Room for manoeuvre

Beyond technology sales, providers should also consider the effect of real estate, says Paul Statham

Statham: Less office space means different technology needs

Under-used office space is being scrapped as companies look to cut costs. There is 7.8m square feet of office space lying empty in the City of London and 6.8m square feet still under construction.

Fewer UK firms can afford to invest in new premises. Many cannot keep up with the premium rates and some are even opting to vacate their prime locations in search of more affordable facilities.

At the same time, potential overseas investors are waiting for the market to plummet even further before investing.

However, companies that already occupy such premises, in the City or elsewhere, will be looking for ways to make the most of this space, to tighten purse strings and cut back on resources.

The days when large firms could afford to operate half-empty office floors have gone and companies will now ensure that every inch of real estate is put to good use.

For example, companies are increasingly looking to divest their real estate so they can function with less floors ­ vacating expensive floor space and making huge
savings on both rent and the cost of servicing the under-used space.

This cramming process means that desk cubicles will become smaller and more compact, housing less bulky computer equipment and flatter screens.

More significantly, companies have begun to embrace hotelling as a method
of supporting unassigned seating in an office environment. This allows
them to evaluate how much office space is being wasted and book a set amount of desks as and when employees need them.

The result will mean that companies could dispose of energy-guzzling desk infrastructure and reduce their expensive property overheads without having to make redundancies or cut staff levels.

An organisation in the City can pay as much as £9,510 per annum for 10m sq of desk space, taking into account rental costs, heating, electricity and ventilation.

With an average desk occupancy rate of 45 per cent in most offices, brought about by a migration to a flexible working environment, a company with 2,000 employees can waste more than £8m a year on unused desk space.

This figure becomes even more staggering among larger firms. Those with 5,000 or 10,000 employees can fritter away more than £21m or £42m a year, respectively, through low occupancy levels.

The channel could help its customers make better use of space and tailor their sales strategy accordingly.

Paul Statham is managing director of RNM Systems