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3 ways to manage the rising costs in field service

October 11, 2022


Although inflation is down modestly from its peak earlier this year, rising costs continue to affect field service delivery. Everything costs more — from fuel to wages to equipment — and higher costs can eat into profit margins. Further, economic forecasters predict inflationary pressures will persist into 2023 and beyond. 

While you can’t control the macro factors driving inflation higher, you can lessen the pain by understanding the current economic landscape and taking specific actions to combat rising costs.

Let’s take a closer look at the most impactful cost pressures affecting the field service industry and what you can do to stem the tide.

1. Rethink travel by using workers closer to job sites

By its nature, field service involves traveling to client sites, so rising travel costs can dramatically affect your overall cost structure. According to recent Consumer Price Index data, hotel prices are up 7%, airfares are up 16%, and rental cars are up 48%. And while gas prices have declined, prices are still 81 cents per gallon more than last year.

What’s more, “windshield time,” or the time it takes to get to and from a work site, isn’t usually billed to the client when using full-time employees. For example, if a full-time employee spends 30 minutes each way to a job site to perform a two-hour project, you’ll pay for three hours of labor. However, with a contractor, you will pay for just two hours because their travel time is typically included in the hourly rate.  

Route optimization can help reduce travel time, but sourcing labor closer to the job site can be even more impactful. By doing so, you can reduce or even eliminate travel expenses. With contract technicians across the country, an on-demand labor platform can be instrumental in reducing travel costs. 

2. Reduce labor costs with on-demand workers

Average wages for U.S. workers are up 5.2% annually, according to the Bureau of Labor Statistics. Due to a persistent shortage of field service technicians, technical resource costs in the field service space have risen even more sharply. 

However, on-demand workers in field service typically cost *24 percent less than full-time employees. Plus, you pay employees the same amount whether they’re working or not. When you use on-demand labor, you only pay for the time your resources are actually working.

On-demand labor can’t replace your full-time workforce, but it can supplement it and help you allocate work in a streamlined, cost-efficient way. Using employees for higher-value or complex tasks and on-demand workers for routine tasks, projects, and geographically dispersed work can help lessen the impact of rising labor costs

3. Take advantage of planned procurement

Equipment costs are up 18% annually, which impacts all types of work, including cabling, printer, CCTV/alarms, pro A/V, digital signage, and more. While you can’t control direct equipment, parts and materials costs, here are some ways to keep costs in check.

Consider using a planned procurement process through a distributor rather than having technicians source parts and materials themselves. Because distributors order in bulk, you’ll benefit from lower pricing due to economies of scale. What’s more, a distributor can assist with kitting and shipping parts directly to a work site, eliminating the cost of storing parts in a warehouse or managing parts inventory.

Rising travel, labor, and equipment costs will continue to challenge the field service industry, but there are tangible ways to protect your margins despite these pressures. Contact our team for more tips on how to mitigate rising costs in your business.


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