London-Based Companies Waste £1.58 Billion in last 12 Months on Office Space Companies pay for empty desks that occupy some of the most expensive commercial real estate in the World.

With the increasing impact of wireless technology1 and flexible working, more and more executives are working out of the office for longer periods as City-based companies embrace flexible working strategies to get the most productivity from their workforce. This means their workspace is unused and left empty, but still needs to be managed and paid for.

In the past, only specialist workers – senior directors, auditors, consultants – spent significant periods away from the office. Now, all levels of staff in an organisation are working outside the office more often, with customers or business partners, either on the road, or working from home.

Figures from leading independent property consultants King Sturge put the total amount of floor space occupied in the Square Mile at 63.5 million sq ft (5.9 million sq. m)2. Latest research from Actium Consult, a highly regarded specialist in occupancy costs, puts the cost of a 10sq m (107 sq ft) workstation in the City, taking in rent, rates, furniture and services, at £8,936 per annum3.

Using this data one can calculate that there are more than 590,000 desks in the City and the average occupancy of an office desk is estimated at less than 40% of a working day, i.e. 60% utilisation which equates to a staggering £1.58 bn4 being spent on empty desks across the City in the past twelve months.

John Vivadelli, CEO of AgilQuest Corporation, a US-based company and global leader in desk sharing (or hot desking) software and other alternative workplace strategies, believes he knows what the challenge is. "We`ve talked with a score of FTSE100 companies over the past four months, and they are all worried about the cost of running empty space," Vivadelli says. "Their property and facility managers are being put under real pressure to make better use of existing resources, to free up space in order to rationalise the property portfolio or to grow without taking on any more space."

Vivadelli strongly believes the answer lies in managing real estate as a shared use asset, just as one would manage any other expensive resource. “Systematically measuring the actual use of every workspace gives management the same strategic information that airlines and hotels have used for years to manage every aspect of their operations. Without it, real estate management remains an oxymoron, because management demands measurement,” Vivadelli states. “The great news is this empirical data washes away the inhibitors to employing innovated workplace practices such as telework and hot desking. Now people can choose a desk whenever, wherever they need to work and the organisation benefits by dramatically reduced occupancy costs – a true win, win. But a simple change in policy won`t do the trick,” he warns. "Companies must put a well devised strategy and process in place first and then back it up with robust management procedures and technology tools."

Three elements are critical to success in desk sharing and other workplace improvements, Vivadelli says:

• Ensuring executive management commitment and continuous communications to employees of both the organisational and personal benefits;
• Linking and coordinating the technology, human resources, and real estate organisations and budgets to prevent suboptimal solutions;
• Implementing a workplace management system integrated with building infrastructure such as phone systems, security systems, and other sensors to accurately measure space utilisation and improve safety, security, and organisational resiliency.

With a joined-up approach like that, there are real opportunities to tap into under-utilised capacity, increasing occupancy effectiveness, improving working arrangements for staff and above all recouping the enormous financial waste from empty desks - surely music to any shareholder’s ear.