Staying competitive is a major focus for businesses across all sectors. Today, a growing number of executives appreciate that their workplace can be instrumental in talent attraction, cost control and risk management – all factors that aid in getting ahead of their competition. These executives are less content to settle for the status quo; they are challenging the assumption that rent is a fixed cost – yet they think in terms of upgrading the work environment, not downplaying it, as they perceive value in employees who are truly engaged in their work. So how should facilities and real estate managers update their workplace strategies to help create a competitive edge for their business? This blog shares three impactful actions for real estate executives to launch in 2020 and beyond, drawing on the latest Verdantix insights, industry research and real-life case studies.
Use workplace apps to improve employee experience across the entire building portfolio
Talent attraction and retention are coming into major focus across all sectors following a 10-year run of economic growth and low unemployment rates. As well as reviewing financial compensation, employers need to make sure their workplaces meet the expectations of today’s graduates and experienced hires. While most firms can afford to develop a cutting-edge headquarters, the tougher challenge is enhancing employee experience across a full building portfolio. How should real estate executives approach this challenge?
Real estate managers should start by improving employees’ control of their workplace conditions. This is a top priority according to a 2019 Harvard Business Review study, which draws on hundreds of interviews with workers. Specifically, firms should explore the business case for rolling out workplace apps and digital workplace assistants to employees. They are easy to deploy at scale and help occupants to access workplace services and provide constant feedback. Firms should explore workplace engagement apps from IWMS providers and specialist software vendors which are hitting new levels of market acceptance and price points.
Tap into technology innovation to improve space management
According to the Verdantix survey of 304 firms, 91% of real estate executives acknowledge their firm’s building portfolio is bloated and are making space efficiency a major strategic focus. As space has been undermanaged for many decades, space efficiency represents a multi-million-dollar opportunity for firms to explore. For example, the New York City government is saving $19 million in annual occupancy costs after right-sizing its portfolio, while PwC anticipates it will save £30 million over 10 years by consolidating four UK offices into a single facility.
There has never been a better time to act on space management. Today an entirely new generation of technology tools are available, making space management easier and more effective. For example, analytics software and sensors can automate the collection of utilization data and provide deeper visibility of space usage throughout the day. This granular data is critical to answering key questions such as: What are the optimal desk-to-people ratios? What space can I most easily release from my portfolio? Verdantix analysis of space management projects show that software and sensors are key to underpinning programmes that drive a 20% saving on real estate operating costs.
Start planning for economic changes
Throughout history,there have been recurrent booms and busts of economic activity. According to the 2019 Fortune 500 CEO Survey, 95% of CEOs anticipate there will be a recession sometime between now and the next four years. Real estate leaders must start planning for this. They need to ensure they have a full picture of their building costs spanning rent, utilities and maintenance so they are ready to launch powerful cost control strategies.
Firms should centralize their data into a single real estate software platform such as an IWMS or property management solution. Other strategies to consider are bringing more flexibility to the real estate portfolio by pushing for shorter-term leases and more break clauses in new property agreements.
New York City Case Study
The New York City government saved $15 million in annual rent and $4 million in energy expenditure by shrinking its footprint by 400,000 square feet.
After gathering data on space utilization, the city government found 14% of desks were vacant, employees were using over-sized workstations and space was wasted for storage.
The government released valuable office space in lower Manhattan and Brooklyn and redesigned offices to increase desk density.