Posted On Monday, 31 March 2003 02:00 Published by
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Larger companies with poor space configurations are losing millions annually through reduced productivity, says Michael Schirnig, head of Corporate Real Estate Services at Old Mutual Properties.

Larger companies with poor space configurations are losing millions annually through reduced productivity, says Michael Schirnig, head of Corporate Real Estate Services at Old Mutual Properties.

Schirnig whose division looks at real estate as a vital vehicle in corporate strategy, says it’s reasonable to expect that where current space configuration is impeding communication and deflating staff morale, this will result in 30 minutes of lost productivity per day, per employee.

“In an eight-hour day, employees would lose 6 percent of their time. And if the employee's total cost to company was R250 000, the productivity loss would be more than R15 000 per year. Naturally, in the case of higher salaried employees who generate revenue, the lost productivity comes with a much greater price tag.

“On the other hand, consider the nominal investment of moving individual staff to other locations—a one-time cost of

R1 000 to R2 000 per work station.”

Schirnig says  empty, unstructured space can become a liability when it creates an inefficient, demotivating environment.

“In addition to the changes in space, business drivers and goals change as well. In response to these changes, companies need to be proactive; they need to reshuffle their space—find the best use for the properties they manage—to realign with changing or adjusted business drivers.”

Relocation and remodelling of space can benefit a company way beyond mere rands and cents, says Henry Barenblatt, CEO of  Research Surveys, South Africa’s leading market research company in the listed Adcorp Group.

Research Surveys mandated Corporate Real Estate Services to find new premises for its Cape Town head office after rapid growth had seen operations spread into several buildings. 

“The main benefits of our relocation last year into a single office block and of now having space as open plan as possible are what we call more face time, more interaction between staff, and incredible flexibility. That translates into greater commitment, loyalty and in helping to create a fun place in which to work, a crucial element today.”

Barenblatt says it’s difficult to quantify the benefits of open plan flexibility and of improved communication, cross-functional productivity and shared learning. “But, in an idea-intensive industry like the research field, they are substantial.”

Schirnig says companies should  consider how reshuffling of space can help operations regardless of the economic climate.

He says the recent move of various business units of a financial services company from 12 separate locations into one regional headquarters campus in Sandton, coupled with better planning and use of  more space efficient furniture, reduced the average space usage per person by 20%, saving the firm over R1 million per annum in rental costs.

“During the current period of slower cycle times, companies should take the time to reorganize and benchmark their operations against competitors in their industry. During economic upticks, you should consider subleasing and right-sizing.

“In any event, think of reshuffling existing space as a key element in a strategic plan. That plan is the first of three phases in the life of a typical project (preceding site selection and project management), but it gives you the greatest opportunity to save a significant amount of money. “


 ISSUED FOR: Old Mutual Properties

BY Michael Kerkhoff & Asssociates

INQUIRIES Michael Schirnig 021-530-4561

                Henry Barenblatt 021-657-9500

                Mike Kerkhofff 021-424-5280 

Publisher: Old Mutual Properties
Source: Michael Kerkhoff & Asssociates

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