Hybrid Work Will Change Chargebacks & Space Allocation
We’re all aware that acceleration of hybrid work means much less demand for classical office space from users. At least in the short term. But what implications will this have for the remaining workspace? We talk today about the effects hybrid work will have on the workplace, specifically, chargebacks & space allocation programs.
Chargebacks, space allocation and workplace strategies
1. Fully Remote & Virtual First Strategies
For companies that have transitioned to Fully Remote, the need for space allocation has been eliminated. In this case, there is no office space to chargeback.
However, for Virtual First organizations, the office still serves a purpose and it would be wise to explore a flexible chargeback system to align with the new flexible workplace strategy. This is discussed further in point #6 below.
2. Hybrid Work Strategies
Many companies will have employees working remotely part of the week. From a chargeback perspective, business units can instantly appear more efficient as they downsize to fit the lower workspace demand.
Improvement on program flaws
3. Reducing bureaucracy
Let’s go back to part 1, where we discussed chargeback program flaws. Does the hybrid work phenomenon, resolve all the inefficiencies of chargeback programs? Potentially.
One area of disruption could be the reduced need to negotiate terms related to space cost allocation. This is due to another trend that’s grown out of the hybrid work evolution–the proliferation of utilization data. Utilization data is the where, when, and how office space users are working in the workplace.
With today’s technology automating the continuous tracking of space utilization, space cost allocation is made more accurate. Automation means there’s potentially less to negotiate and less workload required to process chargebacks.
4. Aligning incentives
Additionally, chargebacks & space allocation would no longer be based on rentable square feet (RSF) or headcount. Because these numbers were updated on an annual basis. Now, space cost allocation would be based on real people and real work habits. As a result, there would be more insight into departmental productivity. Workplace leaders could now make intentional decisions not only about workplace efficiency, but also workplace experience. Utilization data collected continuously becomes insights about valued space types, the right desk-sharing ratios, what is the new normal and more.
5. Reducing reporting inaccuracies
Finally, automated and more accurate data would mitigate the issue of workplace managers producing inaccurate reports for accounting and everyone hoping to never be audited. An additional effect of advances in utilization data collection, means we can now report on space usage at a much faster rate than before.
CBRE Global Occupancy Insights Report 20211 says 39% of organizations chargeback to their business units annually and 33% chargeback monthly. With office space utilization data available daily, hourly and live, it stands to reason that the amount of companies processing their chargebacks annually will reduce. With no need to wait for annual numbers or complex calculations, chargebacks could be carried out with quarterly or monthly accounting activity.
Hybrid-friendly program methodologies
6. Changes in program methodologies
There’s still a question of how methodologies will change as a result of the ability to assess actual space usage in real-time. What variable would represent space usage by which to make calculations? Would it be Average Utilization? Peak Utilization? Or Total Number of Hours Consumed?
What if the team didn’t use desks, but only collaboration space? Would they base chargebacks on headcount or utilization? Perhaps, the future of hybrid should be a subscription cost similar to coworking models. As with coworking space, business units could pay for a set number of workplaces, use the common areas within that subscription, but host a larger number of employees than workspaces due to desk-sharing ratios.
Flexible chargebacks, discussed above, depend on utilization measurements of users moving throughout the space. How do you make sure you are able to accurately track movement? For instance, to always have an up to date device inventory. Very tedious when you think that oftentimes companies can’t even pull accurate headcount numbers for a given location.
This issue can be mitigated by WiFi technology. Sensors, on the other hand, can only tell you if a person is occupying the space. They are currently unable to differentiate between a Finance employee occupying the space and an HR employee. Knowing which team members occupy each space is the key to more accurate cost allocation.
Explore Locatee Analytics
Locatee Analytics offers Wifi-based, continuous and accurate utilization data to assist workplace managers with decision making. Our newest product feature called Locatee Team Analytics offers insights about where and when teams work dynamically. Perfect for carrying out space allocation and chargebacks for a hybrid or flexible office.
At the end of the day, workplace leaders want to know how to maximize productivity in a hybrid work environment. You do it with data.
If you prefer to have one of our knowledgeable Locateers walk you through our product and how it would work for your particular organization while answering your pressing questions, request a demo.
1 CBRE Global Occupancy Report