In the realm of enterprise workplace optimization, effective collaboration and alignment between workplace teams and CFOs is pivotal. Discover how aligning design, utilization, and CFO goals harmonizes productivity and employee satisfaction.
For many companies, workplace teams ultimately report to the CFO as the real estate portfolio represents one of the largest capital and operational expenditures for businesses to manage.
However, the lens through which the CFO examines their real estate portfolio may differ from that of workplace professionals. This disparity can create a barrier in terms of understanding how spaces function and should evolve.
To gain insight into what a CFO seeks to understand about their company's real estate portfolio, we engaged in a discussion with Omar Ramirez and Kayla Gottschalk from Collective Inc., a community-based consultancy for workplace professionals (to join Collective Inc.’s community, click here).
This conversation comes at an intriguing juncture for the workplace, as many large companies are considering the consolidation of their real estate portfolios. Particularly, CFOs will have numerous inquiries for their workplace teams regarding how to maximize the return on investment (ROI) from such an endeavor, all while sustaining consistent employee productivity and enhancing the office experience to retain talent.
If you're tracking usage through sensors and badge swipes, capturing usage data can be achieved in various ways. Gathering badge swipe data may require more manual review and organizing. This data is typically and approximately 60-70% accurate while sensor data is usually 80% accurate.
For general occupancy/utilization, we rely on occupancy sensors and badging data. However, this data becomes truly meaningful only when we can reference data points from similar sized companies. That being said, it's better to create your own internal metrics based on your unique company, culture, and office usage.
An effective measurement approach involves two key aspects:
Nevertheless, the value goes beyond merely calculating total occupancy/utilization--it lies in comprehending the patterns of people's presence in the office and the times they frequent.
What holds the greatest significance is analyzing the flow of when individuals predominantly enter the office and the specific types of spaces they prefer to utilize.
Furthermore, consider how your workplace strategy is communicated to employees. Many companies usually have designated days when employees come into the office, which could lead to days when the office appears "empty." For instance, if the CEO comes in on a Monday and is frustrated by the apparent lack of activity, they might overlook the fact that usage experiences natural ebbs and flows.
Consider a coffee shop—just because it's not constantly at 100% occupancy while open doesn't undermine its value. It's available when people crave coffee and will naturally have days with varying patronage.
Similar to the office, it's crucial to provide spaces that people require precisely when they need them. The fact that Mondays and Fridays might have light occupancy doesn't diminish the office's overall value.
Measuring the efficiency of space generally hinges on two major factors:
For instance, consider a conference room designed for six people. If your sensor data indicates that this conference room is utilized 70% of the time, that's a positive start.
However, understanding the specific usage details is equally crucial. If the same conference room, which experiences 70% utilization, is frequently occupied by only one or two individuals at a time, it might be necessary to reconsider its design. This insight could be revealed by comparing the sensor data with room booking information.
After collecting around six months of data, if you discover that the conference room is occupied by a single person about 30% of the time and is utilized for one-on-one meetings for the remaining 70%, you've amassed sufficient data to guide a spatial overhaul. Perhaps the area could be divided into a couple of smaller huddle rooms rather than functioning as a large meeting space.
It's important to note that evaluating the efficiency of a design is a gradual process. Historical data is essential to inform subsequent iterations and it's important to acknowledge the possibility of needing further adjustments in another six months.
The decision to consolidate or reduce real estate depends on company objectives, requiring alignment between our workplace program and the company's success metrics.
Let's consider a scenario where we operate as a hybrid structured model company, requiring employees to be present in the office on Tuesday, Wednesday, and Thursday. To initiate this transition, the foremost task is to ensure that all employees have adequate workspace and access to the necessary environments for their tasks. Here are key considerations:
Imagine a scenario where you have 10,000 employees and intend for them to use the office on the designated three days. However, if only 70% of employees are present due to factors like vacations, absences, or sick days, it might be feasible to design an office with a maximum capacity for 7,000 employees.
Remember, achieving confidence in portfolio consolidation demands a substantial period of collecting data on utilization and occupancy. Rushing into space reduction could lead to employee frustration stemming from inadequate workspace availability.
A single negative office experience, where an employee struggles to effectively perform their duties due to space constraints, has the potential to significantly color their perception of the entire office environment.
The decision to consolidate space should be grounded in thorough examination and open dialogue with employees. Failing to do so can lead to higher attrition rates and a decline in employee retention.
When opting for office consolidation and requiring employees to work in-office, it's crucial to provide them with a workspace and tools that match the effectiveness of their home office setup.
Following the pandemic, a majority of employees have successfully established efficient home working setups. Consequently, it's imperative that the office environment matches, if not exceeds, the effectiveness of remote work, rather than falling short.
Rushing into consolidation prematurely carries the risk of delivering unproductive spaces and a suboptimal employee experience. This, in turn, weakens the positive associations employees have with the office, potentially leading to reduced office attendance or, worse, employee turnover.
A prudent approach to consolidation involves measurement, gradual implementation, and careful reduction. Removing entire sections of your real estate portfolio without a deep understanding of employees' needs and preferences jeopardizes the creation of a positive office experience.
A common misconception among companies is that an elaborate interior design can compensate for an undesirable location and draw people into the office. Conversely, attempting to cut costs on the interior while being situated in a favorable area leads to a similar outcome:
Without an appealing structure within an attractive neighborhood, people will be reluctant to come to the office.
This principle applies across the board--for employees, customers, and partners. If the goal is to entice individuals to utilize your spaces, you must strike a balance between an appealing building design, a desirable location, and on-site services/amenities.
Amidst the dynamic landscape of enterprise workspaces, the harmonious relationship between workplace teams and CFOs stands as a catalyst for optimizing space utilization, design, and ultimately nurturing a thriving environment that encapsulates the enterprise's growth journey.
If you are considering consolidating your real estate portfolio, chances are you’re about to embark on a site selection journey.
If you are, please join us on September 27th at 2 PM EST for a webinar that explores how the Saltmine platform can help unify all the crucial data points and considerations of site selection, all while accelerating the process as a whole.
To register, click the link the image below:
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