In this first instalment of our new series on Best Practice in Office Utilisation, we highlight the importance of adopting a business-wide approach to unlock the new world of flexible working
If you work in a large corporation, the chances are your office real estate is your single biggest overhead after your staff. It’s also quite likely that you have one team responsible for your workforce and an entirely separate one for your building management. That is not ideal because, of course, people and places are closely intertwined. Corporations will never get the best out of their people nor make the most of their real estate assets if they don’t look at their organisations in the round. That is why when it comes to reviewing how you use your office real estate, the first step is to see the big picture. It’s number one on our list of best practice in office utilisation for a reason.
There are several reasons why a real estate review might come up. An organisation may be expanding and feel that it needs more space or vice versa. It might be opening in a new location or downsizing one. Perhaps someone has decided that the existing premises need a revamp, or gloomy economic predictions may have put real estate costs on the FD’s agenda. All of these are to a greater or lesser extent linked to the bottom line, and there is no getting away from the fact that Grade A offices are big ticket items. Our 2018 study ‘Wasted Space’ revealed that major organisations in the UK were collectively wasting £10 billion in under-utilised office real estate.
Yet one of the biggest current drivers for corporations carrying out real estate reviews has less to do with money and everything to do with people. It is, of course, flexible working. The benefits of flexible, or agile, working have been the subject of thousands of column inches and broadcast hours in workplace and business media. More and more corporations seeing the potential to make space savings. Having worked with more than 100 organisations worldwide, we’ve seen that the scale of those savings can be quite astonishing: 30 per cent or even more is typical. As our report into the subject showed, those savings could be turned into monetary advantage.
However, many of our customers have done things differently and used the data we collect for them to reimagine their workspaces. That’s because the way we work is changing, and people want to work in places that are adapted to new ways of working. In order to recruit and retain the best people, corporations are realising they have to satisfy the demand of a new, agile generation of workers. We have seen customers switching to flexible working to move away from the one-person-one-desk-and-a-shared-meeting-room norm, giving room to introduce new breakout areas for informal team chats and even franchised coffee shops.
It seems fair to say that responding to the new world of work should be mission critical for any major corporation. After all, flexible or agile working are undoubtedly hot topics in business, and the related area of smart buildings is also hitting the headlines. These new approaches to office and people management offer bottom-line benefits in recruitment, retention, productivity and efficient use of space. Yet many organisations are failing to unlock the potential, and this is especially true for large, well-resourced corporations who stand to gain the most. Too often it seems that a big picture either isn’t in the frame or doesn’t have the drive from the top behind it to make it happen. We see it manifested in organisations failing to get to grips with flexible working or opting for low-cost real estate reviews that give unreliable data to managers with blinkered ideas. Why does this happen?
The challenge is that implementing this kind of cultural change takes a business-wide approach. Without it, corporations will fail to implement flexible working properly and will miss out on the advent of smart buildings.
That means senior management needs to champion a holistic approach to reorganising the workplace. It shouldn’t be just the preserve of the real estate or FM team. It needs to be communicated across the whole business. HR should be fully involved to help to create an improved environment. IT has a crucial role to play.
So, management should be driving change. After all, the benefits are going to help you to deliver on corporate objectives, such as improved efficiency and better recruitment and retention. To make it happen will take more than delegating responsibility to a single team. We need to bring teams together on an enterprise-wide mission.
Advances in smart buildings add new emphasis to the need for a well-rounded approach to workplace design. We now have the technology, not only to enable flexible working but also to monitor and control the environment as never before, right down to the individual desk level. As smart buildings gain traction, it’s crucial that teams work together to reap the rewards, looking beyond energy savings and towards creating a better, more productive work environment, one that contributes to employees’ health and wellbeing.
By monitoring the office environment and how and when it is being used, we can create adaptable workplaces that address all users’ needs, from physical comfort and wellbeing to how the environment supports them to do their job effectively.
At Abintra, we are seeing an increasing number of enquiries from customers wanting to overhaul their working environments. That’s because employee wellbeing is rising up the corporate agenda.
Recruitment and retention are massive priorities for major corporations, and this is leading to more and more of them reviewing their working environments.
Unfortunately, many are making mistakes by failing to bring teams together to implement change. It’s also vitally important to involve the workforce in the process.
There is no doubt that corporations have space to play with. A recently-published Abintra report reveals that large office-based firms with 250 or more employees in England and Wales are together spending more than £10 billion on under-used Grade A office space.
Abintra pioneered workplace utilisation technology more than a decade ago and has since advised more than 100 corporations worldwide to monitor office usage and redesign workspaces. We know it can be done.
It all relates to organisations valuing their number one asset, their people, and leveraging their second biggest overhead, their workplace, to develop environments that address these key factors.
In London alone, the cost of office space being under-utilised is more than £4 billion annually, the report concludes, with large firms in other regions collectively squandering billions more.
Big employers with large office spaces are likely to benefit the most by addressing the issue and switching to flexible working strategies such as desk sharing. They can use Abintra’s workplace monitoring systems and our specialist consultancy expertise to typically find an extra 30 per cent or more of space.
However, we don’t expect the findings to stimulate a rush to smaller premises. Of course, it’s possible to take the data and decide to downsize and save money, but most businesses choose to use their newly-discovered space to enhance the workplace, for example by introducing new agile working areas, such as in-house coffee shops and informal meeting spaces. These have proven benefits for productivity as well as recruitment and retention, so being able to accommodate them without having to take on extra space is a huge advantage.
Real estate decisions
Clearly, information about the amount of space a business actually needs in a given location is critical for planning future real estate decisions. It can also be deployed by risk managers to ensure sufficient space is available to keep mission critical operations running if there is a disaster within a building or at another nearby company location.
The report reveals that large office-based firms with 250 or more employees in England and Wales are together spending £10,158 million on unnecessary total occupancy costs – that’s rent, rate and associated costs of running a workspace and related office functions.
What’s more, the issue is probably on an even bigger scale than the report’s conclusions, since our calculations are based on modest estimates of the amount of space saving possible and the number of people who work in offices.
Footnote: Businesses blow billions on wasted office space
Big businesses in England and Wales are squandering £10 billion a year by failing to get to grips with under-used office space, as our study shows.
The report ‘Wasted Space: The colossal cost of under-used office real estate’ draws together data from our work with more than 100 corporations worldwide with figures from government and the property industry to put hard numbers on the issue for the first time.