Even more office jobs can be eliminated than we anticipated

Similarly to other fields of the Hungarian economy, property management and facility management are also hit hard by labour shortage, the solution of which might be wage increase and technological development. But what type of work can robots replace and when? How can costs be decreased with the integration of intelligent sensors? Among others, these were the questions experts invited to Portfolio’s FM & Office 2017 conference were trying to answer.

Building is not a noun but a verb

In the opening lecture, Pál Baross, Head of Development of the Central European University campus, FRICS, said: ‘building is not a noun but a verb’. According to the expert, as it was previously expected, asset and facility management is gaining a much bigger role as it is becoming more and more important with the increase of the staff.


In the case of lower executive levels, the knowledge base of asset and facility managers is virtually the same, however, some new aspects need to be learnt, but what we can certainly say is that their knowledge base is what we expect from a real estate market player. At the same time, at a higher level, it is quite different in terms of the company’s strategic and managerial challenges. There is also a difference in the management of real estates depending on who the building belongs, as the facility management requirements of buildings owned by investors and owners are not the same.

Professionals are helped in their work by several books, for example the guidebook titled Költségjéghegy published by RICS, in which the authors are exploring the footprint of the building.

Labour shortage is a problem here too

‘The greatest challenge of the sector is currently the lack of labour and expertise, however, customers’ demands for low costs, appearance of new players in the market, the extension of the lifespan of the equipment, the deteriorating human capital of the staff and the changing social expectations all pose serious problems for the sector’, said Csaba Szij, Deputy CEO of B+N Referencia Zrt. in his lecture on the future challenges of the facility management market. In his opinion, the reconciliation of the interests of customers and facility managers, setting clear service levels, the cooperation of industry participants as well as the creation of a protective legislative environment aimed at mitigating the grey economy pushing the prices down might provide a solution for these problems.


The topic of the facility management roundtable talk of the conference was also labour shortage. The on-the-spot survey found  over 90% of those present believe labour shortage is posing an increasing problem for the sector, however, half of them perceived the problem as manageable for the time being.

This labour shortage can be ascribed to several things. According to B+N Referencia Zrt. CEO Ferenc Kis-Szölgyémi, beside emigration and the boom in the number and areas of professionally managed buildings, the problem is caused by the communal work program that sucks away a significant portion of the workforce and the fact that a significant amount of the labour chooses the grey economy due to their personal legal issues.


Tibor Ruzsinszki, FM Branch Director of Strabag PFS FM said as much as 6% of the positions in companies covered by LEO are vacant. However, he is positive increased wages and technological improvements will solve this problem. The audience of the conference shared this opinion, according to the majority (54%) the wage increase would trigger a price hike, whereas a bigger minority (31%) believed it would cause the deterioration of the service level.

Technological development

Of course, technological development can decrease labour shortage, therefore, Ferenc Kis-Szölgyémi thinks technological developments aimed at replacing a part of physical work need to be implemented.


Róbert Fischer, Director of Commercial and Business Development  at Atalian Global Services Hungary believes this is not so easy. ‘The research and development costs of cleaning robots are extremely high at the moment.  With Hungarian wages, replacing physical workers would pay off in a timeframe of 30-40 years. We need to find the point up until technological expenses have added value’, he said.

Máriusz Várnai Managing Director of Diófa Ingatlankezelő Kft. believes technology, still dictated by the renter, will help facility managers in term of predictability. Sensors will be able to tell in advance when a part will need replacement, which will help decrease the size of the maintenance staff, and thus the costs as well.


‘In terms of technology, the recent real estate developments in Hungary are top of the notch in global comparison’, said Tibor Ruzsinszki. In his opinion, although green solutions can achieve significant energy saving, administrative and other requirements of certified buildings create new expenses: there are green elements the price of which will never return. In addition, the spread of green solutions is not hindered only by a lack of collective access to relevant experience, but the fact that renters still don’t know what the requirements are for certified buildings and therefore cannot always used them properly.

Challenges and possibilities of PM

István Rézsó, Head of Business Development at Cushman & Wakefield talked about the current issues of PM in his lecture. He specifically talked about the types of services present in the current Hungarian PM market, among them the entire PM service with elements of asset management, “one-stop shop” assignments, PM with certain elements of FM as well combined PM-FM-AM service assignments.

The advantage of comprehensive property management for PM companies and customers is that it means complete service, allowing customers to focus on their main field of expertise. The only problem is remote control, which might slow the process. However, in this line of service the possibility to create long-term partnerships can also be a major benefit.


During “one-stop shop” assignments property management shifts towards technical management. It raises questions like where the boundaries between different activities are. For PM companies, the possibility to increase the number of their services is an advantage, however, the fact that PM is “biting into” the market share of FM , and thus having a distorting effect on the market, can pose a danger. This type of service can be beneficial for customers because services come under one roof.

During the service called “PM with limited FM activities” technological processes might come in the foreground, however, unfortunately these assignments come at a lower fee content for PM companies. It is also typical to have free capacities left that cannot be utilized during the fulfilment of such assignments. Its advantage is that it provides an opportunity to increase market share, however, its danger is that, as a result, FM companies are stepping up as property managers too.


Lastly, he talked about the combined FM-PM-AM service. For PM this form is advantageous because it provides a great overview of the long-term strategy of the customer, however, the fields of responsibility need to be clarified. Patience is the greatest asset here, but it also has the danger of provider’s missing out on assignments. Its advantage for the customer is that they can access all resources already present within the PM companies, however, the question of the fields of responsibility is quite prominent here.