Sydney, 7 October 2015 – While many Asian countries have driven static workplace densities to the limit or beyond, Australia remains in a much more enviable position according to a new CBRE report.
CBRE’s study, Space Utilisation: The Next Frontier, examines how companies can use workplace density and utilisation data to drive efficiency and business performance.
The report highlights that static workplace density has halved in certain Asian markets over the last decade. In Hong Kong, India and China, workplace space has shrunk from 100 sq. ft. per desk to 50-60 sq. ft. per desk. This figure is nearly half that of Europe and the US, where density norms are around 150-200 sq. ft. per desk. Elsewhere, in Australia and New Zealand, standards remain more generous at around 90-150 sq. ft. per desk.
The report indicates that in many parts of Asia, the reduction in densities has already reached a point where further reductions will impact productivity, performance and retention.
CBRE regards below 60 sq. ft. per desk as a clear productivity danger zone; reducing space below this level places staff productivity, performance and retention at risk. Even at 60-100 sq. ft. per desk, there are risks that not all aspects of work are fully supported, particularly knowledge-based work.
There are, however, alternatives that will allow firms to balance the pressures of cost and density.
“In order to drive space efficiency and business performance, we propose organisations to implement new and dynamic ways of working, including more focused and more collaborative settings that are easily accessible through enhanced employee mobility within the workplace. This will drive down costs per person by optimising the utilisation of work settings,” commented Peter Andrew, Director of Workplace Strategy, CBRE Asia.
CBRE’s Pacific Director of Workplace Strategy, Matt Strudwick, said the report provided some interesting statistics and data for the Australian market given that many organisations were continuing to look at their workplace strategy to support employee productivity, attraction of the best talent, and servicing clients while containing costs.
“The report provides fuel to the fire of those looking to reduce these costs as Australia has some of the highest densities in the Asia Pacific region. Couple this with some of the highest costs (within the CBD’s of major cities) and there is a natural desire to reduce the footprint of an organisation,” Mr Strudwick said.
In considering density targets and planning for the future, Mr Strudwick said it was important for organisations to remember the purpose of their workplace – typically, to provide an environment for their people to be as productive as possible.
“Given that the cost of employees is typically the highest expense line on an organisation’s books, it is important that any decisions on real estate savings are balanced with any potential costs that might flow from the ‘squeeze’ of employees. These costs come in the form of productivity, turn over, and an inability to attract the right talent,” Mr Strudwick noted.
“Because the Australian market is generally more mature and the employee cost equation is well understood, there hasn’t been a rush to the bottom – rather Australia finds itself in the enviable position when compared to the rest of Asia, and even in some parts of the US economy, where we can have our cake and eat it too.”
Mr Strudwick said Australia’s work culture had developed to the point where the adoption of flexible work models and enablement of employees through technology had driven the need for space down, while driving up the focus on productivity and talent attraction.
He also warned that thinking about space utilisation in a static way was short sighted for organisations planning for the future of their business.
While lease terms are typically five to 10 years, Mr Strudwick said organisations were driving more and more of their non-core business activities to project teams utilising short term resourcing.
This meant that the demand on an organisation’s workspace - being the headcount it had to accommodate - moved significantly over a 12 month period.
“The next frontier of space utilisation planning for organisations in Australia is focused on utilisation ranges,” Mr Strudwick said.
“What it is the maximum utilisation the space can achieve for short bursts to enable the business to flex and gear up around key milestones and what is the minimum level to warrant the expense and ensure the productivity of the people working within the space? How are we utilising the workplace to achieve the most productive balance between collaborative, individual, and focused work? How are employees enabled and encouraged to mix their time between ‘the office’, working from home, and third spaces such as client sites, shared workspaces, or even the beach.”
For Australian/international news or global stories, follow us on Twitter. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com. About CBRE Group, Inc.
