Knoll Workplace Research The Metrics of Distributed Work Financial and Performance Benefits of an Emerging Work Model Dr. Michael O’Neill Tracy D. Wymer Senior Director, Workplace Research Vice President, Workplace Strategy Knoll, Inc. Knoll, Inc. The Metrics of Distributed Work Financial and Performance Benefits of an Emerging Work Model New workstyles demand While many organizations currently have Through these efforts, we identified the distributed work programs, there has been design attributes of distributed work fundamental rethinking of little organized information and few metrics to programs, how success is measured, and the workplace strategy assist companies wanting to learn more about financial and employee satisfaction benefits of this emerging workspace strategy. this new workplace strategy as compared to In many companies, employees are conventional workspace. To address this need, Knoll engaged Ratekin working in an increasingly social, Consulting, a leading workplace research firm, mobile, and collaborative fashion. The Distributed work environments are to conduct this study. conventional, boilerplate office programs characterized by a wide variety of smaller and spaces that most of us are familiar Our study sample represented a cross section individual and group spaces with higher with were never intended to support the of forty organizations across eleven industries, sharing ratios: complexity and unpredictability of these having varying levels of familiarity with 4 Smaller, higher density individual spaces new work patterns. distributed work programs. 4 A wider variety of individual and group This new workstyle is often referred to as For three-quarters of our sample, distributed setting types “distributed work”—a combination of heads work programs are common practice across 4 Increased allocation of seats for down “focus” work, formal and informal all or multiple locations (Figure 1), with an collaborative spaces collaboration of varying duration, and social average of about seven years experience. interaction that occurs in a wide variety of Over half of the organizations involved in 4 Reduced emphasis on large formal settings within the building, campus or other distributed work expect these programs to meeting spaces locations. In addition to physical space, work grow during the next three years. Organizations employing distributed work policies, technology and communications Data were gathered from corporate real estate programs enjoy a number of important networks play a key role in facilitating and facilities directors and vice presidents. financial and employee satisfaction distributed work. With an average of 20 years experience and benefits: Employees embrace new levels of personal 10,000 end users, these participants provided 4 Substantive cost savings—an average freedom in spaces that are explicitly designed a rich discussion on this topic through multiple 33% first year cost avoidance over to support distributed work. These dynamic, methods: an on-line bulletin board, electronic conventional workspace, with consistent interactive workplaces recognize the survey and structured interviews. savings thereafter. substantial shift toward formal and informal collaborative activities, as well as the social component of work. Our study sample represents a Most offer distributed Distributed Work Adoption Levels diversity of perspectives work programs Not planning to adopt 8% This study includes 40 organizations Planning to adopt; from eleven industries, reflecting multiple 3% no activity yet points of view. Slightly over half of the real estate managed by participants is in North America, the remaining is located 40% elsewhere in the world (Europe, Asia, Common practice Central and South America, Middle East, at all locations Australia and Africa). See Appendix for more details about the demographics of study participants. 17% 32% One or more pilots Exists in multiple locations Figure 1. Ninety percent of study participants are actively delivering distributed work programs © 2011 Knoll, Inc. The Metrics of Distributed Work Page 1 4 Greater space utilization—7 to 12 Many of the drivers shown in Table 1 were The average square footage per person has percentage points greater than ranked first on at least one organization’s steadily declined from about 225 square feet conventional spaces. list. For example, “minimize cost” is number ten years ago, to 135 square feet per person 4 Higher levels of employee satisfaction— one in the ranking, yet was chosen as the today (Figure 2). This steady reduction in about two-thirds of employees are satisfied number one driver by slightly less than half space is happening in both conventional and with the impact of distributed work of participants. Even then, the way in which distributed work models. cost reduction is achieved varies among programs on their individual performance For many participants, the gradual evolution participants; real estate portfolio size, and 80% feel this way about their team of their distributed work strategies includes reconfiguration/renovation, travel, employee performance. fewer, and smaller, enclosed offices and turnover/on-boarding and overall real estate workstations, further driving the downward cost per employee were all mentioned. trend in overall square footage. Thus, 1. while the reduction in workspace square While cost is an obvious footage targets is common to all workspace 2. consideration, strategic strategies, it is especially pronounced for The nature of individual distributed work programs. priorities drive distributed and collaborative spaces is B. Collaborative work is shifting from large workDrivers programs of Distributed Work Programs changing formal meeting spaces to smaller, informal Prior studies defined a list of business issues Strategic issues play a larger role in workplace strategyReducing for theorganizations footprint of that individual implement meeting spaces thatdistributed shape decisions work programs about workspacethan for those with conventional offices (O’Neill and Wymer, 2010). In this study, we workspace to gain efficiency has been a Signaling a sea change in the nature of asked1. Minimize participants cost to draw from the issues routine6. Sustainability practice for at least the last ten years, collaborative work, small meeting rooms (2 for both distributed work and conventional to 7 people) have peak utilization rates about developed2. Support fromeffective that researchwork process and rank their 7. Communicate corporate values importance as drivers of distributed work workspaces. to employees Regardless of workspace 20 percentage points higher than large and 3. Support collaboration / innovation model, the shifting nature of collaborative extra large meeting rooms (8+ people). Large programs (see Table 1). Each also had the 8. Communicate brand opportunity4. Maximize to space insert utilization issues not on the list. work is driving higher utilization rates for traditional meeting/presentation rooms are small9. Ergonomics meeting spaces / health and and lower safety use 5. Attraction / retention especially underused. These shifts are true The (employee top drivers satisfaction) for distributed work programs for large, traditional meeting rooms and for both conventional and distributed work are biased toward strategic considerations. presentation spaces. spaces (Figure 3). WhileTable 1.cost Cost ranks is the as top the driver number but is one not driver,the sole trigger for launching distributed work programs strategic issues (such as supporting effective A. Square footage targets for workers Many organizations have expressed that work processes, collaboration, or retention) have dropped dramatically over time utilization rates are declining for larger meeting are what motivate organizations to implement spaces. Meetings tend to be shorter, more distributed work. casual and with fewer members than in the Drivers of distributed work programs Average square footage per person Sustainability and distributed targets have declined steadily work are increasingly connected 1. Minimize cost Square Footage per Person Targets Sustainability rated sixth on our list of 2. Support effective work process drivers, yet is the number one driver cited 250 3. Support collaboration / innovation by several organizations. Sustainability’s prominence in this study reflects both 4. Maximize space utilization 200 its increased visibility in recent years 5. Attraction / retention (employee satisfaction) and the level of interest shown by many organizations in demonstrating the positive 6. Sustainability 150 227 environmental impacts of distributed SQ. FT. 205 work practice. Given the materials and 7. Communicate corporate values SQ. FT. 180 resources required to build, operate and to employees SQ. FT. 100 maintain office buildings, there is an 8. Communicate brand 135 SQ. FT. relationship between distributed work 9. Ergonomics / health and safety strategies and sustainability. 50 In this study, three-fourths of the Table 1. Cost is the top driver but is not the sole 0 participating companies make a strong trigger for launching distributed work programs. 10 years ago 5 years ago 3 years ago Today connection between their corporation’s Strategic issues play a larger role in workplace position on sustainability and workplace strategy for organizations that implement Figure 2. Square footage per person targets have distributed work programs than for those with strategy, and half are actively declined an average of