Why Companies Pursue New Workplace Strategies in a Recovering Economy. SIOR Spring World Conference, Miami, FL May 11, 2012
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1 Why Companies Pursue New Workplace Strategies in a Recovering Economy SIOR Spring World Conference, Miami, FL May 11, 2012
2 Today s Discussion Understanding our current situation Walk through Knoll study findings Quick overview of ROI model Q&A audience discussion TD Bank 2
3 3 To understand the need for change, we first must understand our current situation
4 "Dull, lifeless work environments cause brain damage." * Elizabeth Gould, Princeton University 4
5 5
6 6
7 7
8 8
9 9 If this is so wrong, what can be right?
10 10 Capital One
11 11 Capital One
12 12 Philips
13 13 Microsoft
14 14 General Dynamics
15 15 Rio Tinto
16 16 HP
17 wanted to know more about distributed work in corporate environments What is driving change? How is new space being built? How has RSF/PP changed over time? What are the resulting metrics and ratios? Is there clear linkage to sustainability? What is the expected Return On Investment? 17
18 Survey Methodology Research Purpose: Document the drivers, goals and the qualitative values of AWS / Distributed Work Included feedback from 40 global experts Utilized online focus group and survey methodologies Final research results were compiled 1 st Qtr
19 What is your company s industry? Financial Consulting 10% 8% 5% 5% 5% 20% 17% Technology Other (please specify) Healthcare 15% 15% Government HIgher Education Retail Energy 19
20 Why did you implement distributed work? Top Drivers for Implementation Category 1. Minimize cost Economics 2. Support effective work process Productivity 3. Support collaboration/innovation Productivity 4. Maximize space utilization Economics 5. Attraction/retention (employee satisfaction) Satisfaction 6. Environmental sustainability Sustainability 7. Communicate corporate values to employees Corporate Image 8. Communicate brand Corporate Image 9. Ergonomics/health and safety Safety 20
21 Where have you implemented distributed work? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 30% 10% 15% 30% 47% 5% 10% 16% 21% 8% 8% 0% 10% 7% 15% 15% 35% 10% 15% 13% 7% 12% 33% 29% 20% 20% 13% 18% 0% 0% 0% 18% 20% 20% 13% 13% 20% 20% 27% 24% 27% 27% Europe North America Asia Australia Middle East Central/South America Africa all spaces majority of space approximately half of our space some of our space none not applicable 21
22 How many years experience with distributed work? 9% 16% 38% 37% <3 Years 3-6 Years 7-14 Years Years Average length of time = 6.8 years 10 companies have >10 years experience 22
23 How have your RSF per person targets changed over time? years ago 5 years ago 3 years ago 23
24 What are your SF/employee targets today? Conventional Workspace 130 Distributed Work SF target 24
25 What is your target employee to desk ratio? AT&T Distributed Work Conventional Workplace 25
26 Individual Workspace Types and Sizes in Square Feet Bank of America touchdown station Reservable workstation hoteling Unassigned workstation free-address Assigned workstation Phone room, focus booth, heads-down room (1-2 people) Mother's Room Prayer room, Meditation room Reservable office hoteling Unassigned office freeaddress Assigned office 26
27 Collaborative Space Types and Sizes in Square Feet General Dynamics Enclosed 1on1 Open 1on1 Enclosed small meeting Open small meeting Open game area Enclosed game room Enclosed, dedicated video conference Open XL meeting Enclosed XL meeting café 27
28 Work settings per 100 workers Assigned Space Shared Space
29 Offsite space 70% 64% 60% 50% 40% Satellite office Center 46% Satellite offices for your company use only 30% 20% 10% 25% 11% 11% 11% 4% 4% 7% 18% Telework center - shared with other companies 0% Provide in many locations Provide in selected locations May consider providing Do not provide Unlikely to consider 29
30 What are companies measuring? Seat utilization Employee satisfaction Sustainability Cost reduction 30
31 Seat utilization within distributed work settings 60.0% 56.8% 52.3% 50.0% 40.0% Conventional space averages ~45% Peak Utilization 35.8% 30.0% 20.0% 10.0% 0.0% Individual Assigned Desk/ Seat Individual Unassigned Desk/ Seat Touchdown 31
32 Average employee satisfaction 100% 90% 80% 24% 35% 70% Very satisfied 60% 50% 40% 30% 20% 10% 0% 43% 19% 14% 45% 15% 5% Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Supporting employee individual performance Supporting team performance 32
33 On Sustainability 76% of the participating companies make a strong connection between their corporation s position on sustainability and their new workplace strategy Microsoft 33
34 What s important when moving from fixed to fluid practices? THE IMPORTANCE OF CHANGE MANAGEMENT Business Centric Leadership Strong Management Support 7 7 CITED MORE THAN ONCE Intranet tools and training 4 Empower workers with choice 3 Get Strong Success Early 3 Set up Advisory Board 2 Interactive Communications 2 Address issues as they arise Determine Voice of the Customer Leverage learnings with other projects Give Choice to Business Leaders CITED ONLY ONCE
35 Fun video clips on work etiquette WHEN YOU SHOULD GET A ROOM 35
36 Fun video clips on work etiquette A LESSON IN CAMPING OUT 36
37 Fun video clips on work etiquette LEARNING TO STASH IT OR TRASH IT 37
38 What s important when moving from fixed to fluid practices? THE IMPORTANCE OF CHANGE MANAGEMENT Sprint Nextel emphasizes to associates that this is a change in where they sit, not in how much they are valued or how much they work. Lea Illa Hoover, Sprint Nextel
39 What s important when moving from fixed to fluid practices? THE IMPORTANCE OF CHANGE MANAGEMENT Our communication tools included a project website, regular newsletters, focus groups, design mock-ups, town hall meetings, tours and a pre-occupancy survey. Mindy Glover, Rio Tinto
40 Reinforcing video clips CHANGE MANAGEMENT Video from Philips
41 On Economics Item Metric Average conventional operating cost per square foot $20 Average operating cost in distributed work $21.4 (+7%) Average conventional square feet per desk 195 Average square feet per person in distributed work 130 (-33%) Target employee:desk sharing ratio in distributed work 2.3:1 Average conversion cost per square foot from conventional to distributed work $96 41
42 This is why companies pursue new workplace strategies (Savings/Cost) ( X Ten 100) Year = The Simple ROI Factor ROI = 105% Study Conclusions: Annualized ROI = 10.5% 1. Cumulative Savings 2. Less Program Costs Ten Years Cumulative Savings Implementation Costs Ten Years Operating Costs 3. Equal Simple Program Savings Simple Net Savings Discount Rate 4. Factor in the time value of money (costs and Savings) 5. Ten Year Net Present Value (NPV) of Savings Ten Year Savings Divided By x 10 yr Cost 100 = Times Equals 10 Year Return on Investment % 42
43 Get the full report for free 43
44 Also informative: Distributed Work, IFMA Research Report #31 $60 Member Price $120 for Non-Members 44
45 45 Q & A
46 46
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Administration Increase Director/Associate Director Suite 1,145 300 1,445 Director Office, Associate Director Office, Administrative Support Office, Waiting Area, Director Storage Business Office 1,740
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