SWS Roadmap high res

May 2006

Smarter Workplace Roadmap –How to implement workplaces that deliver bottom line impact

Executive Summary

• While cost may be the initial driver of Smarter

Workplace Solutions (SWS), other business

benefits far outweigh the savings in real

estate costs.

• However, a reduction of workspace to staff

ratio of 0.85:1 can deliver $1.95 million in

savings per annum on fit out and rental costs

on a 5,000sqm tenancy.

• The cost of replacing staff in one Australian

company is estimated at five to six times the

cost of accommodating them – SWS can be

an important tool in the war for talent.

• Companies have found that improving

work location, choice and mobility helps

them retain staff and increase satisfaction

by empowering people with the tools and

authority to decide when and how they work.

• Companies have reported greater than a 65%

increase in staff satisfaction as a result of

moving into a smarter workplace.

• Procter and Gamble’s primary success

measures of SWS are worker satisfaction,

improved work productivity and work-life

balance.

• NCR currently have 8% of their global staff

classified as “virtual” which they are aiming

to increase to up to 22% through SWS. The

workspace to staff ratio here is 0.15:1

• Space reduction strategies were found

to be most successful when phased into

organisations, allowing the staff the benefits

of flexible work practices before reducing

workspace ratios.

• Common roadblocks in implementing

SWS include the organisation’s culture and

emphasis on being “seen” at work, middle

management territorial behaviour, document

access problems and impracticalities

associated with working from home

amongst staff.

2 Smarter Workplace Roadmap

INTRODUCTIONNow that much of the low-hanging fruit (in terms

of CRE costs) has been harvested, organisations

are looking to the workplace as a resource to be

leveraged. Workplaces today are promoting choice

and personal empowerment that support the

high performance cultures many firms advocate.

The increasing awareness of these new workplace

environments has dramatically altered expectations

and is increasingly reflective of the connections

senior executives are making between the work

environment and business outcomes. As a result

contemporary organisations are demanding a greater

return from their real estate investment.

This paper looks beyond the fashionable design

trends to explore the benefits as well as the pitfalls of

Smarter Workplace Solutions (SWS). We consider

different objectives and different starting points

and how these translate into different combinations

of smarter workplace elements through the

experiences of a number of leading companies

across Australia and Asia. It is the third in our series

of papers addressing the value of the workplace

as an organisational resource; being The Smarter

Workplace Toolkit and The Future Office.

• Individual work as a % of an overall job scope is

expected to decrease by 20% by 2010, highlighting

the importance of collaboration.

• Flexible workspace configuration can decrease

churn costs by up to 50%.

• Critical success factors to implementing SWS

include support from CEO and business line

managers, integration with HR & IT, alignment

with company objectives, undertaking research

first with employees and strong communication

and training.

SMARTER WORKPLACE ROADMAP

3Smarter Workplace Roadmap

• ANZ• Bank of America• EDS• EMC • J P Morgan• NCR• Procter & Gamble

LASTING THE DISTANCESmarter workplaces are not a destination, but

a journey.

The journey itself provides opportunities for

engagement, learning and change, but it also presents

obstacles and “speed humps”. We spoke with seven

CRE executives in the Asia Pacific Region whose

companies have embarked on the mobile and flexible

work path. Different organisations seek different

benefits, and use a variety of smarter workplace

strategies to deliver these. They offered to share their

perspectives on the goals, the successes, the challenges

and the outcomes to date. Those companies included:

KNOW WHY YOU ARE EMBARKING ON THE JOURNEYThere is no definitive data on the uptake of SWS,

but the findings of our recent Corporate Real Estate

Impact Survey (CREIS) suggest that more firms are

looking at using such strategies: 25% of companies

surveyed believe they will have more staff than

workstations within the next three years, compared

to only 7% three years ago(1).

Most of the firms we spoke with acknowledged the

important role cost savings play in gaining the initial

attention of management. EMC acknowledge this

is the primary driver for the SWS initiatives they

have implemented. EMC divide their workforce by

function into fixed and floating. The majority of their

staff (60-70%) are currently classified as fixed, and

are allocated their own dedicated workpoint. For the

other 30-40% of staff who tend to be those in more

client facing roles, desk sharing has been introduced,

with a ratio of 1.5 staff per workpoint. This has

produced significant savings in real estate costs.

“It’s all about cost saving. We targeted savings of 20% – 25% from our real estate budget and these have been achieved through a reduction in space requirements, without any noticeable negative impact on our business”.

While EMC recognise the need to provide ‘something

back to staff’ in return for non dedicated workpoints,

the costs of doing this are significantly below the

savings achieved from requiring less space.

However, the other clear message to emerge from our

discussions with CRE executives was that while many

initially embarked down the SWS route as a means

of reducing real estate costs, companies have found

other beneficial outcomes emerging that they believe

will outweigh savings in real estate costs over the

longer term.

“Our SWS initiatives have resulted in estimated savings of US$17 million p.a. in the global real estate budget. Even allowing for the cost of additional IT spending, this still equates to a net annual saving of US$7,800 per person”.

While the companies we spoke with wanted better

bang for their investment buck in corporate real

estate, they also use their workplace management

approach as a key positioning strategy and

differentiator from competitors. These firms set

their heading from a business rather than design

standpoint, seeking a range of organisation benefits,

depending on circumstances:

• Better ability to attract and retain talent by catering

to different generations and their working

styles and work-life balance expectations.


• Improved support of knowledge workers by

providing them with greater choice and control

over when, where and how they work, resulting in

higher productivity.

• Enhanced communication and collaboration

between staff within and across different

business groups.

• An environment more conducive to inspiring

creativity and learning.

• An environment that better expresses their culture

and articulates their brand.

• Improved interface between customers and

front office staff.

• Differentiation from competitors.

• Reduced magnitude of direct real estate impacts

caused by constant fluctuations in staffing levels.

• Faster cultural and structural integration and

reduced real estate liabilities as a result of merger

and acquisition (M&A) activity.

These findings are consistent with the results of Jones

Lang LaSalle’s recent CREIS survey which indicated

that almost 60% of respondents cited non cost factors

such as increased productivity and interaction as the

primary driver for implementing SWS strategies.

RECOGNISE DIFFERENTSTARTING POINTSWhile corporate real estate policies are commonly

applied globally or regionally, there are a number

of important local considerations that need to be

considered. At the Asia Pacific level, several firms

noted that SWS strategies tended to work better in

more ‘westernised’ markets (particularly in Australia

and New Zealand) and less well in Asian markets

such as Tokyo or China. One such company is Bank

of America, who have not introduced any desk-

sharing initiatives in their offices within the Asia

Pacific region.

We have identified four main reasons for different

SWS strategies and levels of application in different

countries from the companies we interviewed:

Cultural factors: The Asian work ethic tends to be

less suited to working from home as it attaches more

importance to being seen the office. This works in

respect of both staff, who feel more valued when

working in the office and management, who find it

easier to exert control when they can see their staff.

Real estate costs: The level of real estate cost is

another factor in determining in which markets

SWS initiatives are most likely to be implemented.

In practice, those markets with high commercial real

MAJOR REASON FOR IMPLEMENTING SWS


estate costs that would make SWS most valuable (e.g.

Tokyo and Hong Kong) are likely to be those where

residential costs and conditions (see below) are

likely to limit the extent to which such initiatives are

practical.

Home conditions: The stronger family ethic

and typically smaller accommodation in many parts

of the Asian region make it less practical for staff

to work from home. This has been found to be a

particular problem in Japan, China and Hong Kong,

where living accommodation tends to be very small

and densely populated with extended family, making

it extremely unlikely that staff would have the

benefit of an office or study from which to work in

their home.

Technology: The technology exists for fast, secure

and relatively reliable broadband access in most CBD

areas across Asia Pacific. The same can not be said

for residential areas in many countries and this again

limits the ability of staff to work outside of the office.

This is currently a particular problem in cities across

India, China and Indonesia.

For Bank of America, the most significant of these

reasons are related to the prevailing social and

business culture. Firstly, the traditional nature of

the Bank vests power within the business lines, and

most senior banking staff have not been interested

in creating innovative new workspaces. Secondly,

while senior staff travel away from the office they

strongly object to the idea of not having exclusive use

of their own workstation, and the majority of junior

staff are at their desk most of the time and would

be unsuitable candidates for sharing. Additionally,

the management culture equates performance with

presence and there is an “out of sight out of mind”

fear. Thirdly, many staff come to the office to gain a

sense of belonging, which would be threatened if they

did not have their own space. This is compounded by

the unsuitability of home environments for working

in many Asian countries. The Bank of America

was also concerned, as are many other financial

institutions, that data security could be compromised

by remote access. The Bank also believes that

locations close to public transport and the prestige

associated with occupying well-located top quality

space are greater motivational factors than the

internal working environment in terms of attracting

and retaining staff.

DIFFERENT ROUTES, DIFFERENT CHOICESKnowing your destination – that is, your company’s

objectives in implementing SWS – is critical. The

different goals of a smarter workplace strategy

may be achieved in a number of ways. Different

physical and managerial elements can be harnessed

in different combinations or sequences to achieve

different outcomes.

Expressing Culture and Brand

Part of the attraction of new forms of working is that

they reflect a modern, progressive and innovative

organisation with one firm we spoke with citing their

desire to “create a cool place to work.” It is difficult

to measure the impact that the working environment

has on staff satisfaction, but one firm reported a 67%

increase in staff satisfaction as a result of moving to

new premises.

“While we are a very cost conscious organisation, the real benefi ts from SWS initiatives are through changing corporate culture. The only problem is that this is very hard to measure and diffi cult to change over a short period of time...Reducing staff turnover has a far greater impact on the P&L than spending slightly more on a higher standard of fi t out”.

ANZ has developed new workplace guidelines that

draw their inspiration from the bank’s “Breakout”

cultural program, which has been active within the


piloted a hot-desking strategy in order to substantiate

an estimated $13 million rental saving per year,

found that in the test group, savings of $27,250 p.a.

were completely obliterated by turnover costs

of more than $1 million(2). Staff turnover in the

group increased by a staggering 83% and morale

and satisfaction dropped significantly below the

company average. The lesson learned was that in

this particular instance “smaller working spaces and

better utilisation of floor space would potentially

generate more savings than the hot-desking method.”

This example reinforces the need for organisations

to clearly define where they are heading and to

understand what specific route is appropriate given

their starting point and circumstances.

It is critical that both the C-suite and the CRE team

are clear about the desired business benefits and

therefore the objectives of the program. Only then is

the strategy able to be mapped out, and the specific

elements that are required to implement it – such as

desk-sharing, mobile working, team-based desking,

or flexible working hours – able to be identified,

tested, refined and managed.

Mobilising SWS In The War For Talent

The number of people entering the workforce

is declining as the population ages, and with

employment levels at an all time high, companies are

increasingly seeking new ways to compete and get

ahead in the war for talent. Whilst remuneration is

important, today’s younger recruits are concerned

about the image of the company, placing high

emphasis on job satisfaction, work-life balance and

demanding greater flexibility in where and when they

work. Flexible work practices can be an important

strategy in the war for knowledge worker talent.

Replacing staff is an expensive exercise for any

business; recent studies suggest staff turnover costs can

equate to between one and two times annual salary.

While the specific numbers will vary between markets

and organisations, the cost of replacing senior staff

are likely to far outweigh the real estate costs of

company for a number of years. These guidelines

will be progressively implemented nationally

through new or refurbished fitout projects. In order

to support the endorsed management culture new

workplaces are far more open and less hierarchical

than before, and include a wider variety and quantity

of collaborative spaces, from formal to informal.

Changing corporate culture is generally recognised to

be a long term process which requires prolonged and

active support from senior management. While many

firms acknowledge the role of the physical work

environment in expressing the corporate culture,

only a few have developed a means of measuring or

quantifying how to measure progress against this

objective.

“We measure the success of our SWS program not just through fi nancial measures such as occupancy cost per employee, but also in terms of its impact on changing the corporate culture towards the workplace”.

Whilst many companies embracing SWS realise the

non-financial benefits they set out to achieve, the

potential negative impact on business performance

from an ill-considered SWS implementation may be

far greater than the real estate costs saved.

As an example, a financial services company that


housing them. By way of example, one Australian

based firm uses a ball park of 50% of annual salary

as the cost of replacing staff. (this equates to

$40,000 – $50,000 as the cost of replacing a middle

ranking employee). The real estate related costs of

accommodating this same person are calculated

as $4,000 – $5,000 for the workstation itself, with a

further $6,000 – $7,000 p.a. to cover rental and other

annual real estate costs. For this company, the cost

of replacing staff is somewhere between five and six

times the real estate cost of accommodating them. In

these circumstances, it clearly makes good business

sense to use real estate as a means of increasing

staff satisfaction and thereby reducing turnover,

rather than seeing it purely as a business cost to be

minimised.

“Within fi ve years, all the cost savings will have been exhausted, with the longer term benefi t of SWS being its contribution to improved employee retention”.

Procter & Gamble, consistently rated as one of

the top ten companies to work for, identified the

workplace as a potential tool which could be used

to increase their attractiveness as a global employer.

The company has introduced a ‘Flexwork’ program,

which consists of three interrelated components

encompassing management, human resources,

information technology and corporate real estate

strategies and policies:

• A work from home program

• Flexspace, hoteling and hotdesking set-up in

the office

• An open plan workplace based on a universal

layout, with an emphasis on collaboration,

comfort and a sense of fun.

The main drivers for the program are employee

attraction and retention through greater work-life

balance; with cost mitigation a secondary focus.

Success stories exist around the globe including

Singapore, Manila, India, Taiwan, Brussels, Geneva

and the US. About 10% of employees participate in

the Flexwork program worldwide. However, their

regional headquarters in Singapore has the first full

blown Flexwork program internationally – around

60-70% of staff (800-1000 people) are enlisted in

the project.

Procter and Gamble’s primary success measures are

worker satisfaction, improved worker productivity

and work-life balance, although project profitability

is also reviewed. The company measures the

success of the program through satisfaction surveys

performed three months after occupancy with both

manager and employee participating.

Providing Knowledge Workers With Choice And Control

Other companies are looking for ways to improve the

effectiveness of their top talent, and as the McKinsey

Quarterly reports(3): “what makes these workers

valuable is their ability to work collaboratively, to

leverage ‘relationship capital’, and to improvise

and improve new solutions within an environment

that fosters trust and constant learning.” It is widely

suggested that leveraging and maximising the

value of knowledge worker interactions is a key

requirement for gaining competitive advantage in the

current business climate.

To do so companies are starting to change the way

they organise and manage their talent and enabling

technologies. Management consultants McKinsey

& Co suggest that “the levers that managers must

pull to get this job done [are] flattening hierarchies

and creating an environment for constant learning.”

However it is critical to understand exactly what

a company must do to use these workers most

effectively and it is here that the companies we

surveyed believe SWS strategies can play an

important contributory role:


“It’s all about talent. Talented people make far more contribution to our business than real estate can ever achieve by reducing space”.

Research from the Buffalo Organisation for Social

and Technological Innovation (BOSTI) states that

the benefits of a well-thought out workplace strategy

are equal to 3-15% of an employee’s annual salary, or

4.7-23% of corporate profits on a per employee basis.

This is equivalent to around $1,900 to $9,600 per

employee per year(4).

Flexible arrangements provide staff with greater

choice and control over when and where they work,

and improved ability to balance work and personal

demands in a way that suits their circumstances

without compromising performance outcomes.

Choice and control is provided mainly in two ways;

flexible working arrangements and work mobility.

Flexible Working Arrangements – Staff have more

flexibility in determining where and when they

work, for example through shorter working days,

days spent working from home or flextime where

they take time off in lieu of longer hours for certain

periods. Some firms or job types require that these

arrangements adhere to a fixed schedule; others are

more fluid and reactive to changing demands.

“We have found that offering more fl exible working practices has been a big factor in attracting women returning to the workforce”.

Approximately 10% of all employees at JP Morgan

have volunteered to join the firm’s ‘flexible working

policy’. The employee nominates their own

arrangements in terms of the hours they wish to work

and the number of days that they will be based in

the office. This scheme has proved to be extremely

popular and the level of usage is increasing over time.

Workspace surveys undertaken by JP Morgan show

that most desks are occupied for between 40% and

60% of the working day, which is largely due to the

high number of staff working flexible hours. While the

company currently allocates a dedicated workpoint

to all staff – even if they have chosen not to work

in the office for the entire week – it considers the

introduction of flexible working hours as a precursor

to changes in the physical layout of space and a

reduction in the ratio of workpoints per person. The

firm aims to slowly introduce changes to the physical

layout of the office space once cultural issues have been

addressed and staff have become more comfortable

with the new working arrangements.

Work Mobility – In most organisations (including

those interviewed) few people currently work away

from the office all of the time. What is much more

common is for between 5% and 40% of staff within

organisations to work part of the time within the

office and part of the time outside of their base office

(which may be in clients’ offices, in other offices of

the firm or working from home).

Of the companies we interviewed, only NCR has a

significant number of staff working entirely outside

of the firm’s offices through their Virtual Office

program. The program was established in the US and

Europe in 1999 and NCR have since extended this to

a total of 21 countries globally. This program involves

staff being defined as either office based (where they

are allocated a dedicated workpoint), mobile (with

an allocation of 1 workpoint per 3 staff) or virtual


(with one workpoint being allocated per 7 staff). This

program has proved to be very popular with staff and

around 25% of the firm’s eligible staff are enrolled in

this program with approximately 8% of staff being

classified as ‘virtual’. NCR hopes to increase this to

around 22% of staff over time.

The original motivation for this program was to reduce

real estate related costs, but as with other firms that

have implemented SWS initiatives, NCR have found

that the major benefit of this program has been to

increase staff satisfaction levels and to appeal to those

looking for more flexible working arrangements.

These observations are in line with research in

Europe and the US which has found an average of

around 15% of staff currently telecommute for part

of the time, with this figure expected to increase

to around 25% over the next 3 years. As with Asia

Pacific, far fewer people telecommute for the whole

week, with only 5% of total staff in Europe and the

US working at home full time, which is expected to

increase marginally to around 8% over the next three

years(5).

Companies have found that increasing work

location choice and mobility helps them retain staff

and increases satisfaction by empowering people

with the tools and authority to decide when and

how they work. This not only supports increased

effectiveness because people are better able to match

their immediate work needs to the environment (for

example a day in the office for meetings, mentoring

and project brainstorming) but can also increase

both work and personal time when commute times

can be avoided (for example a day at home working

on an important report). Greater flexibility also

enables people to juggle commitments such as

getting to the bank, supporting kids after-school

activities and communicating with colleagues in

different time zones.

However, as many companies have discovered,

mobile working is not for all people and not for all

organisations. Staff whose jobs may theoretically

enable them to work from home part time may not

be able to due to space constraints, infrastructure

constraints (such as not being able to access high

speed broadband), or family constraints (such as

having young children or partners working from

home). Amongst the companies we spoke to there

was also an awareness that too much time away from

the office can reduce peoples’ connection to the firm

and to their co-workers. This may have the longer

term impact of lessening loyalty and commitment.

In one professional services firm in the US, specialist

senior staff were provided with the tools to work

from home up to four days per week. It later emerged

that many had realised once they were able to

function relatively independently that their sought-

after skills and experience could also be valuable

to competing firms – essentially these staff were

“freelancing” on the side.

Supporting Collaborative Work

To maintain a sustainable competitive advantage

companies have to innovate to survive and deliver

increased profits. However, ideas are not generated

in a vacuum, they stem from interaction and

exploration between people. The percentage of an

individual’s work product that will depend on group

input is increasing: Gartner Dataquest suggests that

individual work has decreased from approximately

40% of effort in 2000 to around 30% today, and will

reduce to only 20% of time by 2010. As individual


work can increasingly be done from anywhere, work

done in the office is becoming increasingly more

collaborative.

Smarter workplace environments are designed to

promote and facilitate interaction among permanent

and project teams, and also between people who

wouldn’t normally have opportunities to share ideas

and experiences, in the belief that such interaction

can spark ideas and stimulate thoughts leading to

business improvements. At the same time, individual

workspace requirements are diminishing, while

group workspaces become the larger portion of the

work environment.

“Research suggests the ratio of individual to collaborative space is likely to shift from around 80:20 at present to 60:40 over the next fi ve years”.

Work environments are becoming more

standardised and at the same time more flexible in

terms of customisation to different individual and

team needs. Many of the organisations we spoke with

have, or are in the process of, eliminating cubes in

favour of mobile desking systems and allowing teams

or business units to configure their environment

(within certain parameters) to suit their needs for

greater or lesser degrees of individual or collaborative

work. This may include offering a ‘menu’ of different

spaces, such as war rooms, informal team discussion

areas, individual collaboration tables, huddle rooms,

meetings rooms and staff cafés.

These environments also reinforce the trend to flatten

hierarchies, as status differences are less apparent (or

indistinguishable) through observation of individual

workspaces. While many organisations that have

moved to standardised workspace components

still nod to seniority through allocation of prime

locations such as windows and corners, more

emphasis is placed on enabling staff to customise

individual workspaces according to functional need

through use of a “kit of parts” which may include

such items as work-surface extensions, small meeting

tables, additional storage or shelving.

The firms who have partly or fully implemented

these types of work settings, such as ANZ, say that

the primary benefits have been the opportunity

to facilitate the frequency and quality of chance

meetings. This is important when work requires a

high level of knowledge sharing:

“The greater level of interaction encouraged in a denser, more open environment has been a positive experience. We have anecdotal evidence of this resulting in increased productivity and are now seeking to quantify this through more rigorous surveys and monitoring processes”.

However noise levels, which contribute to increased

distraction and probably reduced productivity

(particularly where concentrated, focused work

is required), continue to pose problems for most

organisations in the short term. This is often

addressed through educating staff to work more

quietly in open plan environments, phone etiquette

and other desirable and undesirable behaviors. Some

organisations, such as EDS, have also installed white

noise systems in the building to reduce the impact of

distracting noise.

There are also bottom-line benefits from

more standardised, flexible and mobile work

environments: the costs associated with churn

(reconfiguring work areas, moving furniture,

changing wiring and communications and building

partitions) can be reduced by up to 50%, with

employees able to reconfigure themselves, move

locations and regroup as needed. For a 10,000sqm

facility previously averaging 40% annual churn,

such a reduction could equate to as much as 166,000


per annum in direct cost savings(6). Some of the

organisations we interviewed who have implemented

widespread mobile work practices and settings, no

longer even record churn expenditure.

“More fl exible layouts allow for more effi cient ‘churn’ (rearrangement of space between teams and functions) without incurring major refi t costs.”

EMBARKING ON THE JOURNEY

Understanding How People Work

Most organisations recognise that SWS strategies can

not be uniformly applied across their entire office-

based workforce. Staff surveys or observations can be

useful in helping organisations map the mobility and

workstyle characteristics of different job types.


There is a general recognition that different strategies

will need to address the requirements of each of these

groups.

For example, at ANZ providing more flexible

working hours and conditions is regarded as an

important tool in the banks’ attempt to increase

staff engagement and attract/retain staff. They have

a particular focus on attracting older workers and

women returning to the workforce. The emphasis

to date has been on enabling staff to work from

home, with most staff still provided with a dedicated

workpoint, supported by an increased variety of

spaces enabling formal and informal collaboration

and knowledge-sharing in the office.

Setting Appropriate Sharing Ratios

With the increased use of SWS strategies, the level of

floor space per person and the ratio of workpoints

per staff are both expected to decline over the

next five years. Workspace to staff ratios for the

companies interviewed range from 0.95:1 through

to 1:7 staff, and there are examples of organisations

that have gone even higher, where staff roles

and workstyles (and enabling technologies and

management policies) permit.

Other research undertaken by Jones Lang LaSalle(7)

reveals that around two thirds of companies are

expecting to reduce the overall level of floorspace per

employee over the next three years. There are two

main drivers of this trend:

• A decrease in the size of ‘private space’ due to the

introduction of smaller workstations.

• A shift from private space to more public/

collaborative space.

Current levels of total floor space per person vary

from 11sqm to 17sqm among the companies*

we spoke with. However as smaller individual

workpoints should be balanced with more public

space, the overall level of floor space per workpoint

tends to fall modestly. Other research(8) supports

this downsizing trend, suggesting that the ratio of

individual to collaborative space is likely to shift

from around 80:20 at present to 60:40 over the next

five years.

“Space savings from new working practices have generally been ahead of expectations” .

The firms we spoke with had in the main adopted a

“softly softly” approach to introducing desk-sharing,

an approach found to be valuable in gaining early

buy-in and allowing people to get used to different

ways of working. This system has allowed Procter &

Gamble to achieve a ratio of 0.8:1 in their Singapore

facility. A tighter density of 0.75:1 was originally

targeted but this was found to be unworkable.

A lower ratio is considered achievable over time, as

staff become more familiar with working outside of

the office.

However, the exception to this moderate, incremental

approach to desk sharing is EMC, who due to the

nature of staff functions and workstyles were able to

achieve an average workpoint: staff ratio across the

Staff Workstyle Classifi cations Nature of activities

Time typically spent at their desk Also known as

Office based Admin/Support/Finance >80% Territorial/Zoners

Partially office based Client facing 40% – 60% Roamers/mobile

Based outside of office Consulting <20% Virtual/Road Warriors

While the definitions (and the names used) vary

between organisations, three broad groups of staff

can typically be identified in terms of their relative

mobility:


Company Workpoint:Staff Ratio* Comments

EMC

0.67:1 –Maximum0.85:1 –Average

Maximum applies to customer facing staff where 1 desk is allocated per 1.5 staff.30-40% of staff currently share desks with a further 60-70% allocated dedicated workpoints.

NCR 0.33:1- Mobile0.15:1 – Virtual

Staff are classified as fixed (1 workpoint per person), mobile (1 workpoint:3 staff) and virtual (1 :7 staff).

Procter & Gamble 0.8:1

Applies to Singapore facility only.Tried to reduce ratio further (to 0.7:1) but found this created too dense an environment.

EDS 0.85:1

Currently working on 0.85:1 in their AP regional HQ (Sydney), looking to reduce this further to 0.75:1 as more staff are accommodated into the existing fitout.

ANZ 0.95:1 Currently provide desk for nearly all staff, this may change in time.

Bank of AmericaJP Morgan 1:1

Still allocate one workpoint for each staff, but have plans to reduce ratio over time as staff become familiar with more flexible working arrangements.

(*) Ratios apply to those staff/facilities were flexible working programs have been introduced

firm of around 0.85:1. This ratio would be equivalent

to a saving of 15% of floorspace (all other things being

equal). For an average fitout cost of $1500/sqm this

would add up to around $1.125 million on a 5,000sqm

fitout. In terms of annual rent this same 15% reduction

could reduce gross rental by $375,000 per year,

assuming rent of $500/sqm p.a. including outgoings.

These estimates don’t allow for further savings in

IT equipment and infrastructure, churn costs, other

fitout-related and operating costs.

The following table summarises the desk-sharing

ratios for the seven firms interviewed:

Territorial behavior, the ‘claiming’ of space in free

or unallocated areas, sometimes known as ‘nesting’,

emerged as an issue with some of the firms who had

implemented some form of desk-sharing. This tends

to be more likely where sharing ratios are low and

staff still spend a fair degree of time in the office. It

also emerges when two or more people share a single

dedicated workspace, where one person gradually

begins to assert their “ownership”, for example

through placement of personal items, leaving

work files on the desk, rearranging the workspace

for aesthetic or personal rather than ergonomic

reasons. Managers need to recognise that this

behaviour is natural and quite common, especially

within organisations where there has been a strong

entitlement culture. Workplace rules should be

enforced firmly but empathically, and appropriate

behaviour constantly reinforced. However, many

organisations have found that if management do

not enforce the workplace rules or do not adhere to

those same rules themselves, desk-sharing strategies

gradually become eroded over time.

All of the firms we spoke with agreed that besides

territorial issues, document access is one of the

biggest potholes on the road to mobility. Access to

team files and storage as well as to personal reference

materials can be problematic. The physical location

of shared desks can help alleviate some of this

problem, for example ensuring desks are within or

close to team areas, and that parking bays for mobile

personal storage units are also proximate. However

this design strategy may not work due to other layout

constraints, or may clash with the desire to create

lively hotdesking hubs near breakout spaces, or the


desire to facilitate wireless touchdown anywhere in

the building. As with any workplace strategy, the

optimal solution for each organisation should be the

result of careful balancing between different priorities

and desired outcomes.

Effi cient Scheduling and Managing of Space

As the number of staff sharing workpoints increases,

more attention must be paid to systems for booking

and reserving non-assigned or shared spaces.

Most companies currently use a mix of formal and

informal booking systems, depending on the extent

of mobility and sharing and the procedures in place.

For example, many companies manage hot desks

on a “first-come, first-serve” basis, particularly where

the desks are co-located in clusters around natural

activity hubs such as breakout areas, cafes, lift lobbies

or meeting facilities. This system saves the costs of

implementing and integrating new software and

supports an informal and more spontaneous way of

working. However tracking and optimising utilisation

can be difficult through an informal system.

At Procter & Gamble all workpoints in the areas

identified for Flexwork are open to anyone. A clean

desk policy is in place, with staff storing their files and

other possessions in mobile trolleys that are ‘parked’

in a central facility overnight. An electronic booking

system was originally used, but this resulted in a

number of problems, the most serious of which was

the fact that many people were reserving spaces in

advance and not using them, an example of territorial

behavior. Another interesting issue that the software

scheduling system revealed was the tendency for staff

to book to come into the office on the same day as

their managers. It was thought that this behavior may

have been a cultural hangover from the days of hands

on performance and perception management. It was

serious enough however to create peaks and troughs

in usage across the week, resulting in some days when

there were insufficient desks available. Procter &

Gamble therefore reverted to a manual system known

as ‘Take, Tag, Go’. This involves employees selecting

their nametag and placing it on a board showing the

layout of all the workpoints when they arrive at the

facility, a system which to date has worked well for

the organisation.

Formal scheduling systems are generally regarded

as an extension of meeting room booking practices.

There are a number of systems on the market, and

these are evolving to include floorplans, ability to

identify and select spaces based on particular attributes

and to request services or equipment. However it is

important that these systems are user-friendly, well-

integrated with other systems and scaleable.

Sun Microsystems couldn’t find an off the shelf

product that met all of its needs so the organisation

developed its own software as part of its “i-Work”

program, and now markets this capability to other

organisations. “SunWeb” is being established as the

primary tool for connecting people, services, and

resources within the firm, and “Sun Open Work

Practice” offers a model for managing a mobile,

globally distributed workforce through a flexible

workforce environment that maps the way employees

work to organisational objectives and policies.

Sun and other organisations we spoke with confirm

the benefits of automated scheduling systems lie in


the ability to avoid scheduling conflicts and predict

peak demand times for specific types of workspace

and thereby optimise utilisation levels. Some systems

are also able to be linked with concierge systems

to provide an enhanced suite of support services

for mobile or teleworking staff, such as stationery

and equipment ordering, printing services, travel

arrangements and catering.

Integrating Supporting Technologies

Flexible arrangements are usually (but not always)

associated with greater personal mobility. This may

be external to the primary office or within the office

environment. Mobility is supported by both hardware

and software communications and information

technologies, and it is not surprising that many of the

early mobility pioneers were IT companies such as

Sun, Cisco, Nortel, IBM, HP and Agilent.

Additional IT investments are often required to

support smarter workplace strategies, but most

firms have found these to be significantly less than

the associated savings in real estate costs that can be

achieved.

“Technology has been no problem and we have been able to provide staff with the required level of access without jeopardising the integrity of the company’s information systems”.

However without the appropriate investments in

information technology equipment and infrastructure,

mobile working can present challenges for co-workers

and managers who can find it difficult to rely on IT

networks and communications to share documents,

files, ideas and monitor/manage progress. While

training, education and transition management

can assist with these issues, for some companies the

burden of substantial investment in new technologies

and ways of working and managing outweighs

marginal savings in real estate or improvements in

productivity for certain individuals.

Information security concerns have also prevented

may organisations in the past from adopting more

mobile arrangements. Some of these concerns relate

to wireless network security, others to the risks

associated with making confidential data (such as

personal customer details) accessible outside the

physical office network. These issues are significant

and have serious implications for organisations

particularly in banking, insurance, accounting and

legal sectors. However IT security is constantly

developing and some of these concerns, while

no less critical, are able to be addressed in many

environments.

TRAVELLING TOGETHER IS CRITICAL Most companies citied as critical to success the support

of senior management from the very early stages, not

only the CEO but the business line leaders who will help

implement the strategy into the groups they control.

The support of middle managers is also required to

make the strategy a reality, with some companies

finding that middle managers tended to be the largest

roadblock. It is important for CRE managers to “sell”

workplace investments to many levels and types of

stakeholder within their organisation, not just the most

senior levels of management.

At EDS the importance of gaining management

support became very clear early in the

implementation process. The company has

introduced a range of SWS initiatives in their new

Asia Pacific regional headquarters in Sydney,

enabling them to service up to 200 staff from 150

workpoints. However while senior management

were very supportive of moves to implement SWS

initiatives, middle management were more cautious

in their reception, and have shown a tendency to

be more territorial. This has created something of a

‘road block’ which initially reduced the effectiveness

of the program.


PRE-DEPARTURE CHECKLIST

AlignmentWith the company mission and competitive positioning

AmbushBe opportunistic – use business imperatives to drive SWS

ActivitiesInvestigate how people work and how they want to work more effectively

AnalysisDevelop a business case for the return on investment over time

ApproachIncorporate multiple, mutually supportive aspects of SWS

AlliancesHR and IT must be on board, mutually reinforcing policies and procedures

AdvantagesGet personal – “what’s in it for me”

AttitudeTransition management, training, and “how to” manuals

AdaptabilityDifferent sites, cultures and business lines may have specific needs

AdjustmentSWS is not an end, rather a process of continuous refinement

“The tendency for some middle managers to resist the fi rms’ clean desk policy and try and claim certain space for their dedicated personal use, has resulted in junior staff becoming reluctant to use the workpoints that are perceived as belonging to more senior staff, even when these senior staff are away from the offi ce for extended periods” .

Another factor identified as fundamental to

the success of any SWS program is the level

of co-ordination between the CRE team and

other functions, particularly Information and

Communication Technology (ICT) groups, Human

Resources, and any Cultural or Change Management

project teams. Given that many firms, such as ANZ,

regard SWS strategies as one component of broader

HR and workplace policies, it is important for CRE

to be closely integrated and a number of companies

have commenced down the route to an integrated

business support function.

This strategy is exemplified by Procter & Gamble’s

timing for the implementation of their “Flexwork”

strategy. The Global Business Services group was

established in the late 1990’s to combine over

seventy services, including Information Technology,

Facilities, Security, Human Resources and Employee

Services under one umbrella. This combined group

was able to monitor trends in the workforce and to

use this valuable knowledge to devise and implement

an integrated workplace solution.


…and in a way that maximises cost savings?

…and that drives the most efficient space utilisation

possible at all times?

Said differently, is your desk sitting empty right now?

We believe the most robust path to achieving

successful SWS programs is to:

1. Educate, gauge interest and identify concerns and

possible roadblocks

2. Build the business case

3. Design the implementation plan

4. Implement

5. Monitor for continuous improvement

REFERENCES AND RELATED PAPERS (1) CREIS 4, Jones Lang LaSalle (September 2005).

(2) “Workspace not so Hot”, BOSS Magazine

(July 2004).

(3) “Competitive advantage from better interactions”,

Scott C. Beardsley, Bradford C. Johnson, and James

M. Manyika. McKinsey Quarterly, 2006 Number 2.

(4) “Leap Into Future Space”, Fischer, Glenn quoting

BOSTI. February – March 2000..Building Interiors.

Source: Haworth, Thought Shift. 2000.

(5) “Global Workplace Trends”, Christine Barber,

Andrew Laing & Marilyn Simeone. Journal of

Corporate Real Estate (Vol 7, no 3) 2005.

(6) The Office Churn Research Report, FMA,

December 2001.

(7) Survey of US Corporates undertaken at Jones Lang

LaSalle’s Leading Edge events (2005).

(8) “Global Workplace Trends”, Christine Barber,

Andrew Laing & Marilyn Simeone. Journal of

Corporate Real Estate (Vol 7, no 3) 2005.

CONCLUSION There is a general recognition that while different

strategies are needed to address the requirements of

individual organisations, most companies are still at

a relatively early stage in their use of SWS initiatives

and more use is likely to be made of different

strategies, particularly those related to increased staff

mobility, over the next few years. The experience of

those companies who have embarked on the road to

smarter workplaces tell us that it’s really a journey

of successive small wins – and hopefully not too

many roadblocks – rather than a destination. Not

surprisingly, the lessons learned that they shared with

us were all about the journey, not about the physical

workplace results:

• Prepare a robust business case and clear projections

on the return on investment.

• Get senior-level buy-in.

• Know your staff and how they best work.

• Blend the SWS strategy with existing management

and workplace practices.

• Ensure new environments are pilot tested before

major program roll-outs.

• Train employees in how to use the new workplace

and new technologies.

• Create templates, guides and manuals to facilitate

process and wider implementation.

• Continuously refine and improve SWS.

• Communicate, communicate and communicate!

So how can organisations better utilise space and

capture value? Many already have some elements of

SWS in the workplace – the question is whether this

is being managed strategically to enable them to use

the workplace as a competitive advantage.

Is your organisation using SWS in a way that enables

you to provide flexibility for future changes in space

needs?


ABOUT THE AUTHORSCaroline Burns

In addition to heading the

firms Strategic Consulting team

in Australia, Caroline Burns

also leads the development of

Jones Lang LaSalle’s Smarter

Workplace Strategy capability

within Asia Pacific Region, and is one of the firms

global thought-leaders in this field. She is currently

undertaking research for a PhD within the School of

Business at the University of Sydney, analysing the

impact of corporate real estate on the competitive

advantage of organisations. Caroline has over

fourteen years consulting experience in corporate

real estate and workplace strategy and is passionate

about the value organisations can achieve by

aligning CRE with corporate strategy and leveraging

accommodation to address critical business needs

and issues.

More than ever before, your

success depends on the quality of

your decisions. As the global leader

in real estate services and money

management, Jones Lang LaSalle is

positioned to partner with you to

provide the quality advice needed

for making quality decisions. The

world’s best real estate intelligence

and knowledge base puts our

clients in the best position to make

the right decisions.

ABOUT JONES LANG LASALLEJones Lang LaSalle (NYSE: JLL), the only real estate

money management and services firm named to

Forbes magazine’s Platinum 400, has more than

100 offices worldwide and operates in more than

430 cities in 50 countries. With 2005 revenues of

approximately $1.4 billion, the company provides

comprehensive integrated real estate and investment

management expertise on a local, regional and

global level to owner, occupier and investor clients.

Jones Lang LaSalle is an industry leader in property

and corporate facility management services, with a

portfolio of 923 million square feet worldwide. In

2005, the firm completed capital markets sales and

acquisitions, debt financings, and equity placements

on assets and portfolios valued at $43 billion. LaSalle

Investment Management, the company’s investment

management business, is one of the world’s largest

and most diverse real estate money management

firms, with approximately $30 billion of assets under

management. For further information, please visit

www.joneslanglasalle.com.au

COPYRIGHT © JONES LANG LASALLE 2006 All rights reserved. No part of this publication may be published without prior written permission from Jones Lang LaSalle. The information in this publication should be regarded solely as a general guide. Whilst care has been taken in its preparation no representation is made or responsibility accepted for the accuracy of the whole or any part.

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Documents

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