Memo bosses: There's money in space
The state government could save at least $13.5 million a year if it followed the private sector's lead and introduced activity-based working in its CBD offices.
The activity-based work (ABW) model - in which employees are given a laptop and locker but not a fixed desk - reduces a company's floor space needs, an efficiency widely embraced by large corporations over the past five years.
The shift to ABW extends a 20-year trend that has seen workspace ratios, the amount of space devoted to each worker, reduce significantly.
Some sectors, such as telecommunication workers, averaged as little as eight to 10 square metres a person, Savills Australia's head of research Tony Crabb said.
By contrast, state employees typically enjoyed a workspace ratio of 25 square metres, Mr Crabb said. In federal government departments the ratio was 12 to 15 square metres.
About 7100 Victorian government workers in Melbourne's CBD occupy 180,000 square metres in city buildings, estimates suggest.
A standard A-grade building has a workspace ratio of 18 square metres a head.
"Annual rent on 180,000 square metres of space would total in the order of $54 million based on a net effective rent of about $300 a square metre," Mr Crabb said.
Moving state government employees to more efficient premises would achieve a 25 per cent saving, a reduction of $13.5 million in the government's rent.
The government's target utilisation rate was revised in 2011 to 12 square metres a person, down from 15 previously, a government spokeswoman said. The ratio was now at 15.9. "This target and activity-based working design principles are being applied to all new office design and fit out projects."
Over the past year, the government had reduced the number of properties under management by 14 and reduced the floor space under those leases by almost 17,000 square metres, resulting in savings of $13 million, she said.
ABW typically requires about seven desks for every 10 workers but the change to the workplace is as much cultural - about collaboration and flexibility - as it is physical, exponents say.
Companies such as the National Australia Bank, Telstra, the ANZ Banking Group, Suncorp and Fairfax Media, owner of The Age, have all moved to activity-based working.
Other, smaller entities, such as business software provider MYOB are now starting to follow.
Jones Lang LaSalle's Victorian manager David Bowden said the ABW trend was likely to lose impetus.
At least 40 per cent of CBD offices were occupied by companies that were too small to benefit from introducing it.
Many larger corporates that were able to introduce it had already, Mr Bowden said.
"There is a cost implication in setting it up. You need a certain scale [about 3000 square metres] to get the efficiencies," he said.
The "jury's still out" on whether ABW was producing the workplace productivity gains promised by exponents and consultants.
"Has this actually delivered what it is intended to do? It has saved costs but has it resulted in productivity gains?" he said.
sjohanson@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
Activity-based working (ABW) is a workplace model where employees are not assigned fixed desks but use a mix of shared desks, lockers and flexible spaces suited to different tasks. According to the article, ABW reduces a company’s floor space needs and emphasizes collaboration and flexibility as much as physical changes to the office.
The article estimates that moving state government employees to more efficient premises using ABW could achieve about a 25% saving in rent. On 180,000 square metres of space (occupied by roughly 7,100 Victorian government workers in Melbourne’s CBD), that equates to around $13.5 million a year in rent savings.
Workspace ratio is the amount of floor space allocated per worker. The article cites ranges such as 8–10 square metres for some telecommunications workers, about 18 sqm per head in a standard A‑grade building, state employees typically at 25 sqm, and federal departments at 12–15 sqm. These figures show large variation across sectors and building standards.
The government revised its target utilisation rate in 2011 to 12 square metres per person (down from 15). The article says the actual ratio at the time was 15.9 square metres per person, and ABW design principles are being applied to new office fit-outs to meet targets.
The article lists several large organisations that have moved to ABW, including National Australia Bank, Telstra, ANZ Banking Group, Suncorp and Fairfax Media (owner of The Age). It also notes smaller firms such as business software provider MYOB are starting to follow.
ABW typically requires about seven desks for every 10 workers, reflecting shared workspaces and hot-desking rather than a one-to-one desk allocation.
Yes. The article notes at least 40% of CBD offices are occupied by companies too small to benefit from ABW, and there’s a setup cost that generally requires a certain scale (around 3,000 square metres) to realise efficiencies.
The article reports that while ABW has demonstrably saved costs, industry commentators say the 'jury’s still out' on whether it has delivered the promised workplace productivity gains. Some experts question whether the productivity benefits have materialised.
Call 1300 880 160
Start a chat
Schedule a call
