Office space is shrinking. Companies have gone from the generous 500-700 square feet per employee in the 70-s to around 200 square feet today. Zappos allocates as little as 120 square feet to each employee.
Some organizations find ways to use their real estate even more efficiently by creating flexible workstations. Alcatel-Lucent, for example, accommodates 450 employees at 250 workstations and Credit Suisse uses 2000 workstations for 2500 employees.
This trend is set to continue… Of 500 corporate real estate executives surveyed by CoreNet, 40% indicated that they plan on reducing the space per employee to below 100 square feet by 2017. This sentiment coincides with the expiration of many 10-, 15- and 20 year commercial real estate leases signed back in the 90-s and 2000-s according to this USA Today article.
New leases are coming with significantly higher price tags. Companies that renew their leases are cutting the space by as much as 30% and execs are eager to make productive use of every square foot they intend to keep.
And although cost is a considerable factor, there is something else behind the diminishing space/employee ratio and perhaps it’s even bigger… “Some of it is economic,” says Norm Miller, PhD, who is a professor at the University of San Diego, Burnham-Moores, Center for Real Estate. “That is, companies realized they could save money by minimizing excess space. But I believe the single biggest factor driving this trend is technology. Now that we have moved to cloud-based file storage and can access our work from anywhere and it can be easily shared, workers no longer have to be tethered to an office to be productive. Technology is very much at the heart of this transformation.”
With nearly 5% of the workforce working from home and accessing “the office” virtually, the newly available office real estate is repurposed. Many employees work long hours and some make work their second home. Companies are finding that offering better amenities and new creative, collaborative spaces to these employees is helping them to attract and retain quality professionals, keep them satisfied and motivated and improve accountability and productivity.
“In my view, cost cutting is likely to go away as the good times return,” notes Stephen Siena, senior research analyst for Jones Lang LaSalle Americas Inc., “But the open floor plate will become the norm because of the heightened productivity and creativity it provides.”
While collaborating does not necessarily mean that your employees will be sharing their granola bars, it does mean that Mary’s clutter may be invading Joe’s space and you really, really need Joe to focus on being productive.
Bottom line is, smaller work stations should be minimalist, lean and efficient. A primary barrier to that is the paper clutter that tends to accumulate at every office. Just as the enormous computers of the decades past were replaced by LCD monitors and laptops, giant filing cabinets, copiers and scanners are replaced by smaller, efficient capture and storage devices and increasingly by cloud storage.
As companies migrate to online document management, they make their employees mobile, save money by letting go of the excess space or benefit from using it otherwise. Foosball table anyone?
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