As workplace strategists look for new ways to optimise operations and cut costs, real estate is an obvious place to start. Commercial real estate costs are rising year over year and this is especially true in New Zealand where the cost of construction is under pressure due to supply chain and labour market challenges. Given the average utilisation currently sits at 20%, it is no surprise that the latest trends in corporate real estate include infrastructure upgrades to maximize use of space, the addition of technology in the workplace to support hybrid and flexible work, and companies demanding flexible lease terms or the provision of serviced office as part of the building amenities.
With the growth in hybrid and flexible work, companies have begun to realise the impact of unused or under-utilised spaces on the bottom line. If employees are not using spaces as they were before, where should those funds be reinvested? How can spaces be reimagined to serve the needs of employees today, not employee needs and expectations from two or three years ago? Since trends and employee behaviours will continue to change, it is important for businesses to implement strategies that allow them to adapt with confidence. Companies can explore options like movable walls and multi-purpose spaces to stay flexible for the future.
The cost of poor space management can be exorbitant, especially for companies that do not have a definitive workplace management strategy. When facility managers, people operations teams, and leadership teams work together, they can improve the workplace to provide a better employee experience while reducing overhead costs on an exponential scale.
Let us consider what the situation look like for the average medium size New Zealand company:
If we consider the utilisation data we can draw the conclusion that wasted space represents in this scenario 78% of the annual spend of $11,934 per headcount per year. Now it is important to consider that 100% utilisation is probably not achievable however we can surely do better than 22%.