Workplace Analysis and Improvement Strategies

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.

12

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

13

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

15

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

16

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

24

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

26

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$



Fees 15% 6,300,000$


Project Cost 158$ 63,000,000$


City Hall - Flexible

City Hall - Activity

City Hall Levels 3-4

Flexible Activity



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


Tenant Build Out 60$ 13,198 791,880$

Furniture/AV 40$ 13,198 527,920$


Other Project Cost 20% 263,960$

Fees 15% 197,970$

Contingency 25% 329,950$

Project Cost 160$ 2,111,680$



Tenant Build Out 60$ 13,198 791,880$

Furniture/AV 45$ 13,198 593,910$


Other Project Cost 20% 277,158$

Fees 15% 207,869$

Contingency 25% 346,448$

Project Cost 168$ 2,217,264$


31

City Hall Annex Levels 3-4

Flexible Activity



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


Tenant Build Out 60$ 67,022 4,021,320$

Furniture/AV 40$ 67,002 2,680,080$



Fees 15% 1,005,210$


Project Cost 160$ 10,722,240$



Tenant Build Out 60$ 67,022 4,021,320$

Furniture/AV 45$ 67,002 3,015,090$



Fees 15% 1,055,462$


Project Cost 168$ 11,258,256$


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


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


Core and Shell $ 160 28980 $ 4,636,800

Tenant Build Out $ 100 25421 $ 2,542,100

Furniture/AV $ 45 25421 $ 1,143,945


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


Infrastructure $ 50 24865 $ 1,243,250

Tenant Build Out $ 60 24865 $ 1,491,900

Furniture/AV $ 40 24865 $ 994,600


Other Project Cost 20% $ 745,950

Fees 15% $ 559,463

Contingency 15% $ 559,463

Project Cost $ 225 $ 5,594,625


Infrastructure $ 50 24865 $ 1,243,250

Tenant Build Out $ 60 24865 $ 1,491,900

Furniture/AV $ 45 24865 $ 1,118,925


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

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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

Workplace Analysis and Improvement Strategies

Documents

Transcript of Workplace Analysis and Improvement Strategies