26/10/2011
At the start of 2011, according to Ofcom, 91% of us in the UK now own a mobile phone, 74% of us have broadband at home and 34% of us use our mobile device to access the internet. The growth in the smartphone market and predictions for the growth in this technology and revenues from “Apps” are expected to be exponential. Similarly the global cloud computing market is predicted to grow from $40 billion today to more than $240 billion by 2020.
With a massive take up in wireless technology and the availability of cost effective cloud computing technology offering, these, together, are redefining the office environment. The advancement in these technology areas allow us to work and access data and applications on virtually any device, anywhere, and at anytime. This is having a real impact on the way our clients are able to use their office space and contributing to a fundamental change in the way office space is used and analysed.
Reviewing how office space is utilised is critical to the process and the majority of surveys demonstrate that on average only 50 to 65% of desks are utilised at any one time. On this basis the opportunity for occupiers to introduce new working practices will have a significant impact on the utilisation of the office environment.
Through embracing this new technology, changing furniture layouts, flexible working, desk sharing and embracing a number of other initiatives that encourage flexible and mobile working – all other things being equal – occupiers can reduce their floor space by at least 10% to 30% from the existing footprint or accommodate staff growth to a similar amount without the need to relocate.
Real estate costs are usually the second largest cost to many companies and by undertaking a relatively modest spend on IT infrastructure and furniture, the potential savings on occupational costs (rent, business rates and running costs) can be substantial and have a extremely positive impact on the bottom line.
This focus on lease costs is only going to be reinforced as the International Accounting Standards Board (IASB) is revising proposals on how leases should be accounted for by listed companies and others that report under International Financial Reporting Standards. Under these new standards it is likely that an occupier’s obligation to pay rent will have to be accounted for as a liability on the balance sheet from 2014 when these standards are introduced.
Cost savings generated by implementing these new working strategies can be considered minimal however in comparison to increased revenues created by greater productivity, improved job satisfaction and increased staff retention by getting the working environment right. Smaller and smarter does not just have to apply to the phone in your pocket.
