1. May 2006
Smarter Workplace Roadmap –
How to implement workplaces that deliver
bottom line impact
Executive Summary
• WhilecostmaybetheinitialdriverofSmarter
WorkplaceSolutions(SWS),otherbusiness
benefitsfaroutweighthesavingsinreal
estatecosts.
• However, a reduction of workspace to staff
ratio of 0.85:1 can deliver $1.95 million in
savings per annum on fit out and rental costs
on a 5,000sqm tenancy.
• The cost of replacing staff in one Australian
company is estimated at five to six times the
cost of accommodating them – SWS can be
an important tool in the war for talent.
• Companies have found that improving
work location, choice and mobility helps
them retain staff and increase satisfaction
by empowering people with the tools and
authority to decide when and how they work.
• Companies have reported greater than a 65%
increase in staff satisfaction as a result of
moving into a smarter workplace.
• Procter and Gamble’s primary success
measures of SWS are worker satisfaction,
improved work productivity and work-life
balance.
• NCR currently have 8% of their global staff
classified as “virtual” which they are aiming
to increase to up to 22% through SWS. The
workspace to staff ratio here is 0.15:1
• Space reduction strategies were found
to be most successful when phased into
organisations, allowing the staff the benefits
of flexible work practices before reducing
workspace ratios.
• Common roadblocks in implementing
SWS include the organisation’s culture and
emphasis on being “seen” at work, middle
management territorial behaviour, document
access problems and impracticalities
associated with working from home
amongst staff.
2. 2 Smarter Workplace Roadmap
INTRODUCTION
Now that much of the low-hanging fruit (in terms
of CRE costs) has been harvested, organisations
are looking to the workplace as a resource to be
leveraged. Workplaces today are promoting choice
and personal empowerment that support the
high performance cultures many firms advocate.
The increasing awareness of these new workplace
environments has dramatically altered expectations
and is increasingly reflective of the connections
senior executives are making between the work
environment and business outcomes. As a result
contemporary organisations are demanding a greater
return from their real estate investment.
This paper looks beyond the fashionable design
trends to explore the benefits as well as the pitfalls of
Smarter Workplace Solutions (SWS). We consider
different objectives and different starting points
and how these translate into different combinations
of smarter workplace elements through the
experiences of a number of leading companies
across Australia and Asia. It is the third in our series
of papers addressing the value of the workplace
as an organisational resource; being The Smarter
Workplace Toolkit and The Future Office.
• Individual work as a % of an overall job scope is
expected to decrease by 20% by 2010, highlighting
the importance of collaboration.
• Flexible workspace configuration can decrease
churn costs by up to 50%.
• Critical success factors to implementing SWS
include support from CEO and business line
managers, integration with HR & IT, alignment
with company objectives, undertaking research
first with employees and strong communication
and training.
SMARTER WORKPLACE ROADMAP
3. 3Smarter Workplace Roadmap
• ANZ
• Bank of America
• EDS
• EMC
• J P Morgan
• NCR
• Procter & Gamble
LASTING THE DISTANCE
Smarter workplaces are not a destination, but
a journey.
The journey itself provides opportunities for
engagement, learning and change, but it also presents
obstacles and “speed humps”. We spoke with seven
CRE executives in the Asia Pacific Region whose
companies have embarked on the mobile and flexible
work path. Different organisations seek different
benefits, and use a variety of smarter workplace
strategies to deliver these. They offered to share their
perspectives on the goals, the successes, the challenges
and the outcomes to date. Those companies included:
KNOW WHY YOU ARE EMBARKING ON
THE JOURNEY
There is no definitive data on the uptake of SWS,
but the findings of our recent Corporate Real Estate
Impact Survey (CREIS) suggest that more firms are
looking at using such strategies: 25% of companies
surveyed believe they will have more staff than
workstations within the next three years, compared
to only 7% three years ago(1)
.
Most of the firms we spoke with acknowledged the
important role cost savings play in gaining the initial
attention of management. EMC acknowledge this
is the primary driver for the SWS initiatives they
have implemented. EMC divide their workforce by
function into fixed and floating. The majority of their
staff (60-70%) are currently classified as fixed, and
are allocated their own dedicated workpoint. For the
other 30-40% of staff who tend to be those in more
client facing roles, desk sharing has been introduced,
with a ratio of 1.5 staff per workpoint. This has
produced significant savings in real estate costs.
“It’s all about cost saving. We
targeted savings of 20% – 25% from
our real estate budget and these have
been achieved through a reduction
in space requirements, without any
noticeable negative impact on our
business”.
While EMC recognise the need to provide ‘something
back to staff’ in return for non dedicated workpoints,
the costs of doing this are significantly below the
savings achieved from requiring less space.
However, the other clear message to emerge from our
discussions with CRE executives was that while many
initially embarked down the SWS route as a means
of reducing real estate costs, companies have found
other beneficial outcomes emerging that they believe
will outweigh savings in real estate costs over the
longer term.
“Our SWS initiatives have resulted
in estimated savings of US$17
million p.a. in the global real estate
budget. Even allowing for the cost
of additional IT spending, this still
equates to a net annual saving of
US$7,800 per person”.
While the companies we spoke with wanted better
bang for their investment buck in corporate real
estate, they also use their workplace management
approach as a key positioning strategy and
differentiator from competitors. These firms set
their heading from a business rather than design
standpoint, seeking a range of organisation benefits,
depending on circumstances:
• Better ability to attract and retain talent by catering
to different generations and their working
styles and work-life balance expectations.
4. 4 Smarter Workplace Roadmap
• Improved support of knowledge workers by
providing them with greater choice and control
over when, where and how they work, resulting in
higher productivity.
• Enhanced communication and collaboration
between staff within and across different
business groups.
• An environment more conducive to inspiring
creativity and learning.
• An environment that better expresses their culture
and articulates their brand.
• Improved interface between customers and
front office staff.
• Differentiation from competitors.
• Reduced magnitude of direct real estate impacts
caused by constant fluctuations in staffing levels.
• Faster cultural and structural integration and
reduced real estate liabilities as a result of merger
and acquisition (M&A) activity.
These findings are consistent with the results of Jones
Lang LaSalle’s recent CREIS survey which indicated
that almost 60% of respondents cited non cost factors
such as increased productivity and interaction as the
primary driver for implementing SWS strategies.
RECOGNISE DIFFERENT
STARTING POINTS
While corporate real estate policies are commonly
applied globally or regionally, there are a number
of important local considerations that need to be
considered. At the Asia Pacific level, several firms
noted that SWS strategies tended to work better in
more ‘westernised’ markets (particularly in Australia
and New Zealand) and less well in Asian markets
such as Tokyo or China. One such company is Bank
of America, who have not introduced any desk-
sharing initiatives in their offices within the Asia
Pacific region.
We have identified four main reasons for different
SWS strategies and levels of application in different
countries from the companies we interviewed:
Cultural factors: The Asian work ethic tends to be
less suited to working from home as it attaches more
importance to being seen the office. This works in
respect of both staff, who feel more valued when
working in the office and management, who find it
easier to exert control when they can see their staff.
Real estate costs: The level of real estate cost is
another factor in determining in which markets
SWS initiatives are most likely to be implemented.
In practice, those markets with high commercial real
MAJOR REASON FOR IMPLEMENTING SWS
5. 5Smarter Workplace Roadmap
estate costs that would make SWS most valuable (e.g.
Tokyo and Hong Kong) are likely to be those where
residential costs and conditions (see below) are
likely to limit the extent to which such initiatives are
practical.
Home conditions: The stronger family ethic
and typically smaller accommodation in many parts
of the Asian region make it less practical for staff
to work from home. This has been found to be a
particular problem in Japan, China and Hong Kong,
where living accommodation tends to be very small
and densely populated with extended family, making
it extremely unlikely that staff would have the
benefit of an office or study from which to work in
their home.
Technology: The technology exists for fast, secure
and relatively reliable broadband access in most CBD
areas across Asia Pacific. The same can not be said
for residential areas in many countries and this again
limits the ability of staff to work outside of the office.
This is currently a particular problem in cities across
India, China and Indonesia.
For Bank of America, the most significant of these
reasons are related to the prevailing social and
business culture. Firstly, the traditional nature of
the Bank vests power within the business lines, and
most senior banking staff have not been interested
in creating innovative new workspaces. Secondly,
while senior staff travel away from the office they
strongly object to the idea of not having exclusive use
of their own workstation, and the majority of junior
staff are at their desk most of the time and would
be unsuitable candidates for sharing. Additionally,
the management culture equates performance with
presence and there is an “out of sight out of mind”
fear. Thirdly, many staff come to the office to gain a
sense of belonging, which would be threatened if they
did not have their own space. This is compounded by
the unsuitability of home environments for working
in many Asian countries. The Bank of America
was also concerned, as are many other financial
institutions, that data security could be compromised
by remote access. The Bank also believes that
locations close to public transport and the prestige
associated with occupying well-located top quality
space are greater motivational factors than the
internal working environment in terms of attracting
and retaining staff.
DIFFERENT ROUTES, DIFFERENT
CHOICES
Knowing your destination – that is, your company’s
objectives in implementing SWS – is critical. The
different goals of a smarter workplace strategy
may be achieved in a number of ways. Different
physical and managerial elements can be harnessed
in different combinations or sequences to achieve
different outcomes.
Expressing Culture and Brand
Part of the attraction of new forms of working is that
they reflect a modern, progressive and innovative
organisation with one firm we spoke with citing their
desire to “create a cool place to work.” It is difficult
to measure the impact that the working environment
has on staff satisfaction, but one firm reported a 67%
increase in staff satisfaction as a result of moving to
new premises.
“While we are a very cost conscious
organisation, the real benefits from
SWS initiatives are through changing
corporate culture. The only problem
is that this is very hard to measure
and difficult to change over a short
period of time...Reducing staff
turnover has a far greater impact on
the P&L than spending slightly more
on a higher standard of fit out”.
ANZ has developed new workplace guidelines that
draw their inspiration from the bank’s “Breakout”
cultural program, which has been active within the
6. 6 Smarter Workplace Roadmap
piloted a hot-desking strategy in order to substantiate
an estimated $13 million rental saving per year,
found that in the test group, savings of $27,250 p.a.
were completely obliterated by turnover costs
of more than $1 million(2)
. Staff turnover in the
group increased by a staggering 83% and morale
and satisfaction dropped significantly below the
company average. The lesson learned was that in
this particular instance “smaller working spaces and
better utilisation of floor space would potentially
generate more savings than the hot-desking method.”
This example reinforces the need for organisations
to clearly define where they are heading and to
understand what specific route is appropriate given
their starting point and circumstances.
It is critical that both the C-suite and the CRE team
are clear about the desired business benefits and
therefore the objectives of the program. Only then is
the strategy able to be mapped out, and the specific
elements that are required to implement it – such as
desk-sharing, mobile working, team-based desking,
or flexible working hours – able to be identified,
tested, refined and managed.
Mobilising SWS In The War For Talent
The number of people entering the workforce
is declining as the population ages, and with
employment levels at an all time high, companies are
increasingly seeking new ways to compete and get
ahead in the war for talent. Whilst remuneration is
important, today’s younger recruits are concerned
about the image of the company, placing high
emphasis on job satisfaction, work-life balance and
demanding greater flexibility in where and when they
work. Flexible work practices can be an important
strategy in the war for knowledge worker talent.
Replacing staff is an expensive exercise for any
business; recent studies suggest staff turnover costs can
equate to between one and two times annual salary.
While the specific numbers will vary between markets
and organisations, the cost of replacing senior staff
are likely to far outweigh the real estate costs of
company for a number of years. These guidelines
will be progressively implemented nationally
through new or refurbished fitout projects. In order
to support the endorsed management culture new
workplaces are far more open and less hierarchical
than before, and include a wider variety and quantity
of collaborative spaces, from formal to informal.
Changing corporate culture is generally recognised to
be a long term process which requires prolonged and
active support from senior management. While many
firms acknowledge the role of the physical work
environment in expressing the corporate culture,
only a few have developed a means of measuring or
quantifying how to measure progress against this
objective.
“We measure the success of our SWS
program not just through financial
measures such as occupancy cost
per employee, but also in terms of its
impact on changing the corporate
culture towards the workplace”.
Whilst many companies embracing SWS realise the
non-financial benefits they set out to achieve, the
potential negative impact on business performance
from an ill-considered SWS implementation may be
far greater than the real estate costs saved.
As an example, a financial services company that
7. 7Smarter Workplace Roadmap
housing them. By way of example, one Australian
based firm uses a ball park of 50% of annual salary
as the cost of replacing staff. (this equates to
$40,000 – $50,000 as the cost of replacing a middle
ranking employee). The real estate related costs of
accommodating this same person are calculated
as $4,000 – $5,000 for the workstation itself, with a
further $6,000 – $7,000 p.a. to cover rental and other
annual real estate costs. For this company, the cost
of replacing staff is somewhere between five and six
times the real estate cost of accommodating them. In
these circumstances, it clearly makes good business
sense to use real estate as a means of increasing
staff satisfaction and thereby reducing turnover,
rather than seeing it purely as a business cost to be
minimised.
“Within five years, all the cost savings
will have been exhausted, with the
longer term benefit of SWS being its
contribution to improved employee
retention”.
Procter & Gamble, consistently rated as one of
the top ten companies to work for, identified the
workplace as a potential tool which could be used
to increase their attractiveness as a global employer.
The company has introduced a ‘Flexwork’ program,
which consists of three interrelated components
encompassing management, human resources,
information technology and corporate real estate
strategies and policies:
• A work from home program
• Flexspace, hoteling and hotdesking set-up in
the office
• An open plan workplace based on a universal
layout, with an emphasis on collaboration,
comfort and a sense of fun.
The main drivers for the program are employee
attraction and retention through greater work-life
balance; with cost mitigation a secondary focus.
Success stories exist around the globe including
Singapore, Manila, India, Taiwan, Brussels, Geneva
and the US. About 10% of employees participate in
the Flexwork program worldwide. However, their
regional headquarters in Singapore has the first full
blown Flexwork program internationally – around
60-70% of staff (800-1000 people) are enlisted in
the project.
Procter and Gamble’s primary success measures are
worker satisfaction, improved worker productivity
and work-life balance, although project profitability
is also reviewed. The company measures the
success of the program through satisfaction surveys
performed three months after occupancy with both
manager and employee participating.
Providing Knowledge Workers With Choice
And Control
Other companies are looking for ways to improve the
effectiveness of their top talent, and as the McKinsey
Quarterly reports(3)
: “what makes these workers
valuable is their ability to work collaboratively, to
leverage ‘relationship capital’, and to improvise
and improve new solutions within an environment
that fosters trust and constant learning.” It is widely
suggested that leveraging and maximising the
value of knowledge worker interactions is a key
requirement for gaining competitive advantage in the
current business climate.
To do so companies are starting to change the way
they organise and manage their talent and enabling
technologies. Management consultants McKinsey
& Co suggest that “the levers that managers must
pull to get this job done [are] flattening hierarchies
and creating an environment for constant learning.”
However it is critical to understand exactly what
a company must do to use these workers most
effectively and it is here that the companies we
surveyed believe SWS strategies can play an
important contributory role:
8. 8 Smarter Workplace Roadmap
“It’s all about talent. Talented people
make far more contribution to our
business than real estate can ever
achieve by reducing space”.
Research from the Buffalo Organisation for Social
and Technological Innovation (BOSTI) states that
the benefits of a well-thought out workplace strategy
are equal to 3-15% of an employee’s annual salary, or
4.7-23% of corporate profits on a per employee basis.
This is equivalent to around $1,900 to $9,600 per
employee per year(4)
.
Flexible arrangements provide staff with greater
choice and control over when and where they work,
and improved ability to balance work and personal
demands in a way that suits their circumstances
without compromising performance outcomes.
Choice and control is provided mainly in two ways;
flexible working arrangements and work mobility.
Flexible Working Arrangements – Staff have more
flexibility in determining where and when they
work, for example through shorter working days,
days spent working from home or flextime where
they take time off in lieu of longer hours for certain
periods. Some firms or job types require that these
arrangements adhere to a fixed schedule; others are
more fluid and reactive to changing demands.
“We have found that offering more
flexible working practices has been
a big factor in attracting women
returning to the workforce”.
Approximately 10% of all employees at JP Morgan
have volunteered to join the firm’s ‘flexible working
policy’. The employee nominates their own
arrangements in terms of the hours they wish to work
and the number of days that they will be based in
the office. This scheme has proved to be extremely
popular and the level of usage is increasing over time.
Workspace surveys undertaken by JP Morgan show
that most desks are occupied for between 40% and
60% of the working day, which is largely due to the
high number of staff working flexible hours. While the
company currently allocates a dedicated workpoint
to all staff – even if they have chosen not to work
in the office for the entire week – it considers the
introduction of flexible working hours as a precursor
to changes in the physical layout of space and a
reduction in the ratio of workpoints per person. The
firm aims to slowly introduce changes to the physical
layout of the office space once cultural issues have been
addressed and staff have become more comfortable
with the new working arrangements.
Work Mobility – In most organisations (including
those interviewed) few people currently work away
from the office all of the time. What is much more
common is for between 5% and 40% of staff within
organisations to work part of the time within the
office and part of the time outside of their base office
(which may be in clients’ offices, in other offices of
the firm or working from home).
Of the companies we interviewed, only NCR has a
significant number of staff working entirely outside
of the firm’s offices through their Virtual Office
program. The program was established in the US and
Europe in 1999 and NCR have since extended this to
a total of 21 countries globally. This program involves
staff being defined as either office based (where they
are allocated a dedicated workpoint), mobile (with
an allocation of 1 workpoint per 3 staff) or virtual
9. 9Smarter Workplace Roadmap
(with one workpoint being allocated per 7 staff). This
program has proved to be very popular with staff and
around 25% of the firm’s eligible staff are enrolled in
this program with approximately 8% of staff being
classified as ‘virtual’. NCR hopes to increase this to
around 22% of staff over time.
The original motivation for this program was to reduce
real estate related costs, but as with other firms that
have implemented SWS initiatives, NCR have found
that the major benefit of this program has been to
increase staff satisfaction levels and to appeal to those
looking for more flexible working arrangements.
These observations are in line with research in
Europe and the US which has found an average of
around 15% of staff currently telecommute for part
of the time, with this figure expected to increase
to around 25% over the next 3 years. As with Asia
Pacific, far fewer people telecommute for the whole
week, with only 5% of total staff in Europe and the
US working at home full time, which is expected to
increase marginally to around 8% over the next three
years(5)
.
Companies have found that increasing work
location choice and mobility helps them retain staff
and increases satisfaction by empowering people
with the tools and authority to decide when and
how they work. This not only supports increased
effectiveness because people are better able to match
their immediate work needs to the environment (for
example a day in the office for meetings, mentoring
and project brainstorming) but can also increase
both work and personal time when commute times
can be avoided (for example a day at home working
on an important report). Greater flexibility also
enables people to juggle commitments such as
getting to the bank, supporting kids after-school
activities and communicating with colleagues in
different time zones.
However, as many companies have discovered,
mobile working is not for all people and not for all
organisations. Staff whose jobs may theoretically
enable them to work from home part time may not
be able to due to space constraints, infrastructure
constraints (such as not being able to access high
speed broadband), or family constraints (such as
having young children or partners working from
home). Amongst the companies we spoke to there
was also an awareness that too much time away from
the office can reduce peoples’ connection to the firm
and to their co-workers. This may have the longer
term impact of lessening loyalty and commitment.
In one professional services firm in the US, specialist
senior staff were provided with the tools to work
from home up to four days per week. It later emerged
that many had realised once they were able to
function relatively independently that their sought-
after skills and experience could also be valuable
to competing firms – essentially these staff were
“freelancing” on the side.
Supporting Collaborative Work
To maintain a sustainable competitive advantage
companies have to innovate to survive and deliver
increased profits. However, ideas are not generated
in a vacuum, they stem from interaction and
exploration between people. The percentage of an
individual’s work product that will depend on group
input is increasing: Gartner Dataquest suggests that
individual work has decreased from approximately
40% of effort in 2000 to around 30% today, and will
reduce to only 20% of time by 2010. As individual
10. 10 Smarter Workplace Roadmap
work can increasingly be done from anywhere, work
done in the office is becoming increasingly more
collaborative.
Smarter workplace environments are designed to
promote and facilitate interaction among permanent
and project teams, and also between people who
wouldn’t normally have opportunities to share ideas
and experiences, in the belief that such interaction
can spark ideas and stimulate thoughts leading to
business improvements. At the same time, individual
workspace requirements are diminishing, while
group workspaces become the larger portion of the
work environment.
“Research suggests the ratio of
individual to collaborative space
is likely to shift from around 80:20
at present to 60:40 over the next
five years”.
Work environments are becoming more
standardised and at the same time more flexible in
terms of customisation to different individual and
team needs. Many of the organisations we spoke with
have, or are in the process of, eliminating cubes in
favour of mobile desking systems and allowing teams
or business units to configure their environment
(within certain parameters) to suit their needs for
greater or lesser degrees of individual or collaborative
work. This may include offering a ‘menu’ of different
spaces, such as war rooms, informal team discussion
areas, individual collaboration tables, huddle rooms,
meetings rooms and staff cafés.
These environments also reinforce the trend to flatten
hierarchies, as status differences are less apparent (or
indistinguishable) through observation of individual
workspaces. While many organisations that have
moved to standardised workspace components
still nod to seniority through allocation of prime
locations such as windows and corners, more
emphasis is placed on enabling staff to customise
individual workspaces according to functional need
through use of a “kit of parts” which may include
such items as work-surface extensions, small meeting
tables, additional storage or shelving.
The firms who have partly or fully implemented
these types of work settings, such as ANZ, say that
the primary benefits have been the opportunity
to facilitate the frequency and quality of chance
meetings. This is important when work requires a
high level of knowledge sharing:
“The greater level of interaction
encouraged in a denser, more open
environment has been a positive
experience. We have anecdotal
evidence of this resulting in increased
productivity and are now seeking to
quantify this through more rigorous
surveys and monitoring processes”.
However noise levels, which contribute to increased
distraction and probably reduced productivity
(particularly where concentrated, focused work
is required), continue to pose problems for most
organisations in the short term. This is often
addressed through educating staff to work more
quietly in open plan environments, phone etiquette
and other desirable and undesirable behaviors. Some
organisations, such as EDS, have also installed white
noise systems in the building to reduce the impact of
distracting noise.
There are also bottom-line benefits from
more standardised, flexible and mobile work
environments: the costs associated with churn
(reconfiguring work areas, moving furniture,
changing wiring and communications and building
partitions) can be reduced by up to 50%, with
employees able to reconfigure themselves, move
locations and regroup as needed. For a 10,000sqm
facility previously averaging 40% annual churn,
such a reduction could equate to as much as 166,000
11. 11Smarter Workplace Roadmap
per annum in direct cost savings(6)
. Some of the
organisations we interviewed who have implemented
widespread mobile work practices and settings, no
longer even record churn expenditure.
“More flexible layouts allow for more
efficient ‘churn’ (rearrangement of
space between teams and functions)
without incurring major refit costs.”
EMBARKING ON THE JOURNEY
Understanding How People Work
Most organisations recognise that SWS strategies can
not be uniformly applied across their entire office-
based workforce. Staff surveys or observations can be
useful in helping organisations map the mobility and
workstyle characteristics of different job types.
12. 12 Smarter Workplace Roadmap
There is a general recognition that different strategies
will need to address the requirements of each of these
groups.
For example, at ANZ providing more flexible
working hours and conditions is regarded as an
important tool in the banks’ attempt to increase
staff engagement and attract/retain staff. They have
a particular focus on attracting older workers and
women returning to the workforce. The emphasis
to date has been on enabling staff to work from
home, with most staff still provided with a dedicated
workpoint, supported by an increased variety of
spaces enabling formal and informal collaboration
and knowledge-sharing in the office.
Setting Appropriate Sharing Ratios
With the increased use of SWS strategies, the level of
floor space per person and the ratio of workpoints
per staff are both expected to decline over the
next five years. Workspace to staff ratios for the
companies interviewed range from 0.95:1 through
to 1:7 staff, and there are examples of organisations
that have gone even higher, where staff roles
and workstyles (and enabling technologies and
management policies) permit.
Other research undertaken by Jones Lang LaSalle(7)
reveals that around two thirds of companies are
expecting to reduce the overall level of floorspace per
employee over the next three years. There are two
main drivers of this trend:
• A decrease in the size of ‘private space’ due to the
introduction of smaller workstations.
• A shift from private space to more public/
collaborative space.
Current levels of total floor space per person vary
from 11sqm to 17sqm among the companies*
we spoke with. However as smaller individual
workpoints should be balanced with more public
space, the overall level of floor space per workpoint
tends to fall modestly. Other research(8)
supports
this downsizing trend, suggesting that the ratio of
individual to collaborative space is likely to shift
from around 80:20 at present to 60:40 over the next
five years.
“Space savings from new working
practices have generally been ahead
of expectations”.
The firms we spoke with had in the main adopted a
“softly softly” approach to introducing desk-sharing,
an approach found to be valuable in gaining early
buy-in and allowing people to get used to different
ways of working. This system has allowed Procter &
Gamble to achieve a ratio of 0.8:1 in their Singapore
facility. A tighter density of 0.75:1 was originally
targeted but this was found to be unworkable.
A lower ratio is considered achievable over time, as
staff become more familiar with working outside of
the office.
However, the exception to this moderate, incremental
approach to desk sharing is EMC, who due to the
nature of staff functions and workstyles were able to
achieve an average workpoint: staff ratio across the
Staff Workstyle
Classifications Nature of activities
Time typically
spent at their desk Also known as
Office based Admin/Support/Finance >80% Territorial/Zoners
Partially office based Client facing 40% – 60% Roamers/mobile
Based outside of office Consulting <20% Virtual/Road Warriors
While the definitions (and the names used) vary
between organisations, three broad groups of staff
can typically be identified in terms of their relative
mobility:
13. 13Smarter Workplace Roadmap
Company
Workpoint:Staff
Ratio* Comments
EMC
0.67:1 –
Maximum
0.85:1 –
Average
Maximum applies to customer facing staff where 1 desk is allocated
per 1.5 staff.
30-40% of staff currently share desks with a further 60-70% allocated
dedicated workpoints.
NCR
0.33:1- Mobile
0.15:1 – Virtual
Staff are classified as fixed (1 workpoint per person), mobile (1
workpoint:3 staff) and virtual (1 :7 staff).
Procter &
Gamble 0.8:1
Applies to Singapore facility only.
Tried to reduce ratio further (to 0.7:1) but found this created too
dense an environment.
EDS 0.85:1
Currently working on 0.85:1 in their AP regional HQ (Sydney),
looking to reduce this further to 0.75:1 as more staff are
accommodated into the existing fitout.
ANZ 0.95:1 Currently provide desk for nearly all staff, this may change in time.
Bank of America
JP Morgan 1:1
Still allocate one workpoint for each staff, but have plans to reduce
ratio over time as staff become familiar with more flexible working
arrangements.
(*) Ratios apply to those staff/facilities were flexible working programs have been introduced
firm of around 0.85:1. This ratio would be equivalent
to a saving of 15% of floorspace (all other things being
equal). For an average fitout cost of $1500/sqm this
would add up to around $1.125 million on a 5,000sqm
fitout. In terms of annual rent this same 15% reduction
could reduce gross rental by $375,000 per year,
assuming rent of $500/sqm p.a. including outgoings.
These estimates don’t allow for further savings in
IT equipment and infrastructure, churn costs, other
fitout-related and operating costs.
The following table summarises the desk-sharing
ratios for the seven firms interviewed:
Territorial behavior, the ‘claiming’ of space in free
or unallocated areas, sometimes known as ‘nesting’,
emerged as an issue with some of the firms who had
implemented some form of desk-sharing. This tends
to be more likely where sharing ratios are low and
staff still spend a fair degree of time in the office. It
also emerges when two or more people share a single
dedicated workspace, where one person gradually
begins to assert their “ownership”, for example
through placement of personal items, leaving
work files on the desk, rearranging the workspace
for aesthetic or personal rather than ergonomic
reasons. Managers need to recognise that this
behaviour is natural and quite common, especially
within organisations where there has been a strong
entitlement culture. Workplace rules should be
enforced firmly but empathically, and appropriate
behaviour constantly reinforced. However, many
organisations have found that if management do
not enforce the workplace rules or do not adhere to
those same rules themselves, desk-sharing strategies
gradually become eroded over time.
All of the firms we spoke with agreed that besides
territorial issues, document access is one of the
biggest potholes on the road to mobility. Access to
team files and storage as well as to personal reference
materials can be problematic. The physical location
of shared desks can help alleviate some of this
problem, for example ensuring desks are within or
close to team areas, and that parking bays for mobile
personal storage units are also proximate. However
this design strategy may not work due to other layout
constraints, or may clash with the desire to create
lively hotdesking hubs near breakout spaces, or the
14. 14 Smarter Workplace Roadmap
desire to facilitate wireless touchdown anywhere in
the building. As with any workplace strategy, the
optimal solution for each organisation should be the
result of careful balancing between different priorities
and desired outcomes.
Efficient Scheduling and Managing of Space
As the number of staff sharing workpoints increases,
more attention must be paid to systems for booking
and reserving non-assigned or shared spaces.
Most companies currently use a mix of formal and
informal booking systems, depending on the extent
of mobility and sharing and the procedures in place.
For example, many companies manage hot desks
on a “first-come, first-serve” basis, particularly where
the desks are co-located in clusters around natural
activity hubs such as breakout areas, cafes, lift lobbies
or meeting facilities. This system saves the costs of
implementing and integrating new software and
supports an informal and more spontaneous way of
working. However tracking and optimising utilisation
can be difficult through an informal system.
At Procter & Gamble all workpoints in the areas
identified for Flexwork are open to anyone. A clean
desk policy is in place, with staff storing their files and
other possessions in mobile trolleys that are ‘parked’
in a central facility overnight. An electronic booking
system was originally used, but this resulted in a
number of problems, the most serious of which was
the fact that many people were reserving spaces in
advance and not using them, an example of territorial
behavior. Another interesting issue that the software
scheduling system revealed was the tendency for staff
to book to come into the office on the same day as
their managers. It was thought that this behavior may
have been a cultural hangover from the days of hands
on performance and perception management. It was
serious enough however to create peaks and troughs
in usage across the week, resulting in some days when
there were insufficient desks available. Procter &
Gamble therefore reverted to a manual system known
as ‘Take, Tag, Go’. This involves employees selecting
their nametag and placing it on a board showing the
layout of all the workpoints when they arrive at the
facility, a system which to date has worked well for
the organisation.
Formal scheduling systems are generally regarded
as an extension of meeting room booking practices.
There are a number of systems on the market, and
these are evolving to include floorplans, ability to
identify and select spaces based on particular attributes
and to request services or equipment. However it is
important that these systems are user-friendly, well-
integrated with other systems and scaleable.
Sun Microsystems couldn’t find an off the shelf
product that met all of its needs so the organisation
developed its own software as part of its “i-Work”
program, and now markets this capability to other
organisations. “SunWeb” is being established as the
primary tool for connecting people, services, and
resources within the firm, and “Sun Open Work
Practice” offers a model for managing a mobile,
globally distributed workforce through a flexible
workforce environment that maps the way employees
work to organisational objectives and policies.
Sun and other organisations we spoke with confirm
the benefits of automated scheduling systems lie in
15. 15Smarter Workplace Roadmap
the ability to avoid scheduling conflicts and predict
peak demand times for specific types of workspace
and thereby optimise utilisation levels. Some systems
are also able to be linked with concierge systems
to provide an enhanced suite of support services
for mobile or teleworking staff, such as stationery
and equipment ordering, printing services, travel
arrangements and catering.
Integrating Supporting Technologies
Flexible arrangements are usually (but not always)
associated with greater personal mobility. This may
be external to the primary office or within the office
environment. Mobility is supported by both hardware
and software communications and information
technologies, and it is not surprising that many of the
early mobility pioneers were IT companies such as
Sun, Cisco, Nortel, IBM, HP and Agilent.
Additional IT investments are often required to
support smarter workplace strategies, but most
firms have found these to be significantly less than
the associated savings in real estate costs that can be
achieved.
“Technology has been no problem
and we have been able to provide
staff with the required level of access
without jeopardising the integrity of
the company’s information systems”.
However without the appropriate investments in
information technology equipment and infrastructure,
mobile working can present challenges for co-workers
and managers who can find it difficult to rely on IT
networks and communications to share documents,
files, ideas and monitor/manage progress. While
training, education and transition management
can assist with these issues, for some companies the
burden of substantial investment in new technologies
and ways of working and managing outweighs
marginal savings in real estate or improvements in
productivity for certain individuals.
Information security concerns have also prevented
may organisations in the past from adopting more
mobile arrangements. Some of these concerns relate
to wireless network security, others to the risks
associated with making confidential data (such as
personal customer details) accessible outside the
physical office network. These issues are significant
and have serious implications for organisations
particularly in banking, insurance, accounting and
legal sectors. However IT security is constantly
developing and some of these concerns, while
no less critical, are able to be addressed in many
environments.
TRAVELLING TOGETHER IS CRITICAL
Most companies citied as critical to success the support
of senior management from the very early stages, not
only the CEO but the business line leaders who will help
implement the strategy into the groups they control.
The support of middle managers is also required to
make the strategy a reality, with some companies
finding that middle managers tended to be the largest
roadblock. It is important for CRE managers to “sell”
workplace investments to many levels and types of
stakeholder within their organisation, not just the most
senior levels of management.
At EDS the importance of gaining management
support became very clear early in the
implementation process. The company has
introduced a range of SWS initiatives in their new
Asia Pacific regional headquarters in Sydney,
enabling them to service up to 200 staff from 150
workpoints. However while senior management
were very supportive of moves to implement SWS
initiatives, middle management were more cautious
in their reception, and have shown a tendency to
be more territorial. This has created something of a
‘road block’ which initially reduced the effectiveness
of the program.
16. 16 Smarter Workplace Roadmap
PRE-DEPARTURE CHECKLIST
Alignment
With the company mission and
competitive positioning
Ambush
Be opportunistic – use business
imperatives to drive SWS
Activities
Investigate how people work and how
they want to work more effectively
Analysis
Develop a business case for the return on
investment over time
Approach
Incorporate multiple, mutually
supportive aspects of SWS
Alliances
HR and IT must be on board, mutually
reinforcing policies and procedures
Advantages
Get personal – “what’s in it for me”
Attitude
Transition management, training, and
“how to” manuals
Adaptability
Different sites, cultures and business lines
may have specific needs
Adjustment
SWS is not an end, rather a process of
continuous refinement
“The tendency for some middle
managers to resist the firms’ clean
desk policy and try and claim
certain space for their dedicated
personal use, has resulted in junior
staff becoming reluctant to use the
workpoints that are perceived as
belonging to more senior staff, even
when these senior staff are away from
the office for extended periods”.
Another factor identified as fundamental to
the success of any SWS program is the level
of co-ordination between the CRE team and
other functions, particularly Information and
Communication Technology (ICT) groups, Human
Resources, and any Cultural or Change Management
project teams. Given that many firms, such as ANZ,
regard SWS strategies as one component of broader
HR and workplace policies, it is important for CRE
to be closely integrated and a number of companies
have commenced down the route to an integrated
business support function.
This strategy is exemplified by Procter & Gamble’s
timing for the implementation of their “Flexwork”
strategy. The Global Business Services group was
established in the late 1990’s to combine over
seventy services, including Information Technology,
Facilities, Security, Human Resources and Employee
Services under one umbrella. This combined group
was able to monitor trends in the workforce and to
use this valuable knowledge to devise and implement
an integrated workplace solution.
17. 17Smarter Workplace Roadmap
…and in a way that maximises cost savings?
…and that drives the most efficient space utilisation
possible at all times?
Said differently, is your desk sitting empty right now?
We believe the most robust path to achieving
successful SWS programs is to:
1. Educate, gauge interest and identify concerns and
possible roadblocks
2. Build the business case
3. Design the implementation plan
4. Implement
5. Monitor for continuous improvement
REFERENCES AND RELATED PAPERS
(1)
CREIS 4, Jones Lang LaSalle (September 2005).
(2)
“Workspace not so Hot”, BOSS Magazine
(July 2004).
(3)
“Competitive advantage from better interactions”,
Scott C. Beardsley, Bradford C. Johnson, and James
M. Manyika. McKinsey Quarterly, 2006 Number 2.
(4)
“Leap Into Future Space”, Fischer, Glenn quoting
BOSTI. February – March 2000..Building Interiors.
Source: Haworth, Thought Shift. 2000.
(5)
“Global Workplace Trends”, Christine Barber,
Andrew Laing & Marilyn Simeone. Journal of
Corporate Real Estate (Vol 7, no 3) 2005.
(6)
The Office Churn Research Report, FMA,
December 2001.
(7)
Survey of US Corporates undertaken at Jones Lang
LaSalle’s Leading Edge events (2005).
(8)
“Global Workplace Trends”, Christine Barber,
Andrew Laing & Marilyn Simeone. Journal of
Corporate Real Estate (Vol 7, no 3) 2005.
CONCLUSION
There is a general recognition that while different
strategies are needed to address the requirements of
individual organisations, most companies are still at
a relatively early stage in their use of SWS initiatives
and more use is likely to be made of different
strategies, particularly those related to increased staff
mobility, over the next few years. The experience of
those companies who have embarked on the road to
smarter workplaces tell us that it’s really a journey
of successive small wins – and hopefully not too
many roadblocks – rather than a destination. Not
surprisingly, the lessons learned that they shared with
us were all about the journey, not about the physical
workplace results:
• Prepare a robust business case and clear projections
on the return on investment.
• Get senior-level buy-in.
• Know your staff and how they best work.
• Blend the SWS strategy with existing management
and workplace practices.
• Ensure new environments are pilot tested before
major program roll-outs.
• Train employees in how to use the new workplace
and new technologies.
• Create templates, guides and manuals to facilitate
process and wider implementation.
• Continuously refine and improve SWS.
• Communicate, communicate and communicate!
So how can organisations better utilise space and
capture value? Many already have some elements of
SWS in the workplace – the question is whether this
is being managed strategically to enable them to use
the workplace as a competitive advantage.
Is your organisation using SWS in a way that enables
you to provide flexibility for future changes in space
needs?
18. 18 Smarter Workplace Roadmap
ABOUT THE AUTHORS
Caroline Burns
In addition to heading the
firms Strategic Consulting team
in Australia, Caroline Burns
also leads the development of
Jones Lang LaSalle’s Smarter
Workplace Strategy capability
within Asia Pacific Region, and is one of the firms
global thought-leaders in this field. She is currently
undertaking research for a PhD within the School of
Business at the University of Sydney, analysing the
impact of corporate real estate on the competitive
advantage of organisations. Caroline has over
fourteen years consulting experience in corporate
real estate and workplace strategy and is passionate
about the value organisations can achieve by
aligning CRE with corporate strategy and leveraging
accommodation to address critical business needs
and issues.
19. More than ever before, your
success depends on the quality of
your decisions. As the global leader
in real estate services and money
management, Jones Lang LaSalle is
positioned to partner with you to
provide the quality advice needed
for making quality decisions. The
world’s best real estate intelligence
and knowledge base puts our
clients in the best position to make
the right decisions.
ABOUT JONES LANG LASALLE
Jones Lang LaSalle (NYSE: JLL), the only real estate
money management and services firm named to
Forbes magazine’s Platinum 400, has more than
100 offices worldwide and operates in more than
430 cities in 50 countries. With 2005 revenues of
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comprehensive integrated real estate and investment
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Jones Lang LaSalle is an industry leader in property
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portfolio of 923 million square feet worldwide. In
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management business, is one of the world’s largest
and most diverse real estate money management
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management. For further information, please visit
www.joneslanglasalle.com.au
