For more than a decade, facilities teams have been asked to reduce spend while keeping stores open, assets running, and customer experience intact. Yet across every vertical, operating costs keep rising. In grocery, repairs and maintenance increased 17.3 percent from 2022 to 2024. In convenience, repairs and maintenance grew 38 percent from 2021 to 2023. Days to Complete repairs are also stretching far beyond benchmarks, with some retailers averaging 14.7 days per work order while top performers complete similar work in 8.7 days.
Facility leaders are responding the way the industry always has. They negotiate hourly rates. They seek lower labor. They assume cost control starts with price per hour. But hourly rate reductions improve optics, not outcomes.
Hourly rates only represent 30 to 40 percent of a work order’s true cost. The remaining 60 to 70 percent comes from parts, time on site, trip charges, callbacks, and fees hidden deep inside invoices. These components, not the rate on the surface, determine Total Cost of Ownership.
Until organizations manage these drivers, budgets will continue to rise even when hourly rates fall.
A Simple View of TCO: Where the Money Actually Goes
Below is a clear breakdown of how a typical work order’s cost usually distributes. This is the part of TCO most organizations never see.
Total Cost of Ownership Breakdown
Percent of total work order cost
| Cost Component | Percent of Total | Notes |
|---|---|---|
| Hourly Labor Rate | 30 to 40% | Most visible, but not the main driver |
| Time on Site | 20 to 30% | Often inflated without geofence validation |
| Parts and Materials | 15 to 25% | Markups, inconsistent pricing, bulk invoicing |
| Trip Charges and Fees | 5 to 10% | Minimums, fuel, environmental add-ons |
| Callbacks and Rework | 5 to 15% | 19 percent of WOs repeat within 30 days |
| Administrative Waste | 5 to 10% | Delays, manual coordination, re-dispatching |
Key insight: If leaders focus only on hourly rate, they are controlling less than half of the real cost.
1. Hourly Rates Only Tell One Story
Hourly rates influence spend, but they rarely determine it. The biggest cost drivers occur after the technician arrives on site.
Examples pulled from recent multi-site invoice reviews show recurring themes:
• Two technicians billed one hour minimum each for a task that required 24 minutes.
• Automatic rate kickers added a second technician on every ticket.
• Travel and environmental fees appeared inconsistently.
• Sink repairs were billed without any check in or check out timestamps, making duration impossible to verify.
These patterns happen across convenience, grocery, restaurant, and retail. They inflate spend even when the hourly rate appears low.
2. Time on Site: The Silent Cost Multiplier
Time on site is one of the most powerful predictors of spend, yet it is also one of the least validated.
Without accurate tracking, a 20 minute repair easily becomes a two hour invoice. At scale, this becomes exponential overspend.
Current industry data shows:
• Work orders are averaging 14.7 days to complete vs 8.7 benchmark. Long duration correlates strongly with repeat dispatches and inflated labor.
• Nineteen percent of all break fix work orders occur again within 30 days. These callbacks reveal time billed does not always match quality delivered.
Time on site affects cost today and cost over the lifecycle of the asset. It is one of the strongest and most overlooked levers of TCO.
3. Parts Pricing: The Most Overlooked Contributor to Overspend
Parts pricing is one of the most inconsistent elements of a repair. Providers source, price, and install parts with varying markups. Without data to validate market pricing, organizations cannot see where overspend occurs.
Common findings include:
• Marine grade sealant billed at a 100 percent markup and multiplied in quantity.
• Parts billed through bulk formats that obscure line-level detail.
• Identical parts priced differently at similar locations.
Parts pricing can represent 25 percent of total cost, making it one of the largest and most controllable components of TCO.
Automated cost auditing makes this visible. In the last 12 months alone, a dynamic audit engine corrected more than 2.6 million dollars in overcharges tied directly to parts and labor durations.
4. Trip Charges, Add On Fees, and Everything That Quietly Adds Up
Fees like fuel surcharges, truck rolls, and environmental add-ons may appear small, but they add up across thousands of work orders.
With materials up 14 percent and labor up 9 percent on average, providers often offset rising costs by adding fees. Many are legitimate. Many are not.
Controlling TCO requires:
• Automatic flagging of inconsistent add-on fees
• Benchmarks for acceptable ranges
• Invoice validation tied to real-time data
5. Quality and Callbacks: The Hidden Lifecycle Costs
The most expensive repair is the one that happens twice. Callback issues are one of the strongest indicators that an organization lacks cost oversight.
One retail location accumulated 22,687 dollars in callback spend alone. Across the portfolio, 19 percent of all break fix tickets repeated within 30 days.
Callbacks drive cost in multiple ways:
• Additional labor
• Lost sales or customer disruption
• Shortened asset life
• Increased emergency repairs
Quality is not just an operational issue. It is a TCO issue.
6. The Technology Gap: Why Most Organizations Lack TCO Visibility
Most facility leaders want transparency, but technology is often not set up to support it. Eighty percent of CMMS users never use all of their system’s features, which means:
• Limited visibility into actual time on site
• No validation against parts pricing
• No monitoring of repeat calls
• No benchmarking across providers
• No linkage between asset history and cost trends
A TCO-focused technology model must connect asset data, provider performance, invoice validation, and cost benchmarks.
Without this, cost control remains reactive instead of proactive.
The Bottom Line
Hourly rates do not determine true cost. Total Cost of Ownership is shaped by:
• Time on site
• Parts pricing
• Trip charges and fees
• Callbacks and rework
• Speed to complete
• Provider performance
• Technology transparency
This is the real math behind FM. This is where budgets rise or fall. Organizations that shift from hourly rate negotiation to TCO governance see measurable savings within months, not years.
The next article in this series will examine the most underestimated TCO driver: time on site and why it is often the single largest source of hidden spend.
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