Facilities leaders are under constant pressure to control costs while maintaining uptime across distributed portfolios. When budgets tighten, Average Cost per Work Order often becomes the metric under the microscope. If it looks close to benchmark, teams assume costs are under control.
That assumption is where the $50 problem begins. A $50 increase in Average Cost per Work Order feels insignificant in isolation. At scale, it quietly becomes one of the largest drivers of Total Cost of Ownership (TCO).
Why Average Cost per Work Order Is a TCO Multiplier, Not a KPI
Average Cost per Work Order is commonly treated as a performance indicator. In reality, it functions more like a multiplier that amplifies risk across a facilities portfolio.
When paired with high work order volume, repeat repairs, and inconsistent execution, even a modest cost delta compounds rapidly. This is especially true in multi-site retail and restaurant environments, where maintenance activity is frequent and geographically dispersed.
According to the NACS State of the Industry Report, repairs and maintenance expenses continue to outpace overall Direct Store Operating Expense growth, increasing pressure on facilities teams to manage costs at the work order level with greater precision.
The Math Behind the $50 Problem
The TCO impact becomes clear when the math is applied. Annual TCO Exposure equals Average Cost per Work Order Delta multiplied by Annual Work Order Volume.
Consider a few realistic scenarios for distributed portfolios:
- 5,000 WOs/year X $50 gap = $250,000
- 10,000 WOs/year X $50 gap = $500,000
- 15,000 WOs/year X $50 gap = $750,000
These figures represent incremental overspend from a relatively small variance. Many national portfolios exceed these volumes, which is why Average Cost per Work Order is often underestimated as a TCO risk factor.
When $50 Becomes $1M: The Compounding Effect of Repeat Repairs
The exposure grows significantly when repeat maintenance enters the equation.
Across large facilities portfolios, repeat repairs are common. In one national specialty retail analysis, approximately 23% of reactive work orders were repeats within a short window, meaning the same asset generated multiple service calls without resolving the root cause.
Data consistently highlighted that reactive maintenance and repeat repairs are among the most significant contributors to rising facilities costs in multi-site restaurant and retail environments. Each repeat visit adds labor, travel, and materials costs while delivering diminishing operational value. When repeat calls are layered on top of a $50 Average Cost per Work Order gap, TCO escalates quickly into seven-figure exposure.
Where the $50 Is Actually Hiding
The $50 difference rarely appears as a single obvious overcharge. Instead, it is typically distributed across several small inefficiencies, including:
- Labor hours billed that exceed time on site
- Secondary technicians added without clear justification
- Materials with excessive markup or limited invoice detail
- Travel and miscellaneous fees embedded across invoices
Focusing solely on negotiated labor rates overlooks these contributors. TCO is shaped by execution discipline, not just pricing.
Stop Chasing Averages. Start Managing Total Cost of Ownership.
A $50 Average Cost per Work Order gap is not a rounding error. It is one of the fastest ways TCO quietly erodes facilities budgets. Sustainable cost control comes from managing execution at scale, not monitoring averages.
Partnering with a facilities management provider like Vixxo enables organizations to manage execution at scale by reducing repeat repairs, enforcing standards, and turning cost insight into sustained TCO improvement.
Frequently Asked Questions
Why is Average Cost per Work Order misleading as a cost metric?
Average Cost per Work Order masks work order volume, repeat repairs, and invoice inefficiencies. A portfolio can appear within benchmark while still overspending significantly due to compounding effects.
How do repeat repairs impact Total Cost of Ownership?
Repeat repairs multiply costs without improving asset reliability. Each repeat work order adds labor, materials, and travel expenses, accelerating TCO across the portfolio.
What should facilities leaders focus on instead of averages?
Facilities leaders should focus on execution quality, repeat-call reduction, invoice accuracy, and consistency across providers, all of which have a greater impact on TCO than averages alone.
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