By Charles Carpenter
Published in the March 2013 issue of
Today’s Facility Manager
acility managers (fms) can easily find themselves in the on-again, off-again debate on offshore facilities. Employers are always seeking lower costs, and looking overseas is an option. India was the original hot spot. Now Egypt, South Africa, the Czech Republic, and the Philippines seem to be where companies are looking for facilities. There are a lot of things to get used to with overseas operations… the time difference, foreign languages and the meanings applied to English words, different voltages, and even McDonald’s serving fried chicken with a side of spaghetti.
In our line of work, one thing fms need to know if delving into management across borders is the metric system. Since we are talking facilities, a square meter is probably the most important unit of measurement. When dealing with square meters, a rule of 10 comes in handy, as there are about 10.74 square feet in one square meter. So a 550 square meter space is roughly 5,500 to 6,000 square feet. (While there is probably an app for that, there is also a need to keep up with the conversation when talking with foreign counterparts.)
Using the Philippines as an example, specifically Metro Manila, let’s consider some things inherent to operating a facility in another nation. Whether it’s reruns of The Andy Griffith Show
or a higher education classroom, the Philippines (with a median age of 23) is full of English speakers. Nowhere does the concentration seem higher than Metro Manila where the population is about 12 million. It is a demographic of young, eager workers who like to spend money on an American lifestyle.
The influence has evolved Manila into a city of shopping malls and traffic jams. Mall design often incorporates office space, as it appeals to both spend happy workers and employers who can find hundreds of applicants without advertising.
The Philippine government is quick to offer incentives to bring new jobs to this burgeoning nation. Plenty of firms exist to set up foreign companies in the Philippines and negotiate the red tape. While government credits are available for many of the capital costs, companies need to be wary of who can claim these credits; meaning a landlord or project management firm might be the eligible party, if they offered turnkey service.
Construction is booming in the Philippines. Buildings that would easily be reused in the United States are demolished and replaced. Why turn a facility that is less than 20 years old into rubble? For starters, real estate prices are skyrocketing, which makes for a favorable return on investment on a structure that may be just 20% larger. With a minimum wage that hovers around $10 a day, the construction labor is negligible. Energy prices are soaring as well so an energy efficient facility is easier to lease, even with rental rates that rival those in the United States. That expensive energy is also unreliable, so new facilities can incorporate N+1 generators to support 24/7 operations.
Meanwhile, low wages make it easy to see why companies see the Philippines as an inexpensive alternative. Call centers especially favor this location, with the population’s Americanized accent and culture comparable to India. It doesn’t hurt that many do not mind working American business hours on graveyard shifts, even if it is just to avoid the traffic.
When nature calls, Philippine workers go to the “comfort room.” They watch their step when entering because there should be a lip or step at the entrance. Local code specifies that restroom floors be at a different height than adjacent rooms to reduce water leaks. An fm might wonder how an employee in a wheelchair would enter, but since there is no disability legislation, fms there do not have to take that into consideration.
More shocking may be that medical exams are often part of a job application process. Performing the exams can be quick, since larger companies are required to provide employees a medical clinic within their facilities. Furthermore, companies do not have to hire anyone based on their medical exam or disability.
Nap rooms are a prevalent perk in many Philippine facilities, with fms quickly learning to offer “his and hers.” Bunks might be stacked three or four high, given all the able-bodied employees. You should find two doors to the nap room, as code requires any room that holds nine or more people have two doors (spacing of the doors seems less of a concern).
Running a facility in the Philippines is not without its challenges. Random holidays can pop up at anytime. Tensions with China over the Scarborough Shoal can cause work stoppages from crippling protests. Typhoons result in devastating floods. No one reports to work during a Manny Pacquiao fight. It is enough to make finding a 308V gen set or tracking the currency exchange to calculate rent the least of your worries.
While citing McDonald’s as an example in this column, Carpenter does not own any stock or work for Mickey D’s (though he was a member of the birthday club in the 1970s). He welcomes your questions and comments.