The Space Challenge
With the Global Economic Climate demanding that all organisations – large and small – find savings through increased efficiency, the pressure on property and accommodation managers has never been greater.
A YouGov poll commissioned in March 2013 by Vodafone in the UK showed that business decision makers, who thought they could save desk space, estimated they could lose on average 46 desks (source Vodafone PR).
The Vodafone report summary commented;
“However, they vastly underestimated the value of those desks, citing an average saving of £441 per desk – not even 10% of the £5,746 average cost of a desk in the UK (source DTZ Research). In actual fact, based on respondents’ estimates of the number of desks they could lose, those businesses stand to save an average of £260,000 per year.”
The problem is even more acute in London, where the average cost of a desk in the West End and City is considerably higher at £11,789 per year (source DTZ Research).
In Local Authority, the NHS and other public sector organisations, our own studies – based on the results of OccupEye data and our experiences working with over 200 such authorities – suggest the problem could be much greater.
Whilst national averages derived from a range of sources put actual desk utilisation at 45-50%, the factual resultant data of numerous recent OccupEye deployments has put this figure as low as 35% in some cases.
With a 10% variance in utilisation worth approximately £575 per year, per desk, it’s not hard to see the benefits to an organisation in applying OccupEye as a means of collating the factual, true 1:1 space utilisation data that is required to drive cultural change.
Aside from freeing up entire spaces, an organisation with 500 seats could realistically realise a saving of £287,500 per annum, based purely a 10% utilisation step increase from 45-55%.
The facts are clear; Organisations have for too long been hamstrung by the lack of availability of usable and truly accurate space utilisation data, from which workspace strategies have been informed.
This culture of making ‘best guesses’ has led to significant and noticeable inefficiency that, compounded by the current financial landscape, is leading many to look for a ‘quick win’ way out of the financial black holes they face – often meaning staff cuts.
As a September 2012 report from Citrix spells out though, in the near future it will be space reduction rather than staff reduction that paves the way to sustainable efficiency.
The Citrix report states that by 2020, organisations are set to reduce office space by almost a fifth (17%) and that the average workplace will provide just 7 desks for every 10 office based workers.
Naturally, this cultural shift towards a far more flexible environment can only be made possible by redesign; Redesign of environments, and redesign of workstyles.
OccupEye fits perfectly within this vision, offering property managers access to the real-time space utilisation data that will be vital to planning these agile working strategies, identifying where weaknesses and surplus capacity exists, then intelligently matching these opportunities against the work patterns of potential occupiers.
These recent private-sector commissioned studies serve to add further weight to a scenario of inefficiency and opportunity for change that was notably highlighted in the 2011 “Leaner and Greener” reports, overseen by Communities Secretary Eric Pickles.
The reports, focused on UK Public Sector property, made a number of key comments and recommendations, some of the most striking excerpts from which are highlighted below;
Inquiry Chair, Matthew Hancock MP states in his foreword –
“This report shows the sheer scale of savings available to local government from better use of their property. Of the £370 billion of property owned by government and costing £25 billion a year to run, £250 billion is owned by local government. The findings show that managing property effectively can reduce the space needed by 30%, with potential savings in running costs of up to £7 billion a year.
The scale of the prize should not be underestimated.”
“Lowering occupied space will enable the public sector to lower its property running costs. The average space occupancy rate within the public sector is estimated at 14.5 m2 per full time employee (FTE). This figure is on average 20%-30% higher than the 2008 Government Space Standard of 12 m2 per FTE for existing properties. The report has found that public sector organisations can deliver up to £7 billion of savings from lowering the space it occupies and through cooperation in procurement.”
Following up, the Leaner and Greener II report states;
” The research also shows that there are huge incentives to plan space reductions alongside more flexible working practices.”