HR’s place at the table of real estate and office planning is becoming demonstrably necessary
In my experience with designing workplaces, it has always been a pet peeve that HR is rarely at the decision-making table. In any workplace planning project there’s a large number of players including internal real estate staff, IT staff, project managers, designers, engineers, move coordinators and contractors. But where is human resources? A company’s HR staff is its untapped resource in the real estate and design phases of creating workplaces. As with so many of these questions, the answer lies in the evolution of real estate departments and their metrics.
Historically, the physical workplace is considered part of a company’s real estate assets. As such, its management has been isolated from day-to-day operations. Any changes, expansions or contractions of this asset impact a company’s rent and has a direct impact on the bottom line. A whole industry has developed to address the need to manage costs while allowing accommodating flexibility for future change. What often gets forgotten are the people who underlie most business success. According to Vivian Loftness of Carnegie Mellon University, rental costs typically represent only 10% of salary costs. Therefore, a 1% improvement in productivity is equal to a 10% decrease in rent. Conversely if a real estate decision saves a company 5% on rent, but reduces productivity by 1%, the actual impact is like a 5% rent increase.