Field services has all the key signifiers we look for in consolidation opportunities. The landscape is fragmented, it has strong revenue visibility, loyal customers and economies of scale.
Yet, outcomes vary for field services consolidators, as stakeholders often don’t recognise the fundamental differences that make this sector so unique. Faye Maughan shares her thoughts on why you must approach consolidation here with a people-first mindset:
1. Benefits of consolidation
Local field services operators are strongly positioned to win against large incumbents, with all the benefits of local entrepreneurialism versus a top-down approach. Combine this with bringing together local operators, and we see that real efficiency gains are possible:
- Route optimisation improves efficiency for engineers as well as limiting their time away from home
- Cooperation on larger, national accounts unlocks new revenue streams and enhances brand reach
- Spreading shared benefits across a broader revenue base enables greater resources for every individual in the organisation, from training centres to allow engineers to expand their skillset to improved digital tools that would otherwise be too expensive
- A bigger group allows talented employees to grow within the organisation, important for attraction and retention in a tight talent market
Individually, a local champion may struggle to service a multi-site national client. Together, it’s an attractive and more agile and responsive option to the larger players.
2. The right way to do it – empowering the local workforce
In field services, the loss of an employee is immediately felt by the customer. The engineer who has serviced a client’s boilers for seven years, who knows the building, who the client calls by name – that is the service to the end customer. The service is relationship-driven, locally rooted, and fragmented by nature.
This is all the more important in a market where labour is in shorter supply. The best engineers know they have alternatives, and for the consolidation group, that means their investment has a high propensity to walk out the door. What engineers typically want is the autonomy, fair pay, and freedom that drew them to the job in the first place. Clock watching, scripts, or aggressive upsell targets may have them looking elsewhere. Equally, out of all the things to save on in the group, pinching salaries is not the place save. Rather, schemes that allow top performers to benefit from their contribution to the group should be highly encouraged.
All this means that the best consolidators are those that think engineer-first. That might mean using group scale to give someone a patch closer to home, or ensuring pay structures genuinely reward output. The point is making clear that the acquisition is adding something to their working life, not taking something away. Get it right and they will deliver better service and in turn improved customer retention – getting it wrong tends to have a quick impact on the bottom line.
3. The old school consolidation playbook might not work
There is a tendency, particularly for PE-backed consolidators, to think about bringing everything under one brand as quickly as possible. However, while that may work for some companies, it’s not a one size fits all approach. A local business trading for 25 years under its founder’s name has built something genuinely valuable: a trusted reputation, embedded in its community, reinforced by word of mouth. Customers do not choose it because of its marketing. They choose it because their neighbour recommended it, or because they have used it for years and trust it. Individual businesses have individual cultures, that often reflect the needs of their local customer base.
We often see co-branding (“part of X group”) or other types of affiliation is often a good middle road to opening up the group benefits whilst retaining the local loyalty. This also gives more autonomy to local managers, who are empowered to continue to run their local hub / business in the context of the larger group. Consolidating under a handful of existing, strong, regional brands is another solution to preserve the legacy that has been carefully built over decades.
4. PE’s role is to add infrastructure, not interference
This raises a question. If it’s all local and individual – how is private equity helping here?
The answer is infrastructure. What local field services businesses often lack is the operational backbone that lets their people do what they do best, more efficiently and at greater scale. We tend to see a few common areas that smaller local businesses may struggle to deliver on their own:
- Scheduling technology that reduces dead time on the road and means the same team handles more jobs without working harder.
- AI-assisted tools that help engineers on-site, for example through report writing and compliance documentation.
- A common ERP system that enables data sharing and financial visibility across the group.
- Training and development pathways that give engineers a reason to grow within the group rather than go elsewhere.
Conclusion: consolidation is ultimately a people question
The economics of field services consolidation are real. But we see that success is not driven by the fastest to centralise, or to push cross-sell opportunities. Measures of success here are often engineer retention and satisfaction – that measure of M&A success, is likely to be what delivers long term growth. By doing the right things for the group, growth naturally tends to follow.
