Are You Paying for Too Much Office Space?

Published December 24th, 2009 by Jennifer LeClaire

It’s one thing to pay too much for office space. It’s quite another thing to pay for too much office space. That’s the message that John Vivadelli, founder and CEO of Agilquest, Inc., a Richmond, Va.-based company that provides software and service solutions that help companies manage workplace operations, measure asset use, and make informed workplace decisions.

Vivadelli is also chairman of the Strategy and Planning Metrics Workgroup of the Open Standards Consortium for Real Estate (OSCRE) where he has participated in leadership positions since the the organization was first launched.

Vivadelli sat on the Board of Directors for ITAC (International Telework Advisory and Council) and led its acquisition and transition into the Telework Advisory Council for WorldatWork, the world`s leading not-for-profit professional association dedicated to knowledge leadership in total rewards, compensation, benefits, and work-life. He has also served on the Board of CoreNet Global’s Mid-Atlantic Chapter for three years and has attended CoreNet Summits for over ten years.

aBetterOffice.com sat down with Vivadelli to discuss what’s driving the transformation in office space usage, how technology is enabling the transformation, and why companies should fire their workspace before they fire their employees.

What is driving the transformation in office space usage?

The driving forces for workplace change include workforce demographic changes, increased need for collaboration, global competition, recession-driven cost-cutting, sustainability concerns, need for agility and speed to market, global competition and markets, pandemic concerns and business resilience, to name a few.

What is the key enabler for this transformation?

The key enabler for this transformation is technology, which allows worker mobility, which leads to increased traditional office vacancy, increased collaboration space as a percentage of the whole, and the increased use of “third places,” such as coffee shops, Wi-Fi-enabled restaurants, and so on.

Technology allows the activity called “work” to be separated from location – work is what you do, not a place you go. Workers today have all the means to effectively work from virtually anywhere. Laptops, broadband communications, cell phones, SharePoint, e-mail, and IM all allow workers to be highly productive without being in the office. As a result, more than half of all traditional office space goes unused during business hours.

I’ve heard you say you should ‘fire your workspace.’ What do you mean by that?

What we actually said was “don’t fire your people, fire your workspace instead.” Half of all workspaces go unused during business hours. An organizational asset that represents 25 percent to 30 percent of a company’s balance sheet but is actually used only 30 percent to 50 percent of the time cannot be considered efficient or effective.

No general manager of any manufacturing plant, distribution center, hotel, or refinery that operated their facility at 30 to 50 percent capacity would be allowed to keep their job, yet this is the norm for corporate real estate performance. The people are working effectively, but the real estate is not.

Consider what happens with a downturn in a business cycle as was the case over the last year: Organizations need to save money and the fastest way to do that is to reduce headcount. Now consider an organization that runs lean with their real estate, meaning they have taken advantage of their mobile workers by offering them a workspace from a pool of reservable workspaces. Under this scenario, they have reduced the number of workspaces – they “fired their workspace” – and are able to retain their people. They are saving tens of millions of dollars in real estate costs which reduce or eliminate the pressure to “fire the people.”

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