As it becomes easier and more acceptable for employees to work remotely, or at least work where they want within their offices, corporate real estate teams are struggling to keep up.
And that failure is expensive: the average employee spends a staggering 27 hours each year looking for the best space to work over the course of the day — costing the average company $31 million in productivity annually.
It is now far more complex for corporate real estate (CRE) teams to provide the right space for employees at the right time. Whereas previously the task involved providing each worker with a cubicle or station, CRE must provide a whole range of “meeting pods,” “quiet areas,” “hot desks” and networked canteens, among other things, each with enough space for employees to collaborate and work but without providing so much room that it bankrupts the company.
Unused Office Areas and Wasted Space
On the average day, half a company’s space is unused, with a typical cumulative impact of $15 million worth of waste each year. CRE executives aren’t satisfied with their work to combat this, with only 11% agreeing or strongly agreeing that they are satisfied with the use of space at their company, according to CEB data.
And this is because only slightly more than half of employees report having the right space available when they need it (see chart 1).
It’s clear that existing space doesn’t fit employees’ needs or their preferences. While some space might technically be suited for a certain type of work, that doesn’t mean all employees can complete that work to their best ability in that space.
Chart 1: Employees who are able to access the right space at the right time* Percentage of employees; n=813 employees Source: CEB 2015 Employee Workplace Mobility Survey
* – Right space at the right time measured as an index of the employee responses to the following questions:
- I have all the right types of space I need to perform well at my job.
- The space I need to perform well at my job is available when I need it.
- I have the right technology to use the types of space available to me.
Costs Are Piling Up
This $31 million cost of employees lacking access to the right space at the right time is undoubtedly significant. Not only is it equivalent to paying 250 employees to do nothing but look for space, the lost productivity amounts to 12% of the average annual total real estate cost per employee.
And that’s without counting the opportunity cost of not being able to productively contribute while looking for space. Or the average $15 million worth of unused space annually, which means CRE is wasting resources on space employees don’t use. Plus, as might be expected, having — or lacking — access to the right space at the right time affects employees’ overall satisfaction with the workplace (see chart 2).
While several causes contribute to this problem (see chart 3), most real estate functions can only makes changes in one area: making sure available space matches employees’ work needs. And while CRE teams are taking action in this area, the conventional solution isn’t working, as future posts will explore.
Chart 2: Employee workspace satisfaction Percentage of employees who say they are satisfied with their workspace; n=813 Source: CEB 2015 Employee Workplace Mobility Survey
Note: Differences are significant at a 99% confidence level.
Chart 3: What CRE teams are doing Source: CEB analysis