Workplace Strategies to Reduce Costs and Build Value

A Guide for Commercial Real Estate and Facilities Professionals

Balancing Cost-Saving Measures with User Experience

Workplace strategists are always on the lookout for ways to improve workplace collaboration at a low cost. Designing spaces with technologies that workers can use easily and efficiently helps maximize overall square footage. The employee experience not only affects productivity and employee engagement but can also impact efforts like talent acquisition and retention.

When making real estate decisions, workplace strategists must look beyond simple balance sheets. For example, moving offices to a lower rent district may translate to immediate savings, but what if that move hindered recruitment efforts and limited the company’s ability to attract top talent? Would it be worth it? Efforts to reduce real estate costs must be carefully evaluated against the corresponding tradeoffs to avoid tripping over dollars to save pennies.

Jones Lang LaSalle (JLL), a global professional services company specializing in commercial real estate, recommends using a 3-30-300 formula to evaluate cost-reduction strategies. They suggest that there is an average order of magnitude for costs per square foot—$3 in utilities, $30 in rent, and $300 in payroll. The formula demonstrates clearly how to achieve the maximum impact from cost-saving measures. A 10 percent increase in energy efficiency translates to a $.30/sq ft cost savings. A 10 percent reduction in rent yields a $3 cost savings. However, a productivity improvement of 10 percent equates to $30/sq ft of value. Because the people part of the equation—how people in the workplace get their work done—can have the most significant impact on realized cost, improvements to the worker experience is central to any effective cost-savings plan.

In this cost-reduction and value-building strategies guide, we’ll share insights about effective cost-saving measures and strategies including:

  1. Meet Employee Expectations While Reducing Costs
  2. Base Technology Investments on Utilization Rates
  3. Identify Flexible Workspace Options that Drive Productivity
  4. Design a Healthy Environment
  5. Look to IoT for Cost Reduction and Value Building

 

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1. Meet Employee Expectations While Reducing Costs

The extent to which the workplace meets employee work expectations can determine how productive, satisfied, and engaged they are. Forty-five percent of employees report not being able to use the space they need when they need it, and workplace dissatisfaction can adversely affect productivity.

Before you can plan or design office space that meets employee expectations, you must first uncover what those needs are by employee group or persona. Expectations will be centered around the employees’ ability to work with other and to use the collaboration solutions. Here are a few ways to ensure your plans best support your users.

  1. Survey users. Ask about their work habits and preferences so you can take their answers into consideration during the design process.
  2. Involve them in the design process. Sometimes users don’t know exactly what they want because they don’t know what’s available. Letting employees see the options and the big picture view of design can help everyone get on the same page.
  3. Train them on space usage. Sometimes employees don’t realize they can use a space for other purposes, or they feel unsure about doing so. Help employees think creatively about the ways they work and use space, then they can better see what’s missing and express where there’s room for change.

Employee-focused design places the employee at the center of design choices, focusing not just on functionality but on the entire employee experience. Workers who are unhappy with their workspace may not feel valued and can find it more difficult to focus on work.

Keeping the human side in mind is the future of facilities and real estate management. One of the best ways to ensure excellent human experiences—for both employees and customers—is to stop thinking about cutting costs and think more about making good investments in space and technology that add value through employee fulfillment, engagement, and empowerment. Because, as demonstrated by JLL’s  3-30-300 formula, 10 percent greater workplace engagement creates more value than 10 percent savings on energy costs.

Read about use cases driving business leaders to consider connected workplace initiatives

2. Base Technology Investments on Utilization Rates

By accurately assessing space and technology utilization, you can determine which workspaces and meeting rooms are most used as well as how much the collaboration devices are used in those spaces. Measuring utilization rates is an key area to focus on.

To make the best space planning and technology investment decisions, collect information about:To measure space and technology utilization, companies can employ a few different methods. At some companies, managers walk around and manually count what is being used, but that’s not always efficient or accurate. Some organizations use monitoring and management platforms like AVI-SPL Symphony and Crestron Fusion, while others use a mixture of methods.

  • Who is booking which rooms
  • When they are using those spaces
  • How long they use them
  • Which devices and systems are used
  • How often and for how long are they using technologies
  • When the room is used without being booked and when it’s booked without getting used
  • How many participants were in each meeting
  • Which capabilities are available in rooms that are used versus those that aren’t
  • What user feedback was about the meetings, spaces, and technologies

This information is useful in cutting costs because you won’t pay for space you don’t use, and you won’t harm productivity by forcing employees into spaces that are too crowded, ill-equipped, or won’t meet their work needs. For example, if you find that large meeting rooms are usually booked for only two to five participants, you could replace them with much smaller huddle spaces.

See how real-time utilization data informs decisions

3. Identify Flexible Workspace Options that Drive Productivity

The definition of “flex work” can mean flexibility in location as well as in hours. For many kinds of work, you don’t need all employees in the office every day. With collaboration technologies like video conferencing and content-sharing platforms that work with mobile devices, many employees can work remotely from home or on the road.

But flex work is evolving beyond just remote work. JLL, a business consultancy specializing in real estate, defines three kinds of flexible workspaces, including virtual “places” for remote workers, locations that are not the office (coffee shops, coworking spaces, airports), and the office—only it will not be like the traditional office. The modern office will be designed to better facilitate a range of employee experiences. You’ll see less desk assignments and more flexible spaces devoted specifically to experiences like:

  • Collaboration
  • Concentration
  • Innovation
  • Socialization
  • Revitalization

Workers won’t be stuck at a desk when they need to be creative, and they can find a quiet place to think when they need to get “in the zone.” More flexible and better equipped spaces will result in more productive and engaged employees.

Employers that allow employees to work remotely or drop in for work at will can cut costs on space by providing coworking and multi-purpose spaces—like hot desks and well-equipped meeting spaces. With hot desking, employees share desks or other workspaces because they don’t need a dedicated desk since they also work from home or are on the road much of the time. The key is achieving the right ratio of dedicated desks to shared ones.

Flexible and employee-focused options save on real estate and associated costs. Less space is needed for more kinds of work, and employee-driven design ultimately engages workers while helping them feel valued and satisfied with their jobs. Improving employee retention helps companies cut down on the significant costs of hiring, training, and lost productivity.

As organizations focus more on how people prefer to work, they’re moving toward flexible solutions like semi-open areas that can expand or contract using partitions or acoustic panels. Employers can also designate rooms for miscellaneous use and provide equipment that can be easily moved from space to space as needed. Equipping spaces with a variety of technologies make them suitable for a multitude of uses.

Organizations that let employees work from home will cut down on the space they need, and they can save even more by providing in-office employees with coworking options.

learn more about coworking and flexible spaces

4. Design a Healthy Environment

Health and wellness may not be the first thing you think about when making real estate decisions, but prioritizing the physical, mental, and social health and well-being of your occupants can have long-term benefits.

Companies are designing healthy spaces to improve employee performance and productivity as well as attract and retain top talent. A healthy environment also reduces employee stress and absenteeism, which can translate into significant value creation.

Some of the ways workplace strategists can improve employee health and well-being through environmental factors include:

  • Letting in natural light. People report greater feelings of well-being when exposed to natural versus artificial light.
  • Optimizing air quality. Poor indoor air quality can lead to occupant discomfort and illness.
  • Keeping the temperature at a comfortable level. Room temperature can affect the alertness and productivity of occupants.
  • Controlling background noise and providing pleasant ambient audio. Productivity can drop as much as by two-thirds with distracting environments.
  • Giving employees control. Letting occupants have some control over the environment—temperature, air flow, lighting etc.—in their own spaces can contribute to feelings of well-being.
  • Integrating nature into the work environment. Designs that include soundscaping—using nature-inspired audio and visuals, coupled with intelligent software to mitigate distractions due to speech—create a peaceful environment where people can focus.

Other ways to improve health include using wearables to anonymously track employee health, stress levels, etc. Some companies use fitness trackers to organize fun team-building challenges like measuring the distance or steps walked in a day or other time frame.

Deloitte predicts buildings will be increasingly used to improve employee health and wellness, leading to happier, healthier workers and cost and performance benefits to employers.

Learn about healthier, happier work environments

5. Look to IoT for Cost Reduction and Value

IoT is changing the way real estate decisions are made. Intelligent buildings are yielding significant savings for companies by improving energy and operational efficiency. Smart thermostats, lighting, alarms, audiovisual equipment, and other devices can automate themselves as well as environmental conditions based on sensors and user settings. For example, if no one is in a meeting room, the control can turn the equipment off. If no one’s in the building, a smart control system can adjust the temperature and lighting for cost savings. Energy, maintenance, and management savings alone can be up to 30 percent, according to Gartner research.

These are just a few examples, but IoT has so much more potential than simple on/off and up/down automation. From tracking products to tracking employee habits in order to improve inventory and building design processes, there is no end to the possibilities of the ways IoT can improve work and reduce costs.

Beyond simple cost savings though, IoT can also increase revenue. Many of these opportunities will stem from all the data generated by IoT and by the efficiency gained from intelligent workplace environments. For example, by tracking customer habits and preferences, companies can not only improve products and services, but develop new, better ones.

Some of the cost benefits of using IoT to manage workplaces and technology include:

  • Responsive environments, guiding flex workers to available desks, and meeting solutions that self-launch when the host arrives
  • Better energy efficiency and greener practices
  • Improved systems and operations efficiency
  • Preventive maintenance ahead of costly breakdowns and interruptions
  • Higher employee productivity and better work habits
  • New revenue-generating practices, products, and services
  • Better employee health

IoT and real estate are no longer separate conversations, as they are inextricably entwined. Fortunately, IoT will provide a multitude of insights and opportunities for real estate cost savings.

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