GSA Office of Governmentwide Policy

Office of Real Property Management Performance Measurement Division

Workspace Utilization and Allocation Benchmark

U.S. General Services Administration Office of Governmentwide Policy Office of Real Property Management Performance Measurement Division

Workspace Utilization and Allocation Benchmark

July 2011

Note: Effective as of July 2012, the author has updated the workspace benchmark data.

Workspace Utilization and Allocation Benchmark

Contents

Introduction...... 3 Methodology...... 7 Research Analysis...... 9 Federal Workspace Policy and Regulations...... 13 The Emerging Workspace...... 15 Workspace Survey Results...... 23 Workspace Allocation Results...... 25 Workplace Snapshots Benchmark #1: Business Services/Consulting ...... 27 Benchmark #2: Telecommunication ...... 28 Benchmark #3: Manufacturing ...... 28 Benchmark #4: Domestic Government Organization ...... 29 Benchmark #5: International Government Organization ...... 29 Benchmark #6: Academic Institution ...... 30 Benchmark #7: Diversified Manufacturer ...... 30 Benchmark #8: Media Conglomerate ...... 31 Benchmark #9: Business Services/Consulting ...... 31 Case studies: Today’s Innovative Workplace...... 32 Case Study #1: IBM Reduces Its Real Estate Footprint Through Telework...32 Case Study #2: Sabre’s Workplace Innovation...... 34 Case Study #3: Herman Miller on Space Standards and Industry Trends.....35 Featured Article: “Take my desk — please”...... 37 Acronyms...... 43

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Workspace Utilization and Allocation Benchmark

Introduction

anaging and allocating office state that “Executive agencies must workspace is a constant provide a quality workplace environment challenge for both public and that supports program operations, private organizations. This preserves the value of real property challenge exists because assets, meets the needs of the occupant M organizations have to meet agencies, and provides child care functional space demands using limited and physical fitness facilities in the resources. When determining the best workplace when adequately justified. way to forecast and allocate workspace An Executive agency must promote and support knowledge workers, today’s maximum utilization of Federal architects, designers, facilities and real workspace, consistent with mission estate professionals, and workplace requirements, to maximize its value to consultants must consider the following the Government.”2 factors: When assigning and utilizing federal • Space availability; workspace, “Executive agencies must • Energy costs; provide assignment and utilization • Operation and maintenance costs; services that will maximize the value • Ever-changing mission requirements; of Federal real property resources and • Security concerns; improve the productivity of the workers • Emergency management planning; housed therein.”3 • Alternative workplace arrangements (AWA); and With respect to the Code of Federal • The new mobile workforce. Regulations, the General Services Administration (GSA), Office of Over the past decade, the Federal Governmentwide Policy (OGP) provides government has moved away from strict additional guidance to promote hierarchical space use standards based government-wide cost-effective, flexible on pay grade or associate position. and quality workspace. This Workspace The Federal government now follows Utilization and Allocation Benchmark the Code of Federal Regulation’s publication presents a concise synopsis (CFR) recommendations for space of workspace research findings and planning based on organizational practical recommendations. OGP’s needs1. Current workspace regulations

1 GPO Access, Code of Federal Regulations Main Page: http://www.gpoaccess.gov/cfr/index.html 2 “Federal Management Regulation: Assignment and Utilization of Space,” Title 40 Code of Federal Regulations, Part 102-79.10 http://ecfr.gpoaccess.gov/cgi/t/text/text- idx?c=ecfr&tpl=/ecfrbrowse/Title41/41cfr102-79_main_02.tpl. 3 3 “Federal Management Regulation: Assignment and Utilization of Space,” Title 40 Code of Federal Regulations, Part 102-79.15 http://ecfr.gpoaccess.gov/cgi/t/text/text- idx?c=ecfr&tpl=/ecfrbrowse/Title41/41cfr102-79_main_02.tpl. Workspace Utilization and Allocation Benchmark

objective is to present this information In addition to providing useful to the entire Federal community with recommendations, this 2011 Workspace the hope that it leads to more informed Utilization and Allocation Benchmark decision-making and better overall publication includes the GSA Office utilization and allocation of office of Governmentwide Policy workspace workspace. Many real estate managers benchmark and a feature article on and facility managers are interested space planning methods used by an in developing similar programs or internationally-known private sector firm. extending existing programs in support This research review also includes ten of real estate cost savings goals, arbitrarily selected benchmark studies workspace consolidation plans and and three case studies. The case studies GSA’s Zero Environmental Footprint explain how these organizations—which (ZEF) initiatives. This publication shares range from information technology firms challenges and best practices with to real estate corporations—utilize space real estate professionals and facility planning to get the most out of their managers across all industries. workplaces.

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Workspace Utilization and Allocation Benchmark

Methodology

he Federal government real estate services, media services and is a collection of diverse manufacturing. agencies with differing In the summer of 2010, through the missions. Therefore, the task winter of 2011, GSA conducted of developing or confirming a workspace utilization survey, a government-wide standard T analyzed data results, conducted for office workspace use per person Internet research, and held telephone is a significant challenge and not the interviews with several public and premise of this benchmark publication. private organizations. GSA attended GSA presents this information to the several leading industry workplace entire Federal community with the conferences to identify and gain insight hope that it leads to a more effective, into emerging contemporary trends, efficient workspace environment that practices, and standards in workspace accommodates individual work styles utilization and allocation. and alternative workplace strategies to reduce office workspace costs. GSA collected data to produce three case studies and ten workplace GSA developed this comprehensive benchmarks, which explain each study with our real property colleagues organization’s workplace space usage in to promote the most efficient and greater detail. optimal use of office workspace for both Federal agencies and the private sector. GSA also reviewed numerous published sources and other publicly available A wide variety of public and private information—including industry best sector organizations are represented practice publications, government- in this study, including Federal wide policy bulletins, press releases, agencies, international sector and industry surveys—to examine new organizations, financial services, government and private sector space information technology, technology allocation trends. consulting, management consulting,

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Workspace Utilization and Allocation Benchmark

Research Analysis

“Our customers are struggling with higher communication tools. Mobile phones, real estate costs, so they’re looking for smart phones, BlackBerry devices and ways to reduce the amount of gross square wireless networking have revolutionized footage allotted to each person.” the workplace. As a result, many Federal agencies and private ~ Cheri Bromberg, Steelcase application design specialist organizations have turned to alternative work environments to reduce workspace This section outlines findings costs and optimize physical workspace. of workspace use practices and Alternative work environments trends based on GSA’s research including telework, hoteling stations and contact with professional trade and desk sharing, are a major trend organizations, private sector firms, in today’s real estate marketplace, and Federal agencies, as well as and offer organizations flexibility and national, international, state and local optimal workspace usage. Additionally, governments. organizations have noted an increase GSA found that the emphasis on of quantitative benefits with the use of workplace space use trends has alternative work environments such as changed tremendously since our initial increased productivity and enhanced 1997 Office Space Use Review: Current associate morale. Practices and Emerging Trends and Organizations apply different space our 2002 Space Use Update. Federal use measurements, which presented a agencies and private challenge when comparing workplace The workspace sector organizations space use for the many participating benchmark average have been forced to organizations. For example, some in this study is constantly reevaluate organizations measure workspace in based primarily on their current workspace Rentable Square Feet (RSF), or the a square foot per usage. Workplaces gross square footage minus vertical person assessment. are now influenced by penetrations (such as stairwells and an improving mobile elevator pipe shafts). Others measure workforce and greater workspace by Usable Square Feet use of instantaneous wireless (USF), or the sum of retail areas, office

9 space, and common areas. Neither RSF workspace. When renovation of GSA’s nor USF standards simply measure an Washington headquarters is completed associate’s office or cubicle area, but in 2013, the building will accomodate also include a portion of shared space— 4,500 workers — almost 2,000 more such as conference rooms and hall than a year ago — because of shared space—for each associate in a space work spaces and telecommuting. use measurement. GSA Headquarter office will average approximately 80 USF (92 RSF) per Participating organizations also differed person of workspace. in their space per person reporting method. Some organizations reported a space per person standard based on workers’ positions or functions, while Research Findings others use a uniform, organization- 1. Many public and private wide space per person designation. organizations focus on Some organizations did not identify organizational mission, job function, their measurement method, so GSA operation and maintenance costs, tried to resolve the reporting issues by security, emergency management working with participating organizations planning, alternative work to generate and standardize comparable environment, wireless technology, data. In most cases, GSA adjusted and workspace availability when percentages between RSF and USF, planning and allocating workspace. as agreed upon by the organization The majority of the 2011 participating representative. organizations use a space per person measure as the key performance GSA’s headquarters Based on public sector metric for square footage allocation. data information of office serve as a model 2. No significant differences between workspace use trends, by averaging government and private workspace organizations were use trends were found. Private approximately allocating a prevailing 80 USF (92 sector survey respondents reported standard workspace an average space per person of 200 RSF) per person average of 190 Usable USF (230 RSF), with a median of 193 of collaborative Square Feet (218 Rentable USF (222 RSF) as compared to the workspace. Square Feet) as the Federal benchmark of 190 USF (218 optimum workspace RSF). The greater space per person per person. Organizations can most average in the private sector was efficiently and effectively minimize their due to the nature of work performed square foot usage by implementing by participating private sector innovative workspace strategy, such as organizations. In cases where a hoteling and teleworking. private sector organization used less space than a Federal organization, GSA for example has been knocking telework and other flexible work down walls, even dismantling cubicles arrangements were responsible for to create a free-flowing layout that reducing the organization’s overall encourages collaboration and reduces workspace needs.

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3. Facility managers have focused arrangements as essential and on ways to use workspace more effective ways to protect an efficiently as a means to reduce organization’s critical data, especially overall space use costs by reducing in times of disaster. The threat of the amount of space occupied. The terror attacks and natural disasters initial wave of reductions in occupied draws a great deal of attention to space focused on developing more the need for continuity of operations efficient design standards. As a (COOP) strategies that include both result of widespread application, the mobile work and telework. 6. In typical office standard has declined calendar year 2009, 113,946 Federal since the early 2000s from around 250 associates teleworked which was square feet per workstation to around an increase of 11,046 associates as 190 square feet or less, a substantial compared to calendar year 2008. reduction. The percentage of total teleworking associates increased from 5.24 4. Facility managers have successfully percent in 2008 to 5.72 percent increased the number of associates in 20094. In 2009, the number of per workspace by focusing intently associates who telework three or on alternative workplace strategies. more days per week increased from New wireless technology has helped 13,365 to 18,716 associates. Increasing the workforce become more mobile. the strategic use of telework is a high Organizations seek ways to reduce priority for President Obama and workspace allocation per person Congress, as evidenced by passage in order to reduce operation and of the Telework Enhancement Act of maintenance costs, and to improve 2010. The President and Congress associate morale by limiting the need have encouraged Federal agencies for a daily commute. to expand their use of telework to 5. Many facility managers now reduce their real estate footprint and recognize wireless communication real estate costs. advances in alternative work

4 United States Office of Personnel Management: Status of Telework in the Federal Government – Report to Congress, 2010. 11

Workspace Utilization and Allocation Benchmark

Federal Workspace Policy And Regulations

s an industry leader in the GSA and the Office of Real Property construction and management Management will assist other federal of office workspace, GSA’s agencies in identifying workplace space management policies strategies that will reduce their real and regulations demonstrate estate footprint without sacrificing A the agency’s leadership in productivity. addressing workplace quality issues that influence the effectiveness and productivity of the Federal workforce. GSA Public Buildings, Property, and Works The provisions of Chapter 33 of Subtitle Presidential Memorandum -- II – Public Buildings and Works of Title Disposing of Unneeded Federal 40 of the United States Code authorize Real Estate the Administrator of General Services In June 2010, President Barack Obama to construct, repair, maintain, alter, and issued a memorandum directing operate United States courthouses and federal agencies to generate $3 billion other public buildings of the Federal in cost savings by 2012 through space Government. In addition, 40 U.S.C. § 585 consolidation and the elimination of provides authority for the Administrator unneeded real property while moving of General Services to lease privately toward a clean energy economy. GSA owned space for Federal use. The has taken the leadership role in achieving Administrator has delegated these the President’s objective. GSA is authorities to the Commissioner of the developing policies and procedures Public Buildings Service (PBS). All for this new workplace strategy and is space occupied by GSA associates, implementing systems to measure the whether leased or government-owned, is actual use of real property. Under this acquired through PBS. Presidential memorandum, GSA will initiate new workplace strategy to assist agencies to increase the utilization of current facilities, improve space planning methods when sizing future facilities, and divest of unneeded property.

13 Assignment and Utilization of to maximize its government value. In Workspace addition, executive agencies must promote the optimum use of space The most recent amendment to the for each assignment at the minimum Code of Federal Regulations, Title cost to the government. Executive 41, Section 102-79, Assignment agencies must also assign space based and Utilization of Space, addresses on mission requirements and provide space allocation—specifically space quality workspace that is delivered and assignment and utilization—within the occupied in a timely manner. Federal government. Public Law 106-346 Section 349 states The amendment states that executive that “each executive agency shall agencies must provide a quality establish a policy under which eligible workplace environment that supports associates of the agency may participate program operations, preserves the in telecommuting to the maximum extent value of real property assets, meets the possible without diminished associate needs of tenant agencies, and provides performance.” In response, GSA and childcare and physical fitness facilities the Office of Personnel Management in the workplace when adequately (OPM) have partnered as lead agencies justified. An executive agency must to facilitate full compliance with the law. also promote maximum workspace—

consistent with mission requirements—

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The Emerging Workplace

“Companies aren’t just slashing real estate GSA responded to these changes footprints. They’re looking for creative ways in a special way when it launched to use the space they have and shifting some the WorkPlace 20·20 research and work to home offices, third places, satellite development program. The focus of offices and other spaces.” this effort was to help agencies realign their work settings to support teams ~ Bud Klipa, General Manager, Steelcase effectively at a time when organizational structures, work styles, and technology As today’s organizations face were evolving rapidly. Now the time has unprecedented challenges, the current come for evaluation. How have those practice of using alternative workplace projects performed? What lessons arrangements can benefit organizations have been learned? To in a variety of ways, including real estate answer these questions, “Mobility is a fact cost savings, improved continuity of GSA commissioned an of life – how most operations after a disaster, and flexible evaluation study, The people work today. work arrangements that improve New Federal Workplace: A Federal workers associate satisfaction and productivity. Report on the Performance are no exception. Telework, hoteling, and desk sharing are of Six WorkPlace 20·20 Mobility helps a few of the alternative office solutions Projects. federal agencies that may reduce both office workspace The results of WorkPlace use real estate demand and associated workspace 20·20 Projects Evaluation more effectively, costs. Study led to GSA’s saving money and recommendation to take reducing greenhouse an integrated approach gas emissions.” to designing Federal The New Federal Workplace ~ Robert A. Peck, workplaces. GSA’s Commissioner, GSA Public There have been recent dramatic recommendation means Buildings Service changes in technology, business moving beyond the basic practices, and the demographic profile square foot per person calculation of the workforce. Team work has and integrating spatial, behavioral, grown in importance, computer work and technical factors in workspace takes precedence over paperwork, and design and space allocation. This increased local mobility is now standard integrated approach leads to an effective practice rather than the exception. workspace that balances the space

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needs of the occupying organization, and supports both collaboration and Footprints Shrink, AWS Grows individual work. Space allocation should reflect the impact of mobility A survey of corporate real estate and the need for interactions ranging professionals just completed for Steelcase by CoreNet Global shows 63% expect their from informal socializing to formal, company’s real estate portfolio to contract scheduled meetings. As summarized this year. Only 12% expect it to grow, while in this original study, design workplace 25% say it will remain the same. strategies are integral components Meanwhile, more than two-thirds of survey respondents (69%) say they have which include designing space for a implemented alternative work strategies mix of activities, engaging occupants (AWS) in the past year, with 73% saying the in the design process, and designing reason was to reduce real estate. Strategies they’re using include: workplaces to support technology and how people work today.5 • Home Offices on a fulltime or part-time basis (78%) • Hoteling or free address work spaces (74%) Leveraging Mobility • Mobile Work at multiple spaces (69%) • Full-time Telecommuting from Another key factor affecting today’s home (57%) workplace is mobility. Due to advances • Satellite Offices (27%) in mobile and networking technologies, The average net usable square feet per sustainability concerns, and changing employee ranges broadly from one company to the next. However, survey findings show workforce demographics, many that 58% of companies allocate 200 square associates are working with high feet or less per employee and 25% allocate degrees of mobility, leading to low 150 or less. actual utilization of physical office Square feet per employee Less than 75 -- 3% workspace. Associates are constantly 75-100 -- 4% on the go - working at home, regional 100-125 -- 7% offices, or with Federal partners located 125-150 -- 11% 150-175 -- 17% across town or across the globe. In a 175-200 -- 17% recent study of public and private sector 200-225 -- 23% organizations conducted by GSA’s More than 250 -- 19% Public Buildings Service (PBS) Applied The survey of 180 CoreNet members was Research Program, associates are conducted during April 2009. The majority of respondents are based in North America working through many different means. (79%) with 9% in Europe, Middle East Conducting head-down work at one’s and Africa, 7% in Asia-Pacific, and 3% in desk is no longer the primary way of Australia and New Zealand.

working. There has been a significant Source: CoreNet Global, “Reducing the Portfolio and shift toward a more mobile workforce. Maximizing the Use of Existing Space” (April 2009). This swing impacts the office workplace www.steelcase.com/na/files/.../Full%20version%20of%20 and the overall office workspace the%20story.pdf. strategy.

5 For more information on this workplace resource, please contact Rob Obenreder of GSA’s Office of Applied Science at [email protected]. 16 Workspace Utilization and Allocation Benchmark

As stated in GSA’s research paper these drivers provide key considerations entitled, Leveraging Mobility, Managing for the implementation and expansion of Place: How Changing Work Styles Impact a mobility program.6 Real Estate and the Workplace, individual head down work is performed in more ways, locations, and schedules than Telework ever before. Telework and other mobile work patterns are gaining momentum in “Work is what you do, both the public and private sector. It is not where you do it.” clear that high-level Federal mandates, widespread trends in the private sector, ~ President Barack Obama and mobile work will continue to grow. The larger the mobile workforce In today’s economy, many organizations the more there will be underutilized are forced to downsize staff and reduce office workspace. Studies show that or eliminate real property requirements the average utilization for workspace wherever possible. This can lead to in the U.S. and Europe between the associates having to give up their hours of 8:00 a.m. and 5:00 p.m. is 35 to office workspace and work virtually – or 50 percent; at any given time over half telework. of all workspaces are not being used. This presents the organization with the Telework, sometimes called opportunity to eliminate underutilized telecommuting or flexiplace, is an workspace to reduce cost or to grow innovative business solution that its associate base without adding to enables associates to work productively facilities. away from the traditional office setting. Broadly speaking, anyone who works at Real estate is the second largest home, at a client’s office, in a satellite expense for most organizations, and office, telework center, or on the facility managers can not afford to road, is teleworking. In fact, modern waste space. Indeed, every organization technological advances have made has a vested interest in optimizing the it easier to work anytime and in any efficiency of its existing space and place. More and more organizations increasing the return on its real estate around the world are using this tool investment. Mobile work can lead to to increase productivity, recruit new enormous savings in real estate costs, associates, lower staff turnover rate, reduction of greenhouse gas emissions, save on overhead costs, respond to and improvement of work-life balance. emergency situations, reduce traffic Beginning with the current state of congestion, and improve their staff’s mobility in the Federal government work-life balance. The WorldatWork and the private sector, the Leveraging Telework Trendlines 2009, created using Mobility paper examines mobility data from The Dieringer Research through the lenses of business, people, Group Inc., indicates that the number space, and environment. Together, of teleworkers who work at least one day

6 For more information on this workplace resource, please contact Patricia Cheng of GSA’s Office of Applied Research at [email protected]. 17 Workspace Utilization and Allocation Benchmark

per month from home or another remote as home-based with occasional visits location increased from approximately to Raleigh. Over 200 qualified applicants responded. 12.4 million in 2006 to 17.2 million in 2008. The increase in the number of • Reduced turnover: Because Telework is regarded as an attractive work option; telecommuters represents a two-year associates are less willing to explore increase of 39 percent, and an increase work elsewhere. After implementing its of 74 percent since 2005. In 2005, the Telework Program, Philadelphia-based number of associates who worked from Cigna, a large health insurance provider, experienced a 30 percent decrease in home or another remote location at least turnover. In fact, research at Eli Lilly and one day per month was approximately Company shows that associates who 9.9 million. telework are significantly more satisfied with their direct supervisors, a key factor This trend toward more associates in an associates’ intention to remain with telecommuting is likely due to a their organizations. combination of factors, including: • Facility cost avoidance • Productivity gains Telework Reduces • Government mandates to increase Real Estate Costs telework • The proliferation of high-speed and Telework not only enables associate wireless internet access flexibility, it has also helped many • Concern over rising threat levels organizations to cut costs by saving • Rising fuel and commuting costs workspace. Articles drawn from material • Telework’s strategic value published by the Canadian Telework • The trend by associates to embrace Association cited substantial savings work-life balance concepts. through teleworking at several major corporations: • Cisco: Cisco associates telework two days per week and report higher Other Telework benefits: productivity and improved timeliness • Reduced absenteeism: Teleworkers during telework, which amounts to can work from home to avoid dangerous annual savings of $277 million. Cisco’s weather and traffic conditions. They report indicates that 91 percent of their can also continue to work at home with associates state that telecommuting illness or another ailment that may have is somewhat or very important to their kept them away from the office to avoid overall satisfaction. Cisco teleworkers transmitting disease to co-workers. prevented approximately 47,320 metric According to the figures from the tons of greenhouse gas emissions from National Center of Health Statistics, being released into the environment American workers miss 20 million due to avoided travel. Associates report workdays a year due to colds and 70 a fuel cost savings of $10.3 million per million workdays because of flu. year.7 • Improved recruiting: Telework • Sun Microsystems: Nearly 19,000 Sun enlarges the pool of available talent. The Microsystems associates; more than 56 State of North Carolina had difficulty percent of Sun’s workforce participate filling their Raleigh-based vacancies in the company’s “iWork” Program and until they re-advertised these positions work away from the office at least two

7 Marketwire, “Cisco Study Finds Telecommuting Significantly Increases Employee Productivity, Work-Life Flexibility and Job Satisfaction” (June 26, 2009). http://www. marketwire.com/press-release/Cisco-Study-Finds-Telecommuting-Significantly-Increases-Employee-Productivity-Work-Life-NASDAQ-CSCO-1009622.htm. 18 Workspace Utilization and Allocation Benchmark

days per week. Sun’s “iWork” Program IBM has yielded an annual savings of $86.7 million related to reduced real estate and About 25 percent of IBM’s 320,000 administrative expenses. worldwide workers telecommute from • AT&T: AT&T reports that 90 percent home offices, saving $700 million in real of its managers participate in the estate costs.9 teleworking program on some level. The company reports annual savings of $15 million in real estate costs and estimates U.S. Patent and Trademark an annual $150 million increase in Office productive hours worked. Even without telework, many of The telework and alternative work today’s knowledge workers and their arrangements programs at the Patent managers spend more than half their and Trademark Office (PTO) have time away from their offices because of travel, meetings, illness, flexible enabled PTO to relinquish about three work arrangements, etc. As the use of floors, or 47,000 square feet of office telework increases, and with average workspace. The PTO allows lawyers to teleworkers spending two or three days reserve workspace in advance, which per week away from the regular office, the resulting empty office workspace can allows roughly five workers to share one easily be used for desk sharing, hoteling, office. The PTO expects to save roughly or other office workspace strategies. $1.5 million annually in office rental costs as a result.10

Reducing or Nortel Networks Eliminating Workspace Many organizations have used Of Nortel’s 13,000 teleworkers, 4,000 alternative workspace arrangements no longer need dedicated office to reduce or eliminate their office workspace in a Nortel building. Overall, workspace footprint without sacrificing telecommuting allows the company to productivity. save $20 million dollars a year on real estate costs — the equivalent of two 20-story office buildings of 40,000 square AT&T feet per floor.11 AT&T reported a savings of $3,000 per office, totaling approximately $550 million per year, by eliminating Hoteling and Desk Sharing or consolidating office workspace associates no longer needed.8 Investing in telework and mobile office capabilities is only one component of an office workspace efficiency plan. With teleworkers spending two, three, or in some instances four days per

8 Marketwire, “Cisco Study Finds Telecommuting Significantly Increases Employee Productivity, Work-Life Flexibility and Job Satisfaction” (June 26, 2009). http://www. marketwire.com/press-release/Cisco-Study-Finds-Telecommuting-Significantly-Increases-Employee-Productivity-Work-Life-NASDAQ-CSCO-1009622.htm. 9 Canadian Telework Association/InnoVisions Canada: “Office Space and Innovative Office Strategies” http://www.ivc.ca/officing/index.html. 10 Government Executive, “Agency sees gains from telework initiative” (April 15, 2003). http://www.govexec.com/dailyfed/0403/041503td2.htm. 11 Canadian Telework Association/InnoVisions Canada: “Office Space and Innovative Office Strategies” http://www.ivc.ca/officing/index.html.

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week away from their permanent office, organization located in New York City many organizations are also offering has 334 workspaces in a facility made up their associates a hoteling option. of 108 “permanently assigned” spaces Hoteling allows associates who already and 226 shared workspaces. There are telework to reserve office workspace 550 people who work “from” that office. on an as needed So, the ratio for the shared space is The cost of basis without being 2.4 associate to each workspace. This accommodating permanently assigned to organization measured the actual the average Federal a workstation. Hoteling utilization of the shared workspace and associate typically is normally reserved found that the workspaces were utilized runs $10,000 - for associates who do only 37 percent of the time. (Of the 226 $15,000 annually not have an assigned shared workspaces only 86 were in per person. personal workspace, or use at any given time.) If they were to Eliminating 100 those who are willing eliminate the 142 “vacant” spaces, they workspaces can save to relinquish their could achieve a ratio of more than 5 assigned workspace. associates to every shared workspace. an organization This alternative (Even counting the assigned spaces the over $1M a year. workspace strategy can ratio would be nearly 3 associates to ~GSA Cost Per Person Model also eliminate the need every workspace.) And, they could save for additional office nearly $1.5 million per year by shedding workspace and may save the unused space. the organization millions of dollars in In another example, associates in the real estate costs. Department of the Treasury’s Inspector In a traditional work environment General for Tax Administration there is a 1-to-1 ratio of associates (TIGTA) office formed a cross- to workspaces. With a hoteling/desk functional team which focused on two sharing strategy there is at least an “n”- goals: First, expand TIGTA’s current to-1 ratio of associates to workspaces. teleworking program. Second, reduce The higher the value of “n”, the more workspace in offices that have a high effective the workspace program will concentration of associates who be with the prospect of yielding better telework more than two days per week. workspace performance. With no loss TIGTA’s solution was to offer a hoteling in associate productivity, it stands to program which allowed TIGTA to reason that a 2:1 associate to workplace reallocate workspace and accommodate ratio is twice as efficient as a 1:1 ratio. a greater number of associates in a How high the ratio goes is defined by smaller amount of workspace, ultimately the nature of the organization, but from reducing rent expenses by $100,000 GSA’s research, ratios of 5:1 to 7:1 are annually. Under TIGTA’s hoteling not uncommon. program, associates are no longer As an actual example: A high-tech assigned to a specific workspace.

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Instead, associates make a reservation real estate savings. Unfortunately, the for the type of workspace they require technology of the day did not support while in the office. TIGTA assigned a remote associates, and their productivity reservation number to each work area declined. Today, however the shoe is and work areas were then reconfigured on the other foot. The hoteling/desk to support particular work tasks. sharing workplace is not the impetus for change; rather, it is the result of change As you recall, in the 1990s, hoteling/desk in the form of new technology, increased sharing was a concept that failed. Many collaboration, real estate realities, organizations pushed hoteling/desk government initiatives, and sustainable sharing onto their associates because design and practices, among others. they viewed it as a way to realize huge

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Workspace Utilization and Allocation Benchmark

Workplace Survey Results

n June 2010 through January Netherlands, while the remaining 12 2011, GSA conducted telephone percent of respondents did not indicate interviews and e-mail surveys the location of the organization. with several public, private and Of the 75 survey respondents, 35 international organizations to percent were government organizations, develop workspace benchmarks. I while 55 percent were private industry GSA conducted a Workplace Utilization organizations. and Allocation Survey to explore • Of the 75 total respondent organizations, workspace usage and allocation in the approximately 42 percent reported federal government and private sector. having full-time teleworkers who are not This exploratory survey received 75 total provided office workspace. responses from both government and private industry survey participants. Approximately 79 percent of responses Combined Respondents came from organizations in the United States; three percent from Japan; Figure 1 shows a snapshot of all three percent from Canada; 1.5 percent respondent organizations. from Iceland; and 1.5 percent from The • Approximately 76 percent of the respondent organizations provide

Figure 1. All Respondent Organizations

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alternative workspace arrangements • Telework centers (8%) (AWA). Reported AWA strategies • Desk sharing (12%) include: • Approximately 15 percent of respondent • Telework (70%) government organizations reported • Hoteling (30%) having full-time teleworkers who are not provided office workspace, as compared • Virtual office (19%) to 59 percent of private industry • Telework centers (12%) organizations that reported having full- time teleworkers who are not provided • Desk sharing (27%) office workspace. • Hot desking (18%) • Approximately 21 percent of the respondent organizations do not provide AWA. Private Industry Organizations • Approximately 3 percent of the • More than 75 percent of the respondent respondent organizations did not private industry organizations provide indicate AWA status. AWA. AWA strategies reported by private industry organizations include: • Telework (68%) Government Organizations • Hoteling (41%) • Approximately 76 percent of the • Virtual office (32%) respondent government organizations • Telework centers (15%) provide AWA. AWA strategies reported by government organizations include: • Desk sharing (39%) • Telework (77%) • Hot desking (29%) • Hoteling (4%)

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Workplace Allocation Results

n the 2000s, facility mangers in Our findings indicate that there are both the Federal government and numerous other contributing factors at private sector typically thought play in the push to make the allocation they needed 200 to 400 square feet of the workspace smaller and more per person to build an effective communal. Many responders are I office workspace. Based on GSA emphasizing teamwork, and the new research, today’s prevailing standard mobile workforces that are accustomed workspace average is a little more than to working anywhere but at a desk are 190 USF square feet per person, and turning up their noses at the hierarchical the space allocation could hit a mere 60 formality of the traditional workplace. square feet in the next 5 years. In addition, familiar technologies such as laptop computers, smart phones As a continuous stream of GSA and videoconferencing are finally survey results and extensive research beginning to affect the office workplace. findings shows us, organizations have Much like GSA’s Central Office, the been gradually dialing back on office new workplace is designed to squeeze workspace allocation and grandness for together workstations while setting years. As trends in today’s workplace aside a few rooms where associates can environment, such as telework and desk conduct meetings and rooms to have sharing offer organizations flexibility and private telephone conversations. Ideally, optimal workspace usage. However the GSA’s design creates a workplace that general slowdown in economic activity is more open, collaborative, and efficient has accelerated the trend as sobered while utilizing fewer square feet per facility mangers are forced to let go of person. their old workspace and try new ways to use less space, increase operation efficiency, and reduce overall workspace costs.

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Figure 2. Typical Workspace Allocation

Position USF Configuratiuon

Executive 300 Private Office

Director 250 Private Office

Manager 200 Cubicle

Supervisor 120 Cubicle

Technical 80 Cubicle

Support Staff 80 Cubicle

Clerical 64 Cubicle

Calculating how much workspace an The participating responders organization needs is not an exact reported that workspace allocation science. The estimates provided is still somewhat dependent upon an in Figure 2 are prevailing standard associate’s position in the organization. workspace averages for an atypical However, most responders reported allocation per staff position which we that their prevailing standard average received from our research partners. workspace is between 175 and 200 These estimates can be individually square feet per person. The greatest adjusted upward to provide a more amount of workspace at the executive spacious workspace or can be adjusted levels (300 USF per person) and the downward to provide a more efficient least amount of workspace at the use of office workspace. support staff levels (64 USF per person).

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Workplace Snapshots

SA arbitrarily selected Two of the organizations focus on and benchmarked ten manufacturing, two on business organizations to present a services, one is a media conglomerate, snapshot of the data received one is telecommunications and two are from our workplace survey. business services and consulting. Support space, circulation, G Participating benchmark organizations collaborative space, amenities, storage, also include – one domestic government and other special spaces are all included organization, one international in the prevailing standard workspace per government organization, one County staff position average. Government organization and one Participating organizations include Academic Institution. six private industry organizations.

BENCHMARK #1: BUSINESS SERVICES/CONSULTING This small, award-winning architectural design firm focuses on sustainable design. The firm was surveyed at its studio location, which serves as its only corporate building.

Position USF Configuratiuon

Executive 40 Shared Workspace

Director 40 Shared Workspace

Manager 40 Shared Workspace

Supervisor 40 Shared Workspace

Technical 40 Shared Workspace

Support Staff 40 Shared Workspace

The firm reported that irrespective of the associate position, each associate works in the same size shared workspace as all other associates. Therefore, from executive positions to support staff positions, each associate works in a shared workspace configuration of 40 USF per person. The firm does not offer alternative work arrangements for its associates.

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BENCHMARK #2: TELECOMMUNICATION As a Corporate Real Estate (CRE) division for one of the world’s most well-known and largest communications companies, this respondent CRE division focuses on strategic planning, retail demographics and site selections, project management, facility and property management, floor space planning, building security and real estate budget administration.

Position USF Configuratiuon

Executive 225 Private Office

Director 150 Private Office

Manager 90 Cubicle

Supervisor 65 Cubicle

Technical 65 Cubicle

Support Staff 65 Cubicle

The CRE division reported that workspace allocation is dependent upon an associate’s position in the company. The division allocates the greatest amount of workspace at the executive level (225 USF per person) and the least amount of workspace at the managerial, technical, and support staff levels (65 USF per person). The CRE division offers alternative workplace arrangements in the form of telework and telework centers.

BENCHMARK #3: MANUFACTURING This participant is the CRE division for a global corporation that focuses on the design, production, and support of communications and aviation electronics for commercial and government clients.

Position USF Configuratiuon

Executive 380 Private Office

Director 200 Private Office

Manager 120 Private Office

Supervisor 120 Private Office

Technical 120 Private Office

Support Staff 48 Cubicle

Junior Support Staff 48 Cubicle

Workspace allocation depends on an associate’s position in the company, as those at higher-level positions receive more space. Executives work within the greatest amount of space (380 USF per person), while managers, supervisors, and technicians all receive the same amount of working space at 120 USF per person. This CRE division offers telework and reported that a small percentage of its associates function as full-time teleworkers.

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BENCHMARK #4: DOMESTIC GOVERNMENT ORGANIZATION This participant acts as a security division within the headquarters of a U.S. government agency. The division reported that workspace allocation depends on an associate’s position in the division, since those at higher-level positions receive more space.

Position USF Configuratiuon

Executive 400 Private Office

Director 300 Private Office

Manager 200 Private Office

Supervisor 120 Private Office

Technical 120 Private Office

Support Staff 80 Cubicle

Clerical 48 Cubicle

The majority of associates work in private offices. The security division reported that AWA is offered in the form of telework and working from telework centers.

BENCHMARK #5: INTERNATIONAL GOVERNMENT ORGANIZATION This facilities management division operates within an international government agency focusing on public health. Workspace allocation depends on an associate’s position in the organization, as those at higher-level positions receive more space.

Position USF Configuratiuon

Executive 105 Private Office

Director 75 Private Office

Manager 60 Private Office

Supervisor 52 Cubicle

Technical 52 Cubicle

Support Staff 52 Cubicle

This international government agency does not offer alternative work arrangements to its associates.

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BENCHMARK #6: ACADEMIC INSTITUTION This participant acts as an academic institution on a significant campus setting. Workplace benchmark data is similar to three other data sources from similar sized Midwest academic campuses.

Position USF Configuratiuon

President 400 Private Office

Vice President 300 Private Office

Dean 240 Private Office

Department Chair 160 Private Office

Administrative Manager 100-160 Shared Office or Cubicle Support Staff 64-100 Shared Office or Cubicle Student Staff 30-64 Shared Office or Cubicle The square footage ranges are provided to accommodate the varying programmatic needs of these positions across the University. The institution reported that an associate may be assigned an office on the upper end of the range to accommodate frequent meetings with multiple individuals.

BENCHMARK #7: DIVERSIFIED MANUFACTURER This Fortune 200 manufacturing firm conducts business across the aerospace and information technology solutions industries. The firm was surveyed on its corporate headquarters space, which is comprised entirely of operations staff. At headquarters, workspace allocation is dependent upon an associate’s position in the company.

Position USF Configuratiuon

Executive/Senior Vice President 400 Private Office

Vice President 300 Private Office

Director 225 Private Office

Manager 150 Private Office

Support Staff 56 Cubicle

According to senior management, the average USF per associate at the manager and support staff in most divisions are very low for two reasons: (1) management supports the use of teleworking and desk sharing by associates; and (2) the flat organizational model of this firm dictates that there is less need for the larger offices.

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BENCHMARK #8: MEDIA CONGLOMERATE This Fortune 100 media conglomerate works with a wide variety of media ranging from television to the internet. Workspace allocation depends on an associate’s position in the company; those at higher-level positions receive more workspace.

Position USF Configuratiuon

Senior Executives 225 Office

Executives 150 Office

Managers 64 Cubicle

Staff 64 Cubicle

Three subcategories exist within the senior executive and executive levels; each subcategory has the same allotment workspace, but different interior finishes and furniture packages. Although the office size for the managers and staff is the same (64 USF), managers and staff receive different furniture packages.

BENCHMARK #9: BUSINESS SERVICES/CONSULTING This leading management consulting firm provides strategic and technical solutions to both commercial and government clients. Workspace allocation depends on an associate’s position in the company; those at higher-level positions receive more space.

Position USF Configuratiuon Office & Senior Vice President 400 Conference Space Vice President 280 Office

Principal/Senior Associate 140 Office

Associate & below 70 Shared Office

The firm estimates that 35 percent of its workforce teleworks on a consistent basis, but teleworking does not save space costs since offices are still guaranteed to all associates – even those dedicated to a client site. Although the office sizes for the principals and senior associates are the same (140 USF), staff at the two positions receive different furniture packages. Vice presidents and senior vice presidents travel frequently, so the firm uses their offices as conference space when they are away.

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Case Studies: Today’s Innovative Workplace

n today’s constantly changing pilot a workable solution. workplace, organizations must The office first developed a cross- find ways to remain competitive functional research team of marketing, and to keep up with rapid finance, technology, human capital, technological advances and and real estate specialists, as well as developments in business I IBM clients. Through field research environments. Learning to utilize techniques and focus groups, the team the workplace as a strategic tool found that staff was willing to share can help meet these objectives. The space in the home office if they were following case study participants— given the technology necessary to who are major players in the IT, real support their customers while in the estate, furniture, and management field. Since staff indicated that they consulting industries—demonstrate did not necessarily require cubicles or how to use resources when redefining desks at the IBM home office, the team the workplace as a dynamic, mobile explored a variety of new real estate environment. designs. Ultimately, the team settled on a mixed use design consisting of multiple collaboration office spaces Case Study #1: IBM Reduces designed only for management. This Its Real Estate Footprint design, which initially centered on a 4:1 Through Telework staff-to-desk ratio, was based on the When IBM’s Norfolk, Virginia office fact that staff was spending the majority assessed its levels of client satisfaction, of their work week at client sites. The staff satisfaction, and productivity, it had mixed use design provided a flexible no idea that the findings would lead to office environment for staff to return to a dramatic reduction in its real estate as needed. footprint. Assessment results showed After announcing the pilot, the cross- that both IBM’s clients and staff wanted functional team developed and delivered work arrangements that allowed them a carefully-designed communications to collaborate at client sites on a daily campaign. Its key message was that basis. To accommodate this finding, this pilot was a move towards mobile the Norfolk office embarked on an eight work—working at customer sites or month process designed to identify and

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in other remote offices as needed— IBM implemented an international and not simply a work-from-home rollout of telework and mobile work program. A behavioral psychologist programs in 1996 – the same work helped the office prepare for the programs are still offered today and cultural shift that would result from mobile work and telework have become this new work arrangement. Managers a global work arrangement for IBM. and staff were encouraged to discuss To support its mobile work programs, potential frustrations with the new IBM hired a global mobility officer who work arrangement in cultural training leads a cross-functional team that works sessions. to design specific mobility programs for the company’s various regions. Feedback from clients, staff, and When designing programs, the team management on the mixed use design employs an 80/20 rule, which states that was very positive. 80 percent of IBM’s support standards Modeling Norfolk’s pilot, IBM must be used worldwide, while 20 implemented the same pilot program at percent may be adapted to suit the local four additional offices throughout the geography, business unit, and work U.S. before implementing the mobile culture of a specific region. work program at all of its sales offices Today, 39 percent of IBM’s in 1995. IBM used its lessons learned 300,000-member worldwide staff works from three years of pilot programs to in some type of a remote environment implement the nationwide program in and the 4:1 staff-to-desk ratio has been only two weeks. Under the program, gradually increased to an average of IBM’s entire national field workforce— 12:1. totaling 10,000 associates—gave up its dedicated workspaces. The nationwide Over the past ten years, IBM has realized program saved IBM a total of two million over one billion dollars in global real square feet (SF) of office space by estate savings. While IBM does not have eliminating 7500 workspaces in 1995 – figures on its real estate savings in Asia resulting in approximately $100 million in Pacific and Latin America, it reports that annual U.S. savings. alternative work arrangements save IBM $100 million annually in Europe. The Following the national rollout, IBM savings realized in the U.S. and Europe headquarters staff started to request the is used for continued investments in option of telework and alternative work leading-edge technical support for environments. In response, IBM started worldwide staff. In addition, IBM’s alternative work environment programs mobile quality-of-life benefits have at offices with expiring leases. Offices proven instrumental in retaining and were deemed suitable for telework and supporting both a maturing workforce mobile work arrangements by examining and a younger generation of associates. the number of staff, current use of space, and ratio of those who would telework. 33 Workspace Utilization and Allocation Benchmark

Case Study #2: Sabre’s of square-feet allocated per position. Workspace Innovation But as a travel technology company, a healthy percentage of Sabre’s associates The following case is extracted from Sabre traveled on business, leaving their desks Holdings Case Study.12 empty. Dean Sanderson, Sabre’s Vice President of Corporate Real Estate at The Sabre Holdings Flexible Workspace the time, realized that if there was a Program (Flexspace) is an alternative, way to increase utilization of the space, flexible space model where only a real estate costs could be dramatically percentage of cubicles were assigned reduced. But could it be done? and others remained available for “flexible use.” Sabre was able to achieve In 2006, Sabre was allocating about 350 significant savings within 18-months, square-feet per employee, well in line reducing global real estate costs by with industry standards at the time, 25 percent and ultimately created a although companies were beginning sustainable enterprise transformation for to look for ways to reduce that figure value beyond the bottom line. to 250 square feet. Even by traditional measures, the company had too much The seeds for Sabre’s Flexspace program space. Its five headquarters buildings were actually planted in 2000, as the had 4,000 seats, but housed around company began planning for its new 3,000 employees. After reviewing corporate headquarters in Southlake, approximately six months of badge Texas. The travel technology firm, data from security checkpoints across with more than 9,000 associates in 59 campus, Sanderson confirmed what countries was moving from being a he and his real estate team had already mainframe computer-driven company speculated: employees were frequently with a corporate culture rooted in out of the office, and on average, only traditional hardwall offices to a more 60% to 65% of them were actually in the agile technology firm poised for growth. office on any given day. Taking into As executives strategized plans for account offsite meetings, vacation and Sabre’s new headquarters, they decided sick time, even employees who didn’t to look at things from the perspective travel and considered themselves daily of how they wanted associates to work on-site workers could easily be absent to what building materials they wanted from their desks for one month out of the to use. Efficiency and flexibility would year. be important, both in terms of how associates would approach their work If Sabre was going to fold its five and how the building would operate. headquarters offices into the two LEED- certified buildings, it would have to Traditionally, gauging real estate plan for 1.35 employees per cubicle performance means measuring real — a significant increase from the 0.81 estate costs per employee. It is simply employees per cubicle the company had calculated by multiplying a building’s in 2006. Cubicles which varied in size total cost per square-feet by the number depending upon an associates’ position

12 Sabre Holdings Case Study (2011) www.sabre holdings.com holdings.com/.../Sustainable_Business_Transformation_Through_Workspace_Innovation_full.pdf 34 Workspace Utilization and Allocation Benchmark

and level within the company would have deep headcount reductions. “Ten million be reconfigured into a standard size dollars is worth 100 jobs, when you and outfitted with the same technology, consider all the costs,” Miller said. so that associates could expect the The goal wasn’t to change the way same environment wherever they were people scheduled their work, but to more physically placed to work. Executives closely match the number of employees too, who were the only associates with with the way they were already using the hardwall offices in the new headquarters space, fitting the anticipated campus building, would have to move to cubicles population of 3,000 employees into 2,200 to make room for the additional meeting seats. space required. Implementing a workplace The figures were compelling. Flexspace transformation strategy like Flexspace would reduce Sabre’s headquarters can provide meaningful corporate buildings from 1.04 million square savings that go far beyond the bottom feet, to 470,000 square line, and should be considered as part feet, slashing annual Sabre reduced of any modern corporate real estate operational expenses its headquarters program. For Sabre, Flexspace was by $10 million within footprint by a corporate real estate strategy that three years. In addition 55%, from 1.04 slashed existing operating expenses by to operational savings million square- 25%, offered a template for reducing the and lease expense, the feet to 470,000 cost of future real estate expansions, company would be able square-feet, and and accomplished significant gains in to generate additional consolidating from reducing its environmental footprint. cash by selling the five buildings to other building it owned. two. Cost per employee at headquarters would Case Study #3: Herman Miller be cut in half, and the program would On Space Standards And reduce global real estate costs per Industry Trends person by more than 25%. Herman Miller, Inc. (HMI), a global Mark Miller, Sabre’s CFO, says the provider of office furniture and office program was significant because design services, has observed that there are few things a company can companies appear to be paying more do to quickly eliminate $10 million attention to “human value” when in expenses. By pushing for greater making space allocation decisions. As utilization of Sabre’s office space, the a result, there seems to be much more company was extracting more value focus on matching human needs with out of its real estate assets. The cost economic considerations. Therefore, savings which helped the company organizations seem to move away to avoid less appealing cost-cutting from hierarchical space planning measures which are often necessary and more towards use of space that during weak economic cycles, such as provides the best possible benefit for

35 Workspace Utilization and Allocation Benchmark

knowledge workers. Currently, 48 (6x8) HMI currently recommends the following SF per person is the lowest workspace office space allocation measurements allocation for knowledge workers that for an office that houses 100 to 120 HMI typically sees in the marketplace. associates: Unlike the RSF and USF metrics • Six private offices, at 120 SF per person discussed earlier in this document, this • One 200 SF file room allocation does not include common • Two to four 50 SF phone rooms areas and only accounts for dedicated • One 150-200 SF break room workspace. However, HMI is seeing • Two 36 SF touch down areas workspace allocations as low as 36 • Two 120 SF conference rooms (6x6) or 25 (5x5) SF per person for call • Two 144 SF conference rooms center environments, since call center • One 288 SF conference room associates do not have the same storage • One 200 SF reception area and collaboration needs as knowledge • Two 48 SF collaboration spaces workers. As companies reduce individual HMI has also observed an increasing workspace, HMI has observed that number of companies using telework to group shared space has increased. In both reduce their real estate footprint fact, HMI believes that over the next and increase space allocation efficiency. five years, there will be a move towards HMI has observed that, traditionally, 50/50 allocation of office space between many companies have been slow to individual and group needs. According reinvent their work environments. For to HMI, space allocation standards— example, companies with telework such as GSA’s workspace benchmark programs often sent staff to work from average 195 USF per person—are home instead of redesigning their reasonable, provided that planners office space. In light of this trend, HMI incorporate the right elements in design. has been working with companies to In other words, space planners should redesign office space that allows for a consider issues—such as associates’ reduced space per person allocation. Its functional requirements and needs new “My Studio Environment” design for collaborative space—when making includes a workspace with translucent allocation decisions. sliding doors—which transmit light, block sound, and provide privacy—and sliding walls.

36 Workspace Utilization and Allocation Benchmark

Featured Article: Take My Desk — Please

The following article appears in the CFO Magazine24.

By rethinking office design, companies are informal meetings, and there are cutting real estate costs by nearly half. scattered café areas that look remarkably like the local Starbucks. Associates, Don Durfee, Research Editor, CFO Magazine equipped with wireless laptops, Blackberries, and cell phones, are free Remember 1999, when big companies to work wherever they wish. Some rushed to imitate the dot-coms by companies are taking the idea further, crafting hip workplaces? Suddenly, combining new thinking on office space relaxed dress codes, refrigerators full of with an endorsement of telecommuting Diet Coke and Snickers bars, and dogs or the establishment of smaller, more in the halls made the corporate life seem modest regional offices that associates a little less corporate. can drop in to as needed. Most of that funky aesthetic disappeared faster than you can say “New Economy,” but one facet is making a quiet Empty Desks comeback: the open office arrangement. The concept is not new; as Sandy Motivated more by a desire to save Apgar, a partner with The Boston money on real estate than to please Consulting Group’s (BCG) real estate finicky associates, companies including practice, says, “Over the years, many Motorola, Ernst & Young, and Cisco companies have touched on this topic Systems report that they have cut real but not gone much further. They run into estate costs significantly by adopting significant resistance, especially from “alternative workplace” designs. Cisco, midlevel managers, and interest wanes.” for example, has seen 37 to 40 percent savings from its new approach. But there are reasons to believe that this time things may play out differently. Capital One Financial Services Corp. A recent Gallup poll commissioned by has made the concept a key part of its CoreNet Global, a corporate real estate “Future of Work” initiative by swapping association, found that 20 percent of traditional offices and cubicles for a large companies expect to have between mixture of unassigned desks, sofas, 25 and 50 percent of their associates and conference spaces. The company’s working in unassigned spaces in cafeteria is designed to accommodate 2012, and by 2020 the majority of large

37 Workspace Utilization and Allocation Benchmark

companies are expected to have adopted the time. “Some people were using the practice to some extent. their offices only 5 percent of the time,” Schuyler says. By eliminating most The primary driver is economy: as dedicated workspaces (administrative managers work their way down the assistants got to keep their own list of cost-cutting opportunities, real desks), the company has sharply estate emerges as an attractive target. reduced its needs. A building that once At most companies, property-related accommodated 650 associates, for costs are second only to salaries and example, now serves 1,200. Schuyler benefits. Some companies have already declines to say how much the company pared such expenses, typically by has saved, but real estate professionals consolidating partly vacant buildings and say that such actions can produce either selling or subletting what’s left. savings of up to 40 percent. Alternative workplaces offer an Another factor pushing companies to opportunity for deeper cuts because reconsider office space is the widening they represent a shift from thinking gap between what workers need and about occupancy (how many people what workplaces provide. At one time, a building can accommodate if each office associates labored primarily in worker is assigned a specific seat) to solitude; today, they spend two-thirds utilization (how many people actually of their time collaborating, according use a building or office at any given to Gartner. But offices are still set time). “Companies are starting to realize up for the old style of work. “In most that instead of being satisfied that their companies, you find that conference building is 95 percent occupied they rooms are overbooked while offices and should instead be worried that it’s only cubicles are empty,” says Mark Golan, 40 percent utilized, because people are Cisco’s vice president of worldwide real often out of the office,” says Prentice estate and the chairman of CoreNet. “It’s Knight, (former) CEO of CoreNet Global. insane. Not only is it wasteful, it doesn’t Matt Schuyler, Capital One’s executive suit the needs of your workforce.” vice president of human resources (he Like Capital One, Cisco’s response also oversees real estate), says he was has been to turn the old design on its “startled” by just how true that was after head by making the office a home away his team and the company’s finance from home. “You don’t go home to a department surveyed how office space cubicle,” Golan says; “you move around was being used and calculated how the house depending on what you’re much could be saved by reorganizing. doing.” When Cisco’s associates aren’t on the road (they’re on the road about 20 percent of the time), they usually work Double Occupancy together, so the space was reconfigured Research showed that associates were to provide open areas where associates working somewhere other than their can have quick, informal meetings, offices and cubicles more than half while work teams can gather in a range

38 Workspace Utilization and Allocation Benchmark

of small and large conference rooms Full-service real estate providers have outfitted with video-conferencing geared up to help companies make the equipment and digital whiteboards. transition. Such firms as Jones Lang When associates need what Capital LaSalle and Trammell Crow Co. now One refers to as “heads-down quiet guide companies through the process, space” they can move to a library, where from space planning to implementation. conversation is minimal and cell phones Even furniture makers have joined the must stay on vibrate mode. act. “A decade ago, if you wanted a mobile furniture system, you had to have The goal is to augment the savings on it custom-built,” says Knight. Now, most real estate with enhanced productivity. components are available out of the box. Measuring productivity is never easy; as Cisco’s Golan notes, “It’s hard to Building the new space is only half the isolate the effect that any one variable effort, though — companies also need has on worker output.” But he says that to persuade associates to embrace it. a pilot project in the company’s call An office still conveys status for many, centers resulted in “very significant” and some managers are uncomfortable improvements. Capital One attempts with direct reports working at home or to crack the productivity code through in ever-changing corners of the office. worker surveys, and says that three- Associates may simply wonder where quarters of associates surveyed say they are supposed to stash all their stuff. they are now working as productively Capital One addresses those and similar as possible, while just over half say that issues by launching a needs assessment group productivity is up. The company that examines how work gets done in also found a 24 to 31 percent reduction each unit. (To date, eight units of the in the time needed to get input from company totaling about 2,000 associates managers and peers, which it says leads have moved to the new system, with to faster decisions. some of the biggest groups slated to make the move next year.) The design of each space varies depending on the Making It Work needs of the people who use it. For The good news is that alternative example, in IT much of the work is done workplaces are much easier to set up on a project basis, with teams forming than in years past. For many knowledge and then disbanding once projects are workers, work is almost synonymous completed. So the company created with Internet access. Now that laptop “agile project rooms,” with movable computers are powerful and inexpensive, walls, electronic whiteboards, and even wireless networks proliferating, and careful control over the thermostat, various conferencing technologies because with all that gear and people in maturing, “office space” can be created one place, the temperature can climb to virtually by using the tools that workers uncomfortable levels. would be supplied with anyway. Associates are given the option of “going mobile,” and about 80 percent

39 Workspace Utilization and Allocation Benchmark

choose to do so. They receive six to since added glass walls that extend to eight weeks of training on everything the ceiling. from how to be productive while working Executives at companies that have made in virtual teams to how to use new the move to alternative workplaces equipment, to how to manage their own agree that the change-management piles of paperwork when they no longer issues require a lot of attention. One have dedicated desks. (Hint: forget financial services firm in New York jump- hard copies and instead embrace the started its process by giving managers “paperless office.”) a reduced amount of office space and Flexibility is essential. There are big left it to them to decide whether to stick differences between what suits the with the traditional office layout, which sales staff, who travel a lot, and the would result in a cramped cubicle hell, engineers, who are more office-bound or adopt a more inviting, open plan that and have more gear. Companies may allowed for some growth possibilities also discover that some seemingly good — assuming associates shared the ideas don’t work. Hewlett-Packard, space. As Chris Howe of BCG notes, for example, which is in the midst of a “It doesn’t force anyone to do things a four-year overhaul of its hundreds of certain way, but it does make the trade- buildings worldwide, found that newly offs very clear.” created small project rooms, enclosed by low partitions, were too noisy. It has

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Workspace Utilization and Allocation Benchmark

Acronyms

Acronym Definition

AWA Alternative Work Arrangements BCG Boston Consulting Group CFR Code of Federal Regulations COOP Continuity of Operations CRE Corporate Real Estate GSA General Services Administration HMI Herman Miller, Inc. IBM International Business Machines OGP Office of Govermentwide Policy OPM Office of Personnel Management PBS Public Buildings Service PTO Patent and Trademark Office RSF Rentable Square Feet SF Square Feet TIGTA Treasury Inspector General for Tax Administration USF Usable Square Feet ZEF Zero Environmental Footprint

43 Smarter Solutions

July 2011

GSA Office of Governmentwide Policy Office of Real Property Management Performance Measurement Division

U.S. General Services Administration 1800 F Street, NW Washington, DC 20405 www.gsa.gov