• Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues


Cost Reduction Through Mobile Offices and Nontraditional Uses for Existing Spaces

A more efficient and somewhat nontraditional use of office space can save your company money. Are you ready to embrace the office of the future?

Nov 08
Small changes to an assembly or packaging line can mean big savings in terms of time and money. The same is true when it comes to office space. Companies that fall back on tried-and-true formulas to accommodate their client-facing or back-office workers - lease a space, fill it with employees, and give them each a standard-issue desk, phone, and computer - are systematically sending money out the door.

Research suggests that as much as 50 percent of corporate office space goes unused at any given time, yet companies continue to pay for 100 percent of it. Yesterday's "everyone in one place" approach to workspace has become outdated in a business world where some types of work can be more about what you do than where you go. While there will always be a need for fixed facilities, companies can increase the efficiency of their cost-intensive real estate footprint by creating more flexible systems that give office-based employees new options for when and where they work.

So Much Empty Space
When offices go unused, companies lose money. It's always been an inevitable cost of doing business, but technological and societal changes in recent years have made the issue more visible. With laptops, cell phones, mobile e-mail devices, and high-speed Internet available on every corner - and the 70 million-strong Millennial generation entering the work force - some workers have little need to spend time at a desk in a corporate office. In fact, research group IDC expects 75 percent of the U.S. work force to be mobile by 2011.

While the growing ranks of mobile workers have left more desks unfilled, it isn't the only cause of wasted office space. Even workers who still spend most of their time in the office building may spend hours every day away from their individual workstations. For example, a Microsoft survey of more than 38,000 people found that the average worker spends 5.6 hours per week in meetings. Furthermore, many companies routinely pay for raw square footage that sits unassigned to any workers. This happens when a company takes out a larger space than necessary with the expectation of growth, or when layoffs create a surplus of space.

Considering all the potential causes of unused space, nearly every company in any industry has room for improvement.

Cost of Office Space Waste
Looking at the factors that routinely cause desks to sit empty, the money spent on unused office space alone is enough to justify a dramatic change in workplace practices. But square footage is only part of the equation. The Total Cost of Occupancy (TCO) - the all-inclusive cost of accommodating one person at one workstation - can easily be three to four times the lease cost for the raw space.

TCO includes the lease cost, plus office furnishings, heating and air conditioning, power requirements, computers, phones, and even the human support (administrative, maintenance, and IT) required to operate a typical workspace. Every hour that space goes unoccupied, precious financial, human, and natural resources are misspent. And as the time that workers spend at their desks declines, some estimates put the nationwide toll of wasted office space in the range of $250 billion a year.

Obviously, no company can overcome the problem completely. Some space will always go unused as shifting business priorities make a moving target of workspace requirements. However, there are alternatives to the traditional relationship between workers and office space that make it easier to "rightsize" and bring more efficiency to the operating budget.

Creating a more flexible and adaptive workplace strategy begins with reducing permanence. Instead of a central office building where all employees have a space they can call their own, a more efficient approach is to create a fabric of workplace settings from which workers may choose. Several increasingly popular strategies lend themselves well to this concept.

Telework 2.0
Perhaps the most obvious response to unused office space is to take away the office altogether. Today's communications technologies make working from home a realistic option for more workers than ever before. And so-called "third places" like Internet-enabled public gathering spots, bookstores, and copy centers have become as important to the mobile professional as the office itself. With the right tools, the right type of workers can be every bit as productive as if they were in the main office, while the company can save nearly the entire cost of providing their workspace.

The idea of teleworking isn't new, but companies are beginning to approach it more proactively. Where teleworking was long viewed as an employee privilege for those with "special circumstances," it's now gaining acceptance as a cost-conscious business practice that benefits the company as much as the workers. As such, more companies are actively identifying the functions that are best suited for telework and making it a condition of the job. Moreover, they're equipping teleworkers with more than just a laptop and an Internet connection. Companies are finding ways to ensure their remote and mobile employees have the resources they need on days when the limitations of a home office come into play. Those tools may include access to drop-in business lounges, videoconferencing services, or third-party meeting rooms to host clients or connect with headquarters.

Exclusive Research