workplace analysis and improvement strategies
TRANSCRIPT
Workplace Analysis and Improvement Strategies
1
Mayor’s Office Presentation
November 3, 2015
Agenda
Problem/Challenge
• Study scope and approach
• Case for action
• Performance
• Benchmarks
Discovery
• Current state
• Employee feedback
Recommendations
• Workspace standards
• Space savings opportunities
• Process and policies
2
Deliverables
• Workplace Guiding Principles - future vision and
decision making framework
• New workplace standards
• Application of new standards to in-scope
buildings and departments
• 611 Walker
• 1205 Dart
• BRAC
• City Hall – 3&4
• City Hall Annex – 3&4
Goals
• Transform they City’s approach to workplace:
from a cost to manage down to a strategic asset
that enables high performance
• Holistic approach that looks the City’s general
interest, each department’s requirements, and
individual employee needs
Approach
• Study conducted April-November 2015
• Engage all department leadership
• Gather employee feedback and perspective on
organizational culture, goals and ways of working
• Assess current workplace utilization and
conditions
Scope and Approach
REAL ESTATE GENERATIONS UTILIZATION
City leases over 200,000 square
feet of office space while they have
vacancy in current office space.
Office space per worker is
shrinking, new federal standard is
170 USF/seat, City’s buildings
studied range from 230-350
USF/seat.
Large percentage of City
employees are eligible for
retirement
The workplace can be a key factor
in attracting the best talent for the
next generation of City employee,
keeping the employees you have
and facilitating the knowledge
transfer between the two groups
Industry-wide, workspaces are
typically only utilized 50% of the
time
Only 50% of work occurs in an
individual’s primary workspace
(Knoll)
Case for Action
4
Performance Focus
Solutions that focus only on real estate efficiency are missing the bigger opportunity - enabling individual and team performance and business success.
Performance for every dollar you spend on place, you spend $13+ on people
Wellness 25-35% of payroll can be attributed to poor employee well-being
Engagement employee engagement can impact profitability and productivity by over 20% 5
Benchmarks
170 170 180 190
200 200 200 210
225
288
0
50
100
150
200
250
300
350
City of San Diego New Federal Kin County, WA County of SanDiego
Napa County City of LosAngeles
County of SanMateo
City of Seattle City of Phoenix City of Houston(In scopebuildings)
Usable Square Feet per Seat
6
Discovery
7
Current Workplace Deficiencies
Space Standards
• 12 different space types, based on
entitlement
• Inconsistent application
• Lack of collaboration spaces
Quality
• Lacking natural light and views
• Large amounts of filing/storage, many
underutilized, lacking technology to
move to electronic storage
• Messy, cluttered workspaces
• Major infrastructure issues (Dart, 611
Walker)
• Building code issues (currently BRAC,
potential City Hall Annex) 8
Current Workplace Deficiencies
Vacancy and Inefficiency
• 2012 JLL GSD study showed overall
~17.5% vacancy rate and some
departments as high as 29%
• Usable area per person out of line with
industry averages
Technology
• Lack of mobile devices and infrastructure
to support mobility
• Inconsistent deployment across
departments
• No City wide move to a more paperless
office, individual departments with
separate initiatives
9
Current Process and Policy Deficiencies
• No functional space management system and alignment with IT
management system
• Run to failure, no regular investment in workplace upgrades
• Departments don’t see the cost of real estate
• Except at 611 Walker, where they’re charged rent – looks less appealing than
leasing space at another location
• Departments make changes to their space without GSD
• Space standards are outdated and not enforced
10
Increase Collaboration and Mobility
Employees want a cultural shift
towards a collaborative and
innovative culture.
Employees express a
significant desire to shift the
way collaboration occurs.
Strong leadership alignment to
technology decisions based on
future ways of working
+66% Virtual Collaboration
+52% External Mobility
+14% Variety workspaces
0
10
20
30
40
Collaborative Creative Competitive Controlling
City of Houston Culture Analysis
Current Desired
+5%
+4% -2% -7%
Workplace Priorities
Priority rank of importance to employees’ workplace experience
1. Provide the right tools and technology for employees’ to work efficiently and effectively.
2. Support employees’ physical and mental well-being.
3. Provide the appropriate space and technology to allow employees to work anytime, anywhere.
4. Support employees’ abilities to learn from co-workers and peers.
5. Provide employees with choice and control over how they work.
6. Be an incubator for collaboration.
7. Be responsive to changes in business and project structure.
8 Be a reason people come to work for the City of Houston.
9. Increase employees’ sense of personal connection to City of Houston and the broader organization.
10. Reflect the City of Houston’s culture.
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Workplace Effectiveness
Employee rating of current workplace on a scale from 0-5
Be a reason people come to work for the City of Houston. 2.38
Provide the appropriate space and technology to allow employees to work anytime, anywhere. 2.41
Increase employees’ sense of personal connection to City of Houston and the broader organization. 2.43
Provide employees with choice and control over how they work. 2.44
Be responsive to changes in business and project structure. 2.49
Be an incubator for collaboration. 2.65
Provide the right tools and technology for employees’ to work efficiently and effectively. 2.67
Reflect the City of Houston’s culture. 2.80
Support employees’ physical and mental well-being. 2.84
Support employees’ abilities to learn from co-workers and peers. 3.03
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Priority #3
Priority #2
Priority #1
Recommendations
14
Guiding Principles
Accelerate our
FUTURE focus
Foster all forms of
WELLBEING Exemplify our commitment
to LEARNING
Inspire results
through BALANCE
Reflect our SERVICE to
the community
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Structured Flexible Activity
Primary Focus: Accommodating the
individual needs and work processes.
Primary Focus: Providing a
responsive, adaptable platform
required by dynamic project teams.
Primary Focus: Empowering
individual’s choice and control over
their work settings.
Workplace Standards
MORE INDIVIDUAL SPACE
LESS SHARED COLLABORATIVE
SEATS PER PERSON
MORE SHARED SPACE
MORE SHARED COLLABORATIVE
SEATS PER PERSON
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Work Ways Assessment Results
Co
lla
bo
rati
on
M
ob
ilit
y
FOCUS
FACE TO
FACE
PLANNED
INTERNAL
IN
WORKPLACE
AT
WORKSPACE
JOINT EFFORT
VIRTUAL
SPONTANEOUS
EXTERNAL
OUT OF
WORKPLACE
AWAY FROM
WORKSPACE
17
Workplace Standards
160 180
200
238 266 [VALUE]
288 314
351
0
50
100
150
200
250
300
350
400
Activity Flexible Structured 611 Walker City Hall Annex City Hall City of Houston (inscope buildings)
DART BRAC
Usable square feet per person
18
Decision Matrix
The Decision Matrix is used to
determine a solution based on
specific project attributes.
19
Individual Workspaces
100% 80% 73%
60% 44%
30% 15%
20% 27% 40%
56% 70%
85% 100%
0%
20%
40%
60%
80%
100%
BRAC: HFD City Hall: DON DART CHA: Legal 611 Walker Structured Flexible Activity
Open and Closed Workspace Percentages
Open
Closed
.5x Open (30 SF) 1x Open (60 SF) 2x Open (120 SF) 2x Closed (120 SF) 4x Closed (480 SF)
20
Collaboration Spaces
Small Meeting Room Medium Meeting Room Large Meeting Room Small Open Space Medium Open Space
0.30 0.5
0.7 0.71 0.8 0.81 0.96
1.96
0.00
0.50
1.00
1.50
2.00
611 Walker Structured Flexible BRAC City Hall - DON CHA - Legal 1205 Dart Activity
Collaboration Seat to Individual Seat Ratio
21
Buildings • Applied Flexible Solution to all five buildings in scope
• 611 Walker
• City Hall Annex
• City Hall
• Dart
• Brac 22
611 Walker - Flexible
23
611 Walker - Activity
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Flexible
611 Walker
Flexible Savings
100,000 USF
24% USF
8 Floors
Activity Existing
Activity Savings
160,000 USF
39% USF
13 Floors
25
611 Walker
Flexible Activity
Department Current Seats USF Saved % Change Additional
Seats USF Saved % Change Additional
Seats
ARA 134 9,646 28% 53 14,374 41% 93
MCD 17 2,452 47% 14 3,355 64% 23
OBO 41 5,643 43% 31 7,533 57% 55
Finance 107 7,292 28% 39 10,064 38% 63
GSD 22 1,107 25% 7 1,294 29% 10
PWE 827 49,926 25% 263 79,672 39% 535
SWM 60 2,510 19% 14 4,774 36% 30
HR 148 5,380 17% 28 10,691 33% 68
HITS 186 4,010 10% 23 11,957 30% 75
PD 113 10,940 35% 61 14,749 47% 93
TOTAL 1655 98,906 24% 533 158,463 39% 1,045
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611 Walker – Example Cost Estimate
Potential to save 100-160k USF
$60-63M to renovate entire building
11-8 years to break even assuming,
• Fill vacant space with employees currently in
leased space @ 250USF/seat and $30 sf rent
Recommendation
• Create a phasing plan to renovate entire
building
• Move people from the basement to upper floors
• Use lower annex floors and basement as
Conference Center and filing/storage
• Lease any remaining vacant space to other
entities
Flexible Cost/USF USF Total
Tenant Build Out 60$ 400,000 24,000,000$
Furniture/AV 40$ 400,000 16,000,000$
Construction Cost 100$ 40,000,000$
Other Project Cost 20% 8,000,000$
Fees 15% 6,000,000$
Contingency 15% 6,000,000$
Project Cost 150$ 60,000,000$
Years to Break Even 11
Activity Cost/USF USF Total
Tenant Build Out 60$ 400,000 24,000,000$
Furniture/AV 45$ 400,000 18,000,000$
Construction Cost 105$ 42,000,000$
Other Project Cost 20% 8,400,000$
Fees 15% 6,300,000$
Contingency 15% 6,300,000$
Project Cost 158$ 63,000,000$
Years to Break Even 827
City Hall - Flexible
City Hall - Activity
City Hall Levels 3-4
Flexible Activity
Department Current Seats USF Saved % Change Additional
Seats USF Saved % Change Additional
Seats DON 16 366 21% 3 448 26% 5 Mayor's Office 10 7,407 65% 50 9,591 84% 61 TOTAL 26 7,773 59% 53 10,039 76% 66
Flexible
Flexible Savings
9,100 USF
59% USF
1 Floor
Activity Existing
Activity Savings
10,000 USF
76% USF
1 Floor
30
City Hall Levels 3-4 – Cost Estimate Example
Potential to consolidate Mayor’s Office
to 1 floor and consolidate DON
$2.1-2.2M to renovate 1.5 floors
5 years to break even assuming,
• Fill vacant space with employees
currently in leased space @
250USF/seat and $30 sf rent
Recommendation
• Implement first to set example
Flexible Cost/USF USF Total
Tenant Build Out 60$ 13,198 791,880$
Furniture/AV 40$ 13,198 527,920$
Construction Cost 100$ 1,319,800$
Other Project Cost 20% 263,960$
Fees 15% 197,970$
Contingency 25% 329,950$
Project Cost 160$ 2,111,680$
Years to Break Even 5
Activity Cost/USF USF Total
Tenant Build Out 60$ 13,198 791,880$
Furniture/AV 45$ 13,198 593,910$
Construction Cost 105$ 1,385,790$
Other Project Cost 20% 277,158$
Fees 15% 207,869$
Contingency 25% 346,448$
Project Cost 168$ 2,217,264$
Years to Break Even 5
31
City Hall Annex Levels 3-4
Flexible Activity
Department Current Seats USF Saved % Change Additional
Seats USF Saved % Change Additional
Seats
Legal 252 19,612 29% 107 29,333 44% 193
Flexible
Flexible Savings
19,612 USF
29% USF
1/2 Floor
Activity Existing
Activity Savings
29,333 USF
44% USF
3/4 Floor
32
City Hall Annex Levels 3-4 – Cost Estimate Example
Two options:
• Apply Flexible or Activity to Legal
• $10.7-11.3M
• 9-7 year break even
• 19,600-29,000 USF saved
• Capture existing vacancy and refresh space
• $5.9M
• 7 years to break even
• 15,415 USF saved
Recommendation
• Life safety and code compliance study to
validate cost estimates
• Re-evaluate options based on study results
and in context of overall City’s needs
Flexible Cost/USF USF Total
Tenant Build Out 60$ 67,022 4,021,320$
Furniture/AV 40$ 67,002 2,680,080$
Construction Cost 100$ 6,701,400$
Other Project Cost 20% 1,340,280$
Fees 15% 1,005,210$
Contingency 25% 1,675,350$
Project Cost 160$ 10,722,240$
Years to Break Even 9
Activity Cost/USF USF Total
Tenant Build Out 60$ 67,022 4,021,320$
Furniture/AV 45$ 67,002 3,015,090$
Construction Cost 105$ 7,036,410$
Other Project Cost 20% 1,407,282$
Fees 15% 1,055,462$
Contingency 25% 1,759,103$
Project Cost 168$ 11,258,256$
Years to Break Even 7
33
Fire Department
• Goal to move Jefferson personnel out of
leased space
• 171 people
• Jefferson lease: $1.3M
• Current Usable Workplace is limited at
buildings within scope
• Existing infrastructure in poor condition at
DART
• Life Safety and Code Compliance issues at
BRAC
• Multiple Options Studied:
1. Build-out existing workplace (limited
space)
2. Build out current warehouse space as
workplace (cost)
3. Build a new headquarters building at
Dart for Jefferson personnel
34
Dart
Flexible Current Seats Total USF USF/Seat Additional Seats (1) Existing Workplace 61 21,170 175 38 (2) Warehouse Buildout 61 36,278 172 119 (3) New Building 61 32,939 185 171 (4) New Building 61 50,519 182 266
Activity Current Seats Total USF USF/Person Additional Seats (1) Existing Workplace 61 21,170 153 80 (2) Warehouse Buildout 61 36,278 144 168 (3) New Building 61 25,421 149 171 (4) New Building 61 39,356 148 266
35
BRAC
Activity Current Seats Total USF USF/Person Additional Seats (1) Existing Workplace 34 13,378 143 58 (2) Warehouse Buildout 34 24,865 146 130
Flexible Current Seats Total USF USF/Seat Additional Seats (1) Existing Workplace 34 13,378 179 34 (2) Warehouse Buildout 34 24,865 177 101
36
Dart – Cost Estimate Example
New building on Dart campus
• Use new site for a Dart
Headquarters to accommodate
seats at Jefferson
• Building A at Dart remains the
same
Flexible Cost/USF USF Total
Core and Shell $ 160 37550 $ 6,008,064
Tenant Build Out $ 100 32939 $ 3,293,900
Furniture/AV $ 40 32939 $ 1,317,560
Construction Cost $ 322 $ 10,619,524
Other Project Cost 20% $ 2,123,905
Fees 15% $ 1,592,929
Contingency 15% $ 1,592,929
Project Cost $ 484 $ 15,929,286
Activity Cost/USF USF Total
Core and Shell $ 160 28980 $ 4,636,800
Tenant Build Out $ 100 25421 $ 2,542,100
Furniture/AV $ 45 25421 $ 1,143,945
Construction Cost $ 327 $ 8,322,845
Other Project Cost 20% $ 1,664,569
Fees 15% $ 1,248,427
Contingency 15% $ 1,248,427
Project Cost $ 491 $ 12,484,268 37
BRAC – Cost Estimate Example
Repurpose BRAC
• Renovate existing BRAC
workplace
• Build out warehouse as office
space to be used as inspection
hub
Flexible Cost/USF USF Total
Infrastructure $ 50 24865 $ 1,243,250
Tenant Build Out $ 60 24865 $ 1,491,900
Furniture/AV $ 40 24865 $ 994,600
Construction Cost $ 150 $ 3,729,750
Other Project Cost 20% $ 745,950
Fees 15% $ 559,463
Contingency 15% $ 559,463
Project Cost $ 225 $ 5,594,625
Activity Cost/USF USF Total
Infrastructure $ 50 24865 $ 1,243,250
Tenant Build Out $ 60 24865 $ 1,491,900
Furniture/AV $ 45 24865 $ 1,118,925
Construction Cost $ 155 $ 3,854,075
Other Project Cost 20% $ 770,815
Fees 15% $ 578,111
Contingency 15% $ 578,111
Project Cost $ 233 $ 5,781,113
Recommendations
Policy
• Establishment of policy from Mayor’s Office
• Adopt new space standards and empower GSD to enforce
• Use new space standards on all future workplace projects (remodel and new build)
• Implement “City owned space first” policy
• Institute City of Houston Workplace Strategy Committee
Space Management
• Dedicate technology and personnel resources for on-going space management
• Proactively identify under-utilized space and reallocate when possible to reduce
leased space
• Implement “charge-back” system so each department sees the cost of workspace
• Incentivize departments to save real estate cost by letting them use those monies for
internal purposes
39
Recommendations
Operations and Maintenance
• Develop refresh schedule for carpet, paint, furniture, A/V
Human Resources
• Investigate all forms of flexible work policies (telecommuting, space sharing, coworking)
• Evaluate existing flexible work policies and their adoption/use by departments
• Identify any roadblocks and changes needed to existing policies
• Align new policies with new workplace standards
Change Management
• Critical to fully realizing the benefits of a new workplace
• Develop change management plan to role out new space standards
• Include change management on all future workplace projects (scaled to fit the project scope
and degree of change)
40
• Implement new workplace policies
• Quantify and dedicate recourses (people and technology) to space management
• Identify early adopter departments ready and willing to make a change
Conclusions
41