NMG Benefits – Johannesburg Offices
NMG Benefits Quarter 2 Board Meeting
23rd May 2019 NMG Benefits – Johannesburg Offices Outline
1. Exec Summary
2. Centre of Gravity Study
3. Options
3.1. NMG House Randburg
3.2. Satellite Office(s)
3.3. Remote Working
4. Next Steps
2 NMG Benefits – Johannesburg Offices Exec Summary
▪ We have two long-term leases in Johannesburg, both of which expire in September 2019
▪ We currently pay ZAR10.8m pa for NMG House Randburg and ZAR4m pa for Cedar’s offices in Houghton; this works out at almost ZAR50k per employee in office space, 5.4% of total expenses and 8% of Employment Costs
▪ Extending or renewing the Cedar lease is no longer an option, so at the very least we are faced with moving the Cedar staff
▪ Our office and facilities in Randburg are sub-optimal and score very poorly on Employee Surveys
▪ We conducted a “Centre of Gravity Study” of all Johannesburg-based staff to gather key information relating to our people: Where they live, how they get to work, what their main priorities are, how much time and money they spend commuting, and so on
3 NMG Benefits – Johannesburg Offices Exec Summary, continued
▪ Although there is a concentration of employees in the West, North West and South West of Johannesburg, our employee base is far-flung and our people spend a lot of time and money getting to work
▪ There is no “silver bullet”, and our solution(s) will need to be pragmatic, and require some adaptation in management approach
▪ Our preferred recommendation is to keep our primary office at NMG House in Randburg (subject to substantial improvements and renovations funded largely by the landlord)
▪ However, we would also wish to trial a Satellite Office in Braamfontein for a particular sub-set of the employee base, and potentially one or two more Satellite Offices in other parts of the city (Centurion, Bedfordview)
4 NMG Benefits – Johannesburg Offices Exec Summary, continued
▪ In the longer term, providing employees with the ability to work remotely (from home and/or in Satellite Offices) can improve productivity and satisfaction enormously
▪ However, neither our technology nor (more importantly) our Management framework is sufficiently strong to trial this widely at the moment
▪ It should, however, be a key goal for the business going forward
5 NMG Benefits – Johannesburg Offices Outline
1. Exec Summary
2. Centre of Gravity Study
3. Options
3.1. NMG House Randburg
3.2. Satellite Office(s)
3.3. Remote Working
4. Next Steps
6 NMG Benefits – Johannesburg Offices Centre of Gravity Study
• 234 employees responded (out of a total of 319, 73%). We asked a lot of questions about their commute, their division, their priorities for an office, and so on
• Our average employee lives 30km from the office and spends 52mins getting to work (one-way)
• There are big variations (1/4 of our people spend less than 30mins commuting and live within 10km of the office… but half our staff live 30km or more away, and spend more than 45mins commuting in each direction)
• On average they spend ZAR1,800 pm (4% of gross pay) on their commute; ¾ drive to work, and the balance use a combination of Public Transport (bus, train, taxi). One person walks ☺
• Office Location was a factor for ¾ of our people in choosing NMG. However, facilities (eg proximity to restaurants, bars, shops, etc.) were much less important than practical issues eg secure parking (4.2/5), proximity to Public Transport (3.4/5), ability to get home quickly if necessary (4.4/5)
7 NMG Benefits – Johannesburg Offices Centre of Gravity Study, continued
• It’s troubling to note that our RFA employees spend the most time (60mins on average) getting to work, live the furthest from the office, and spend the most money (ZAR1,900 on average) on transport each month
• RFC employees spend the least time (45mins) getting to work
• Shortening the commute for a significant number of RFA employees would have a profound impact on their lifestyles
8 NMG Benefits – Johannesburg Offices Centre of Gravity Study, continued
▪ Randburg is the only viable option for a single Office for all staff
▪ Rosebank and Braamfontein were next “least bad” options
Randburg Braamfontein Bryanston Houghton JNB CBD Midrand Rosebank Sandton Other
Unappealing (0-3) 60 111 103 103 157 158 83 134 11
Very appealing (7-10) 114 94 78 78 50 52 84 56 63
Average 6.0 4.6 4.5 4.5 2.9 2.8 4.7 3.4 7.9
9 NMG Benefits – Johannesburg Offices Centre of Gravity Study, continued
NMG House
16
6 80 41 33
32 11
4
10 NMG Benefits – Johannesburg Offices Centre of Gravity Study, continued
Cedar RFA RFC HC HO Other Far North 16 1 9 1 2 1 2 North 80 11 18 14 11 9 17 West 6 3 1 1 1 0 0 South-West 33 7 14 4 1 5 2 Soweto 32 6 9 3 6 4 4 Central 9 2 4 0 0 2 1 South 11 2 2 2 1 2 2 Far South 4 1 1 0 2 0 0 East 41 17 14 1 4 2 3 232 50 72 26 28 25 31
Randburg 100-140 Braamfontein 40-60 Bedfordview 30-40
11 NMG Benefits – Johannesburg Offices Outline
1. Exec Summary
2. Centre of Gravity Study
3. Options
3.1. NMG House Randburg
3.2. Satellite Office(s)
3.3. Remote Working
4. Next Steps
12 NMG Benefits – Johannesburg Offices Options – NMG House Randburg
• Highest of “Most Appealing” scores, and lowest “Least Appealing” score
• It’s the only viable “single office” solution (well, Randburg… we could look for another office in the suburb… not much upside in that)
• Facilities are dated; significant investment is required (toilets, showers, meeting rooms, air- conditioning, coffee / kitchen areas, etc.)
• Landlord has indicated willingness to invest, subject to long-term lease
• Renovations could conceivably take place one floor at a time, but will be disruptive
• Disruption might be reduced if a significant satellite office is opened (eg Braamfontein, Bedfordview)
13 NMG Benefits – Johannesburg Offices Options – Satellite Office (Braamfontein)
• Second highest “Most Appealing” score (94)
• Based on postcode locations, somewhere between 40-60 people would be well-suited to working in Braamfontein
• Some 30 of these work in RFA, suggesting that a few teams could conceivably be based there
• A significant number of Cedar employees (17) live in the East (Boksburg, Edenvale, Bedfordview, etc.); it might be easier for them to move to Braamfontein rather than Randburg
• A satellite office would require some adjustments in management. Team meetings might require adaptation. Presumably heavier use of AV would be required
14 NMG Benefits – Johannesburg Offices Options – Satellite Office (Bedfordview)
• We didn’t list an Eastern location as a possibility
• The Study shows that 41 employees (mostly Cedar and RFA) live in the East
• Presumably for them a Satellite Office in eg Bedfordview would be attractive (more so than Randburg)
• Office Rents should be considerably lower in Bedfordview than Randburg
• The same comments as for Braamfontein would apply, regarding Management
15 NMG Benefits – Johannesburg Offices Options – Remote Working
• A real game changer for our people would be to allow Remote Working (eg working from home or third-party spaces – coffee shops, WeWork offices, etc.)
• At present our Systems & Processes are insufficient to measure productivity, and our Management Structures and Human Capital framework are inadequate
• We should however incorporate these concepts into our medium-term planning. We should also identify specific roles which can be piloted sooner
16 NMG Benefits – Johannesburg Offices Outline
1. Exec Summary
2. Centre of Gravity Study
3. Options
3.1. NMG House Randburg
3.2. Satellite Office(s)
3.3. Remote Working
4. Next Steps
17