Saving office space costs

This material has extracted from material published on the Canadian Telework Association's web pages (http://www.ivc.ca/part11.html).

As the use of telework increases and with average teleworkers spending two or three days per week away from the regular office, the resulting empty office space can easily be rationalised by desk-sharing (“hot desking”) or other office-space strategies. This can result in significant savings.

If you factor in common areas (hallways, meeting rooms, washrooms, parking, etc), the average per-office cost savings in many Canadian cities can reach US$6000 a year.

With planning, organisations can save the equivalent of about one office space for every three teleworkers. Doing the arithmetic, a medium-sized organisation with 100 teleworkers can save some $200 000 annually just by cutting 30 offices. And that's in addition to the other significant savings that telework brings to the organisation.

These practical case studies illustrate the savings possible:

Using telework, AT&T was able to reduce its office-space costs by 50 per cent. Alice Borelli, director of federal government affairs at AT&T, estimated that since 1995, the company had saved US$500 million in office lease costs by promoting telecommuting. In 1998, about 55 per cent of the company's 900 managers telecommuted at least once a month, she said.

Telework allowed IBM to drastically reduce the need for office space and save US$56 million per year across the company. After two years with telework the company negated the need for two million square feet of office space.

Pacific Bell saved about US$20 million over five years.

Sage Research reported that 30 per cent of corporations with telecommuters agreed that having telecommuters helps reduce real estate costs.

Merrill Lynch reported saving US$5000 to $6000 for each office space eliminated through the use of telecommuting.
The Texas Workforce Commission Appeals Department reduced the required office space by 1,824 square feet by having 19-22 attorneys telecommute.

Georgia Power reported a savings of $100 000 annually, with office space needs reduced by two-thirds.

Of Nortel's 13 000 teleworkers, 4000 no longer need dedicated office space in a Nortel building. Overall, telecommuting allows the company to save US$20 million dollars a year on real estate costs — equivalent to two 20-story office buildings of 40 000 square feet per floor.

The Canadian Government saves millions from using telework in conjunction with hot desking and other innovative office strategies.