12 Biggest Facilities Management Challenges and Solutions in 2025

Successfully steering facilities management smoothly is anything but straightforward. We discuss the key facility management challenges and opportunities that exist for facility managers.

The cost of labor, material and supplies, energy, and government taxes, consume a substantial portion of spending in facilities. Utility costs are on the rise, and facilities need to consistently keep a watch on their operating costs, as going unmonitored they start eating into profits, thereby drastically affecting the bottom line.

This post covers challenges faced by facilities managers that end up impacting their budget, costs, and, in some cases, margins, which down the line make it essential to adopt facility management best practices to minimize risks and drive operational efficiency. These are:

1. Poor Productivity
2. Lack of Transparency
3. Inefficiencies – In Processes and People
4. Inability To Identify Process Waste
5. Hidden Costs
6. Lack of Analytics Vision
7. Not learning from poor KPI scores
8. Failure to Identify Pilferages
9. Inability to Hire the Right Talent
10. Overwhelming Technology and Change
11. Managing Lease
12. Embracing Sustainability

Alongside, we also offer the solution for each challenge, so that you manage your facilities the right way. Let’s dive in.

1. Poor Productivity and Inability to Identify the Root Causes

Monitoring a single or select few parameters do not provide a comprehensive picture of facilities performance. In order to convert pain points into opportunities, facility managers must invest quality efforts to identify problem causes. A well-managed facility thus requires a holistic insight into the performance of the entire system.

Concerning employees, machines, processes, and infrastructure, there can be scores of facilities management issues that can hamper productivity. The productivity is derailed to an extent that reversing to normalcy becomes a herculean task. In the absence of a monitoring system, one cannot identify root causes, and the problem continues to escalate. The slowdowns ultimately cause a ripple effect throughout the value chain and bring the business under its grip.

The Solution: To address poor productivity and hidden causes, facility managers should implement an integrated facility management system that monitors and tracks all key operations in real-time. Using data from employees, equipment, and processes, managers will be able to spot inefficiencies quickly. Further, use diagnostic tools and set performance benchmarks to pinpoint the exact cause of slowdowns. Once causes are identified, managers should act swiftly, whether by adjusting workflows, repairing equipment, or optimizing schedules.

2. Lack of Transparency Keeps Hurting

Transparency is linked to performance. It helps control costs, maintain service quality, and meet compliance. Here, we understand how the lack of transparency at two important levels can take a toll on business productivity and thereby on the bottom line.

People and Process

Non-transparency creates a scope for the facility staff to manipulate crucial people performance metrics such as job completion status, service efficiency, and average response time, which in the long run affects customer sentiments and leads to poor customer service. Lack of visibility creates a trail of sub-standard operations that transfer from people to processes which distorts the entire operation.

As per MIT Sloan’s research, customers are willing to pay 2%-10% extra to companies that offer greater visibility into their operations. Reversely, when people and processes lack transparency, customers grow hesitant of maintaining relations with the company.

Vendors

Fragmented and inconsistent processes are a direct result of not observing transparency. In a similar vein, non-transparency between subcontractors or suppliers and the company proves detrimental to business prospects. Harvard Business Review Analytic Services for Basware has unearthed that nearly 60% of business leaders expressed that lack of transparency invites significant risks for the company.

The Solution: Set clear expectations and build a robust framework for tracking performance across people and processes. Use automated tracking tools and centralized dashboards to identify inefficiencies early and take corrective actions. On the vendor front, track requisite vendor performance KPIs and pay attention to the following are the areas:

• Safety procedures: Conduct regular, surprise audits and require vendors to provide real-time safety reports to track compliance.
• Raw material sourcing processes: Demand clear, traceable sourcing documentation and verify through independent checks.
• Service/product quality: Set clear performance metrics and schedule regular quality reviews to hold vendors accountable.
• Labor practices: Perform periodic audits to ensure fair working conditions and maintain open communication with vendors about labor standards.
• Environmental sustainability: Require monthly sustainability reports and verify compliance through third-party assessments.

3. Inefficiencies – In Processes and People

Lack of transparency does adversely impact performance. However, that’s just a small part of the problem, as there are myriad factors that facilities have to consider when it comes to efficiency.

As much as 75% of all failures in critical facilities are caused by human errors, and turning a blind eye can cascade the faults into an unmanageable operational issue.

As mentioned earlier, real-time visibility into process and manpower performance is important, or else inefficiencies start creeping in and it becomes difficult to optimize outcomes.

The Solution: To sustain the efficiency of your resources take the following steps:

• Establish performance metrics and monitor them continuously.
• Use facility software to monitor asset performance – asset utilization (overutilization/underutilization), asset turnover, and asset failure.
• Keep a track of random and routine incidents.
• Implement a structured maintenance plan to reduce reactive repairs and minimize downtime.
• Remain unaware of maintenance spend and lost operations times
• Monitor employee metrics like accident rates, absence rates, and employee turnover rates.

4. Inability To Identify Process Waste

How to identify waste remains a mind-boggling question facing many facilities, as the possibilities are limitless. A mere intention to reduce waste produces no consequence if the business doesn’t understand how to recognize waste and eliminate it. Surprisingly, this is a facility industry challenge not many leaders focus on.

As per Lean practices, the common process wastes in facilities include unnecessary motions, unneeded inventory, slow material movement, and poor process designs.

Lacking capabilities to build Lean practices and conducting waste analysis are two key steps that prevent facilities from eliminating process waste. Moreover, the one-fits-all approach doesn’t work with process waste as each waste type will require a bespoke approach to address it.

The Solution: To tackle process waste, begin by implementing a detailed waste audit. Break down each process step to track time, motion, and material flow. Use tools like value stream mapping to visually identify inefficiencies. Once the waste is identified, prioritize it based on impact and tackle each type separately with focused solutions. For example, reduce unnecessary motion by reorganizing workstations or eliminate excess inventory through just-in-time strategies. Regular audits and adjustments will help sustain long-term reductions in waste.

5. Hidden Costs Eat into Profits

When periodically analyzing costs, you must take a closer look at the following elements:

• Emergency Repairs: Costs consumed by unplanned maintenance activities.
• Asset Life: Assets function for a shorter than expected span.
• Equipment Efficiency: Higher than expected energy consumption by the equipment.
• Safety: Following poor safety practices result in incurring extra costs for incident and hazard management.
• Vendor Management: You fail to quantify the ROI against the fees you are paying to vendors.
• Hourly Rates: You fail to take a closer look at per-hour trip charges, material and labor costs, and freight.
• Compliance: Non-adherence to standards and policies result in fines.

The common mistake profit-losing facilities commit is that they do not recognize the importance of getting a deep dive into these elements. Going unmonitored, these elements stealthily consume your budget and adversely impact profits in the long term.

The Solution: Set up a fixed schedule to audit cost drivers—emergency repairs, asset downtime, energy usage, vendor charges, and safety lapses. Then break down each expense line-by-line and compare it with expected benchmarks. That gives you a clear picture of where money leaks out.

Further, drop vendors who don’t deliver matching value and replace inefficient assets before they start eating up maintenance and power costs. Next, stick to compliance requirements to avoid penalties and keep an eye on hourly rates, trip charges, and hidden markups. That’s how you can successfully plug cost holes and keep profits intact.

6. Lack of Analytics Vision

“Today, any facilities manager looking to stay on top of the game, needs to be increasingly data-driven. The profession is moving away from simply being a reactive, dispatcher of technicians for work requests,” notes David Markowitz, a communication professor at the University of Oregon.

“We can interpret the enormous power data analytics offer for building a sustainable, high-performance facility. However, remaining distant from predictive capabilities makes facilities stagnant. For instance, if you take the coliving sector, absence of data-driven operations will slowly drain your profitability and by the time you realize the full picture you would have suffered a lot. Such a stagnancy is contributed by the following factors:”

• Data Literacy: There’s weak data literacy amongst leaders.
• Data Quality: Data is not worth deriving value from, and executives don’t have faith in it. There is no single version of the truth, as data is siloed across functions and difficult to access.
• Tool Capabilities: Even after investing in analytics platforms, the challenge of developing strong skills in a shorter span of time keeps haunting executives.
• Resources: There are no sufficient resources to implement or streamline analytics across processes.
• Change Management: Top management is not willing to adopt a data-driven culture

When facilities fail to leverage analytics capabilities, they witness the resultant impact in the form of higher costs, escalated resource use, and frequent equipment failures—undermining core goals tied to organizational efficiency, facility management, and sustainability.

The Solution: Start with auditing existing data sources to identify gaps, remove silos, and bring all operational data under one roof. Also, set up a central analytics dashboard that shows real-time metrics linked to energy use, equipment health, and workforce efficiency.

Training department heads to read and act on data without waiting on technical teams is equally important. Make them accountable for results tied to specific analytics. Once data starts driving daily decisions, resistance to change drops and the system runs like clockwork.

7. Not learning from poor KPI scores

Increasingly, there has been a lot of focus and emphasis on monitoring KPIs across processes and functions in the facilities industries. And yet, when it comes to taking decisive action or making those KPIs insights actionable, facilities management teams find themselves struggling many times. Measuring performance poorly i.e. not taking actions using those insights can come with awful consequences on cost front. Some examples of poor KPIs include:

• Bad First-time Fix rate: Operators make multiple visits to repair the same asset/equipment. It is a clear indicator of non-performing teams and poor customer service.
• Higher Number of Repeat Visits: It is directly correlated to a bad first-time fix rate and a poor figure denotes poor customer service.
• High Average Time and Cost: Vital for scheduling and measuring the facility team’s performance, high average time and cost are indicators of overutilization of time and cost.
• Low Technician Utilization: Your technicians are spending more time on paperwork or in transit activities as compared to spending efforts on the core activities.
• Revenue Leakage: It occurs due to non-billing or under-billing that fails to catch your notice which causes a reduction in revenue.
• Low Service Profitability: The revenue generated is not par with the expectations, resulting in lower than targeted profitability.

The Solution: Build a system where each KPI has an owner responsible for reviewing results and driving corrective steps. Use fixed monthly review meetings to flag poor scores and demand immediate actions tied to deadlines.

Back the process with a root-cause checklist for every KPI failure—be it repeat visits, revenue leakage, or low technician utilization. Link these failures to business impact, and mandate course correction within the next cycle. Keep the loop tight, visible, and accountable.

8. Failure to Identify Pilferages

Leaders need to be attentive to the menace of pilferages that stealthily eat away revenue. The impact of these attritional losses can be massive as along with causing loss of inventory, they can increase security costs and also result in loss of customer trust.

Pilferages are usually associated with inventory, caused by unauthorized actions during the course of its journey in the value chain. However, spare parts, consumables, and all goods that facilitate operations can be pilfered. Here are the areas where most instances of pilferage occur:

In-transit pilferages

It happened that in 2011, a driver of a transportation service provider reached a distribution centre in Ontario, California. The contract for loading was obtained by the driver from an online platform. However, after the trailer was loaded and the driver departed, only to be not seen again.

The incident highlights how facilities management might not account for in-transit pilferages, however, the above episode sheds light on how the absence of verification mechanisms at facilities can result in in-transit pilferages.

Warehouse pilferages

What if pilferages occur where they are in the custody of those who are responsible for safeguarding them? Warehouse pilferages are caused by poor storage practices or inventory theft at warehouses. The theft can be committed by warehouse supervisors by colluding with external parties.

Store pilferage

Common in the retail industry, store pilferages can bring a heavy burden on facility managers when left unmonitored. Operating a retail store is a highly complex job. Not just the merchandise but even every transaction is a potential source of revenue pilferage.

The Solution: To tackle pilferages head-on, facilities must adopt strict access controls, GPS-enabled tracking for transit, and digital inventory logs at every checkpoint. Every handover— loading bays, warehouses, or stores—must follow a verified process backed by ID checks and timestamped records and no goods should move without a trace.

Inside warehouses and stores, rotate staff duties, restrict access to high-value stock, and install CCTV in vulnerable zones to tighten the screws. Conduct surprise audits and daily reconciliation to create pressure points that discourage theft.

9. Inability to Hire the Right Talent

Hiring the best talent can be one of the biggest challenges of facility management when there is no dearth of opportunities for experienced professionals. What lands businesses into this challenge is the failure to retain good employees.

As per Alana Dunoff, a facility planner veteran, cross-training can prove helpful in retaining employees, and encourage them to remain bonded with the business.

The challenge is most people leave without transferring knowledge, which means you need to train new hires – again you need to inflate your time and cost budget.

The complex hiring cycle, lack of resource pool, and the need to go to places to hire trained professionals are some factors that make hiring a challenging exercise for facilities. The hiring overheads can thus snatch away a good portion of revenue.

The Solution: To break out of the cycle of hiring missteps, businesses must cast their nets wider and rethink how they source talent. As the first basic step, tap into vocational institutes, trade schools, and apprenticeship programs. It will open doors to skilled professionals who are ready to hit the ground running. Also helpful is taking referrals from experienced staff which will bring the most apt talent.

Retention is as important as hiring. Set up mentorship and knowledge transfer sessions before someone walks out the door to avoid the cost of training new hires from scratch. When senior staff pass the baton before leaving, new employees don’t have to start from square one. Overall, as said it saves costs – both time and money for your organisation.

10. Overwhelming Technology and Change

“Digital transformation requires a jump on the technology side, but it requires a leap on the people side,” says Bill Gundrey, executive director for digital engineering and operations at Raytheon Missiles & Defense.

So, bringing changes in the attitude of team members is as important as thinking about adapting to ongoing innovations. Not lacking a vision can be a threat, but having a vision and not leveraging it for advantage due to a rigid mindset can be the biggest blockage for facilities.

To give an example, in general, 79% of businesses now see predictive maintenance as the most important application of industrial data analytics. So, the move towards IoT, AI, and Cloud in FM is already gaining momentum. Facilities that fail to recognize these advancements will fall behind in the race. Changing the mindset is one of the biggest obstacles in implementing CAFM and other important technologies that aid facilities.

The Solution: Start with a focused internal assessment that pinpoints outdated systems and process bottlenecks. Based on those findings, choose one high-impact area and roll out a controlled pilot using a practical digital tool, such as CAFM or a sensor-based preventive maintenance solution. Keep the scope tight and accordingly set firm timelines, assign ownership, and track outcomes. Let that initial step serve as a working example.

Once the pilot implementation delivers results, use it to kick-start structured training sessions led by early adopters within the team. Pair these sessions with open discussions that address doubts without brushing them aside. Next, actively involve team members in taking future steps. Over a period of time, resistance will fade and the entire team will become more welcoming to new changes.

11. Managing Lease

With varying state laws and unclear lease terms that may lead to disputes, managing leases is always a complex task. If you have facilities across multiple geographies, you may have to deal with inconsistent legal frameworks and build a thorough understanding of local regulations.

Moreover, unclear lease provisions regarding maintenance, repairs, and responsibilities can spark costly conflicts. Issues like ambiguous common area maintenance (CAM) charges or expense allocations bring up financial surprises. Vague renewal and termination clauses further complicate matters and expose you to financial and legal risks.

The Solution: Start by reviewing and negotiating lease terms with legal counsel. Any ambiguity in responsibilities should be clarified, especially when it comes to maintenance, repairs, and operating costs. Clarify every provision so that both parties know their obligations.

Stay up to date on local and state laws affecting lease agreements. Study and understand them thoroughly. Being aware of local regulations, such as rent control laws in cities like New York, reduces the risk of non-compliance.

Manage leases digitally. Rely on remote legal services to guide electronic transactions and verify cybersecurity standards. By using a comprehensive facility management system, all lease documents, key dates, and obligations are organized in one system. It will also help track insurance clauses, operating costs, and market-specific rules.

Review lease trends and market changes regularly so that you can renegotiate terms before they become a financial burden.

12. Embracing Sustainability

Going green in facilities management brings several obstacles to the table. Outdated HVAC systems, inefficient lighting, and water wastage are still widespread across older buildings. Tracking energy usage without smart tools creates blind spots, while regulatory norms like LEED, ECBC, and ISO 14001 demand detailed audits and strict documentation. Added to this all, juggling multiple sites only adds to the complexity.

There are upfront costs for retrofits or clean energy setups that make decision-makers drag their feet. Meanwhile, the pressure keeps building. According to the International Energy Agency, building operations account for 30% of global final energy consumption and 26% of energy-related emissions—8% from direct sources and 18% from electricity and heat generation. So, it is incumbent on every facility manager to make the facility energy efficient.

The Solution: To avoid running around in circles, facilities teams should start by conducting a gap analysis to see where operations fall short. Analyse your energy consumption, bring in experts right at the outset to cut through the clutter and map out viable upgrades. Leverage facility management software to track usage trends and identify inefficiencies that would otherwise go unnoticed. Next, swap power-hungry HVACs with energy-star-certified systems, install smart sensors for lighting and occupancy, and shift to renewable sources like rooftop solar plants so as to bring down consumption without turning operations upside down.

Critically important is to map changes against requisite standards such as LEED, Energy Conservation Building Code (ECBC), or ISO 50001 to keep things above board. Instead of biting off more than you can chew, phase changes and document each step, improve, and use this iterative framework to march towards a completely sustainable facility.

Takeaway: Embrace Technology to Overcome Facility Management Challenges

When facilities act with a lackadaisical attitude, they end up building a precarious foundation. It’s high time that facilities leaders understand the importance of digital enablement for preventing the erosion of revenue. Building and deploying advanced facility management software can help achieve many goals in a single stroke.

Last but not the least, imperfection may be acceptable; however, not acting in time will never be. It’s never too late to make a new beginning, but you need to identify the points where shifting gears becomes essential. You must know how facilities management trends are shaping the industry and adapt to changes fast. To build profit-centric strategies, start embracing the change from today itself.