible savings initiatives is a practical and low-risk place to start.
Ready to turn property services from a tired cost line into a managed, optimising function? Contact Trace Consultants to discuss a pragmatic next step for your organisation.
