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KPIs reinforce poor payment experiences

M&E contractors are still reporting very poor experiences on payment, according to Bsria’s annual key performance indicator round-up.

The survey deals with satisfaction levels among both m&e contractors and their clients.

Only one in four m&e contractors is satisfied on the issue of payment, which is a slight improvement on the 21 per cent recorded the first time Bsria measured this in 2004.

No other comparable indicator in the survey showed levels of satisfaction less than 48 per cent.

Within payment, the issue of retentions scored especially badly and was worst of all KPIs, with only 8 per cent of m&e contractors satisfied (ie scoring 8 or more) and 23 per cent scoring just one out of ten.

Shouksmiths managing director John Miller told H&V News the figures were no surprise and if anything the situation on payment had got markedly worse this year.

“We’ve gone back 10 years in the past five or six months.” he said. “There are people who are struggling to pay and there are others who are deliberately withholding payment. We’re also seeing later settlement of accounts as firms hold on to money.”

In contrast, most KPIs indicate increased levels of satisfaction among m&e contractors and their customers, hinting that m&e contractors are building closer
relationships with customers.

Client satisfaction scores were high and have generally improved over the nine years of the survey.

For example, client satisfaction with design from m&e contractors has leapt from a paltry 38 per cent in 2001 to 64 per cent this year.

The survey also highlighted how m&e contractor involvement in design has increased over the time period, with 50 per cent of projects featuring design input from m&e
contractors in 2001, while this figure jumped to 79 per cent in 2009.

Client satisfaction with installation was also high (71 per cent) but had fallen slightly from a peak of 74 per cent in 2007.

Satisfaction with service from m&e contractors has steadily improved from 56 per cent in 2001 and has now hit 69 per cent.

Breaking this figure down further sheds some light on the value of building strong relationships with clients.

The research indicates that clients working with an m&e contractor for the first time were much less likely to be satisfied with the experience, with only 37 per cent scoring highly.

In comparison, where relationships contractor and client were developed, the satisfaction level rose markedly to 89 per cent.

Bsria added that the gap in satisfaction scores between these two criteria has widened over time.

“I would like to think there is a connection,” said Mr Miller. “If installers have the design capability it would be wise to get them involved. There is no doubt if trust exists between client and contractor, the client will get a great deal at the moment with prices as they are.

“However, it is a leap of faith for clients in the beginning.”

There is some concern over value for money, with a 2009 score of 59 per cent significantly down on a peak of 65 per cent in 2006.

In addition, quality of o&m manuals is still a sore point, with 48 per cent of clients satisfied, a figure not much changed from the 50 per cent satisfaction achieved in 2001.

Bsria also measures productivity and profitability as part of the survey. These generally show marked improvement since 2001, but small falls on figures obtained in recent years.

For example, the median value added per operative was a relatively measly £26,100 in 2001, but this figure peaked at £45,100 in 2004 (in 2001 values) before falling this year to £40,200 (in 2001 values).

Profitability was a tight 2.2 per cent median return on turnover in 2001. This climbed to a happier level of 4.3 per cent in 2004 and 2005 but the 2009 level fell slightly to 3.9 per cent.

Bsria has collected the KPI feedback specific to the m&e industry for nine years as part of the KPI Consortium in the UK.