How to cut occupancy costs and optimise value

07 November 2021    By  John Ortner  


Are you struggling to understand the value of your investments in the workplace?  Do you need more data on how your space enables better organisational performance?  

The first place to start is to look at your costs.  Whilst spend is a ‘lag’ indicator, it is data rich and provides a quantitative basis for broader discussion around cost and value.

We look at six elements of the value discussion. 

 

1    Physical environment 

Every occupancy is different.  What are the key physical influences that impact on the management of your space? 

2     Roles 

Each role has an activity and a cost.  What is your current spend for these roles? 

3     Service requests

Duplications in cost occur through double handling of workplace and facilities management roles.  Understanding your spending patterns enables work to flow quickly to the person best able to fix it.

Are you incurring more costs than you should?

4     Service standards 

How should the experience feel.  As if you've walked into an environment where everything runs like clockwork?

5     Desired outcomes 

What are you looking to achieve?  For example, visitors feel welcome and valued, space enables employees to do their best work 

6     Operating rhythm 

Pay for what you need.  Ensuring staffing levels match the operating requirements of the business. 

Now that you have gathered the relevant data, you should sort the data and commence a structured process to ensure you deliver a service that your clients' and team truly value.  To do this, we suggest you adopt a five-stage framework that places costs into buckets for analysis, understanding, and action.  The stages are:

Stage 1. Identify

Stage 2. Prioritise

Stage 3. Act

Stage 4. Analyse and synthesise 

Stage 5. Decide 

Stage 1: Identify 

The first stage is to break your costs into component parts.

  • Classify and separate the major components of your occupancy costs
  • Drill into the detail for each major component
  • Establish the five phases that impact each component – Physical environment, Roles, Existing workloads, Service Standards, and Desired outcomes

Stage 2: Prioritise 

If this process works for you, and you’d like our help, we’ll then assist you to identify the levers that are important, big, and movable.

Stage 3: Act

Having identified and prioritised the material components and levers, you’ll need to set yourself timelines and gather the data sets.  

Stage 4: Analyse + Synthesise 

Now’s the time to pull the information apart and put it back together in a way that identifies opportunities, solves (or avoids) problems, and delivers data for decisions.

Stage 5: Decide

This final stage is when you table your recommendations as a concise, compelling, actionable, and timebound Executive Leadership Team or Board paper on how to cut costs and optimise value from your occupancy.  

Key takeaway

This approach provides a robust framework for better understanding your investments in the workplace.  But remember, it’s only a paper.  You haven’t yet solved the issue.  Any problem-solving tool without a bias to action is a waste of time.  


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