In less than 10 years, Tariq Chauhan has turned EFS Facilities Services from a company working in just four countries to one that will be operating in 30 territories by the end of this year. From Morocco to India, Turkey to South Africa, EFS is fast becoming a facilities management company of choice for many multinationals.
This year the company took its contract backlog beyond the $1bn mark for the first time. Chauhan has created a strategy around EFS that is primarily built on three things: deliverance, prudence, and sustainability. “In any service industry, you’ve got to continuously deliver on your contracts,” he says. “The enterprise has to be prudent to make money. And eventually when these two combine you build a sustainable enterprise. We took over a company of $75 – $80mn in 2009 to $1bn in contract backlog and about $255mn in revenue. This has been built over a period of time, not just by me alone but with the empowerment of the shareholders and a fine team around me and the finest clients.”
EFS owes a large part of its success to its stellar roster of blue chip clients, around 70% of which are Global Fortune 500 companies, which helps EFS to collect its money within 60-70 days. Operating across three continents with complete service delivery, EFS is the only outfit that has boots on the ground across such a wide geography,
Chauhan says. It has maintained 98% contract retention and is growing at 20% compound annual growth. EFS is building a truly integrated FM enterprise, something which Chauhan says was badly needed by many global supply chain partners. Some of its clients include banking giants such as HSBC, Citibank, Credit Suisse and Barclays. It also works with GE, Boeing, Google, AIG, Allan & Overy, Proctor and Gamble and Pfizer. The business has expanded rapidly, both vertically and horizontally, adding new businesses and new segments. For example, it now does airports such as Salalah in Oman.
“EFS is one of the only players with a true pedigree combining global knowledge, local experience, and regional presence,” Chauhan says. “It’s uncommon to have all of these. The business is about 17,000 people now. That’s significant.”
The diversification drive came about because EFS wanted to follow the footprint of global multinationals that were looking for a supply chain. “They were looking for a single vendor, an integrated services company with a standardized approach and a one touch model,” Chauhan says. “Compliance was a major challenge for most of these multinationals. To build that credibility of compliance – in terms of HR, systems and processes, country compliance, governance levels, zero tolerance on HSE and so on – across geographies was very difficult to find in the supply chain and that’s what EFS became.”
Even by its own standards EFS has seen a very strong first half of the year. In 2016, the firm saw 20% growth in sales but this year that has risen closer to 35%. Chauhan puts the success down to the six months of bidding and engagement to win new contracts. The facilities management business has been growing steadily at 8 – 10% on a global basis but this part of the world has been growing much faster primarily because of new buildings, Chauhan says.
However, there is also a portion of growth that has come from companies using FM as a tool for cost efficiency. “The industry will continue to grow for the next 10 – 15 years, I don’t see a challenge,” he says. “Even in an environment with negative growth people look for cost cutting measures so they realize FM is the right tool for that. So, this business is not directly dependent on economic growth. Outsourcing has traditionally been a tool for cost reduction and improved efficiencies. For example, technology plays an important role, moving from man hours to machine hours in cleaning there is a dramatic change in cost. Elements like these bring cost efficiency.”
EFS has launched a business process called FM Pro for clients looking for fully integrated services under a single interface. That considerably changes three things that improve efficiency: It reduces downtime; reduces paperwork; and provides live information. Another area where efficiencies have been made has been through automation. An average ride on floor cleaning machine can cover 14,000 sq. ft. in an hour whereas an average person can do just 1,000 sq. ft. And there are cleaning machines now that use steam, saving on a lot of water.
Other efficiency gains have been made through the use of equipment, such as exchanging a manual screwdriver for an electric one or using lasers instead of tape to measure the size of an area. EFS aims to remain a preferred choice for those looking to expand within the Middle East and South Asia and Africa. The second pillar of its strategy moving forward is to strengthen the supply chain through acquiring some services that it is currently outsourcing, such as engineering services.
Thirdly, EFS plans to strengthen its workforce and their skillsets and to retain and develop talent. This last topic is one that is clearly dear to Chauhan’s heart, and one that he talks about with great passion. EFS has introduced a financial planning and savings scheme for its blue-collar workers, which make up a huge portion of its workforce.
“People organization is a very critical priority for us,” says Chauhan. “If you have a large blue-collar work force, how do you build an organization with sustainable human values? We help our workers with financial, health and psychological counselling. I also have a happiness manager in the organization.”
EFS has a strong track record of progression. Almost 280 people in the past three years have moved from being cleaners to higher levels within the company and there has been a 300% jump in their compensation as a result. “It’s important to engage these workers,” Chauhan adds. “Every year we organize a carnival for all our employees. Everyone sits at the same table and eats the same food. I go at least four times a year to my camps to have breakfast with the labourers. This is one of the most important issues for me.”