04 CASE STUDY #2

Summary

A large consumer goods company is planning to expand their headcount by 20% over the next five years. However, the organization is expecting that advances in their industry could allow them to be more efficient in the future and require less employees in five to ten years time. They are currently 16 years into a 20 year lease at their headquarters building in the suburbs of Boston. They occupy 1 million square feet with a headcount of 5,000. Currently 10% of their space is vacant. Their current workplace standards include 8’x8’ cubicles and 150 sf offices along the perimeter. Their current vacancy can handle 5% of this headcount growth based on their current workplace standards. This headcount growth will be a mixture of contractors and employees within each of the organization’s 15 departments, and each department is expected to grow at different rates

Client Goals

• Increase space utilization while meeting both

• present and future needs

• Operate more efficiently and reduce costs

• Streamline administrative and infrastructure support

• Accelerate the adoption of industry best practices in the workplace

• Spur additional innovation

Challenges

• Provide real estate strategy based on various scenarios and identify relevant opportunities and challenges

• Provide recommendations/ optimal solution

• Propose draft schedule for implementation

Methodology

1. Task Analysis

Identify client goals and challenges

2. Define Parameters

Understand different solutions from similar companies Workplace Innovation

3. Scenarios and Alternatives

Provide varying scenarios with opportunities an challenges

4. Recommendation And Implementation

Propose the most effective solution and strategy to achieve the client’s goal

Increase Space

Acquire Satellite Offices

Lease more office space in proportion to headcount growth

• Sign a shorter lease

• Flexibly to increase space in proportion to individual department growth Have more presence in different locations

Can hire new employees depending on location

• Lack of cross-pollination if satellite offices become too silo'd

Increased acquisition/ leasing costs

Acquire Space in the Same Building

Increase floor area in the same building

Sign a shorter lease

• Proximity to established office space, sense of familiarity

Less disruption of ongoing workflow and labor input for scouting new locations

• May be able to negotiate better terms as an add on

• Dependant upon space availability

Relocation

Doesn’t renew lease upon ending

Relocate to a new area with strategic proximity

• Opportunities to relocate to urban center to attract more talent

Starting fresh in a new location can help staff feel energized and excited

• Invigorate work performances

• Moving and closing costs

• Speed of relocation

Time to adjust to new environment

Open office plan Conference/meeting booth for booking

• Cluster office

• Hybrid office

• Better communication

• Create a more efficient work

Encourage cross Space becomes adaptable

• Tenant improvement expense Staff relocation construction

Acquire Satellite Offices While Expanding

Assumptions: the company will expand in the next 5 years and all employers will return to office full time

Establishing short-term satellite offices in the city center will provide flexibility and accommodate for the different growth rates of different departments

Short-term rental will also help attract talent and allow the company to build more presence in different locations

How Can We Make the Transition Smooth?

Leading up to the big move, the office can communicate such change to the employee and listen to their concerns and questions about the move. Polls and surveys can be used to gather information and preferences on location and transportation subsidy .

Lease Ends

Relocate to an Urban Setting

Assumptions: New talent will flock to city center to work

As more new talent flock to city center to work, relocating to an urban setting, upon the lease expiration, presents many exciting opportunities. After 20 years in the same space, a new office space will inject fresh perspectives and bring the company in strategic proximity to talent pool, amenities, competitors, and potential investors, thus encouraging healthy competition, invigorating innovation, and providing re-branding opportunities.

To increase space utilization for present and future needs, the new office can occupy less square footage with more compact and efficient office layout, thus allowing for a better building in a better location for less money