I find it amazing how many workplace experts start coming out of the woodwork the moment the topic of the “open workplace” is mentioned. Data and studies are thrown around to prove that it is a communist plot to bring down corporations from the inside. Somehow, companies world over have forgotten that they need to think of their employees and are now deciding to simply throw the baby out with the bathwater! Who cares about long-term profits, there are short term gains to be had!
It’s easy for us in the industry to get a bit bent out of shape on the topic as well. No workplace “trend” from the past 30 years has been well received by those who have to live in the workplace. Cubicles were the first downfall for humanity. But somehow half-height cubicles were worse. But those were even worse than no wall cubicles…..
You know what, reading that little trend out loud to myself gives me a reason to think that employees may have a general point. The direction of most real estate decisions has been to cut, cut, cut. But can you blame companies? Much like residential real estate prices, commercial real estate prices seem to defy gravity. If corporations had simply accepted increasing annual costs without fighting back, they could easily be spending $25k per year per employee just on real estate costs.
Metrics vary but the average US corporate real estate benchmark runs somewhere in the 200 square feet (rentable) per desk range which includes a good deal of the open plan space. At $25 per square foot annual rent costs, that comes out to a quick $5,000 per year per desk. Double it to account for ancillary costs, facilities, supplies, technology – $10,000 per year per desk. Throw a 30% vacancy rate on that and you are up to $14,000 per person. That’s not New York prices. Back twenty years ago, double that again to 400 square feet per desk and you’re up to $25,000 in a downtown, tier 2 city for each person.
This leaves company leaders with a dilemma. In a 100 person office, at $14,000 per person, they are running a real estate cost of $1.4m every year. Even moving slightly toward open office and reducing that cost 20% gives them an immediate $280k every year toward profits or hiring another person or investing in R&D. Many open offices get more savings than that. Multiply that over many sites, and there is real money that goes back to the business. That’s just the cold, hard finances of the situation.
But we all know, real estate is a cost center. If our people aren’t productive in the office, hiring an extra 5 isn’t suddenly going to make the business better. First rule of real estate is not to kill workplace productivity. This brings us back to those studies that get bandied about. What those studies, usually, leave out is the fact that more and more employees are working from places outside the office more and more. In the US, you can see 50% of employees working outside the office 50% of the time. This is independent from the type of workplace they are in. Raise your hand if you have worked from an office that was supposed to have 100 people in it but any given day only had 50. It’s becoming the rule more than the exception.
So in the face of both the financials and the fact that employees are claiming increasing workplace independence, companies can choose to pay for empty desks sitting around for those Tuesdays when Joe decides to show up or the Thursdays when Lauren is in the office. Or they can design the workplace around what the typical work week looks like for the overall workplace population.
This is where I throw in my many caveats to all this. Building a good workplace takes a lot of time and effort. Regardless of whether it’s open, agile, all office, assigned cubicles or standup pinball machines, a workplace should be designed for how people work. Unfortunately, too many workplaces are designed without taking the time to understand this element. Those workplaces are the ones that give the rest a bad name. But the secret is that those would be bad workplaces regardless of the “trend” they leverage.
I’ll also stop to throw out that there is also no one “global” workplace. People work differently around the world. Trying to bring a US workplace to Japan would lead to insanity. Scandinavians do not work the same way as the French. A Brazilian workplace will be different than an Australian workplace. Anyone who tries to think differently hasn’t taken the time to understand that regional culture plays a huge role in productivity.
There is no perfect workplace. Individuals have different work styles. They want different things from the office. They value the little things differently. Building to a model view of the world, even in a small office, is impossible. But at the same time, building to a specific view of productivity is cost-prohibitive and just as likely to fail (because tomorrow isn’t going to look like today).