Werk's research data shows structured flexibility responds to employees' needs around caregiving, health and wellness, and productivity—while making it easier for employers to attract, engage, and retain employees who are, in turn, more loyal and more likely to promote their employer. But structured flexibility affords another advantage to companies: a saving in real estate costs.
This is a pressing issue for many companies, considering the cost of commercial real estate is surging. According to the April 2018 CoStar Commercial Repeat Sale Indices—described as the market's first look at commercial real estate pricing trends through March 2018—the U.S. Office index increased 2.5 percent in the first quarter of 2018, contributing to a gain of 3.7 percent for the 12-month span ending in March 2018. In fact, the U.S. Office index has recently reached pre-recession levels.
At Werk, we used our proprietary data to measure employee interest in two of Werk's three location-based flexibility types: Remote (i.e. location independence) and DeskPlus™ (i.e. location variety). We found two potential areas of opportunity for companies' real estate use:
Reduction: According to our data, 78 percent of the workforce is interested in Remote flexibility. If companies bridged the flexibility gap for just half of these individuals, those companies could reduce their real estate investment by a third.
Optimization: Meanwhile, 84 percent of the workforce is interested in DeskPlus flexibility. If companies addressed the gap for just half those individuals, they could optimize a third of their real estate—by transitioning to hoteling, desk shares, and other alternatives to fixed workspaces.
With structured flexibility, the real estate savings can be huge. After instituting location variety, American Express enjoyed an increase in employee productivity and an annual real estate savings of $10–$15 million—as the company told Forbes contributor Jeanne Meister, partner at HR advising and research firm Future Workplace, in 2013.
Meanwhile, 14,500 of 35,000 people employed at Aetna as of 2013 did not have a desk, and another 2,000 worked remotely a few days a week, meaning 47 percent of Aetna's workforce used location-based flexibility. That flexibility saved the company 2.7 million square feet of office space and $78 million of annual real estate costs, Meister reported.
Those companies' success stories aren't the only ones: During its remote work program, IBM reduced its office space by 78 million square feet and sold 58 million of those square feet for a gain of $1.9 billion. And just by letting 15,000 of its 17,000 employees work from home two days a week, Sun Microsystems saved $68 million per year on real estate costs. According to a 2011 white paper from Citrix, for each employee who works remotely at least half the time, the potential savings to a company is $10,000 per year. And IBM's pilot program showed that remote employees can be up to 50 percent more productive.
In addition to our standardized system of flexibility, we have the first and only people analytics platform that measures and analyzes flexibility needs across your organization. Visit werk.co/product for more information.