The cost of flex-office: rhetoric and reality

The experts

Deployed on a large scale in various organizations, the flex-office “open workspace not partitioned, non-territorial (no workstation allocated per employee), divided into zones according to activities (open offices, meeting rooms, concentration, relaxation area) ”is chosen for different reasons: the main one is economical. Indeed, this workspace can accommodate between 20 and 40% more employees than a “traditional” workspace (Turner and Myerson, 1998). The second reason noted is that this space is generally created to support change (new organization, move, adherence to a different managerial vision, etc.), and the third is that this space is a solution taken into account to promote work team.

The first reason has been thoroughly researched with real estate experts. The idea was to understand the costs taken into account when implementing the Flex-office. Through the interviews, it was noted that it was mainly CAPEX and OPEX, respectively investment and operating expenses, which were considered in the composition of the cost of the flex office. And it is only with more investigation that the hidden costs emerge.

As the interviews progress, we realize that after moving in, there are apparent costs that were not taken into account when deciding to implement this space. Indeed our research identified 12 hidden costs that could distort the discourse and the perceived effectiveness.

These hidden costs, ranked in order of redundancy by the various interlocutors interviewed, are as follows:

• Absenteeism and malaise
• Loss of productivity and performance
• Loss of social ties
• Less commitment, satisfaction and attachment
• Creation of support services (to support flexibility)
• Implementation of new working methods
• Time lost by the employee
• Rethinking management methods
• Quality of collective work
• Lack of communication
• War of territories, struggle of places
• Adjustment costs

These hidden costs, both economic and social, go against the institutional discourse and can distort the pre-established calculation and the gain estimated upstream of the implementation. It has been shown by studies that when reality is out of step with what has been communicated, this creates a gap called “The Promise / Performance gap” (Van de ven, 2008) and it is exactly that. what was revealed through the identification of these hidden costs.

In addition to the identified hidden costs that could help make better estimates, the main takeaways for real estate players are:

• An in-depth study of employee needs, essential before any flex-office development project. If the need arises, if the business allows it, if the technology follows suit and if there is good support before and after implementation, the well-thought-out flex-office could be suitable for specific cases.
• A grouping of employees by mission or by department to facilitate the link between the teams, in order to avoid the hidden costs relating to the lack of communication and the loss of social ties.
• The integration of ergonomists can play a significant role in the convergence of professional demands, professional resources and worker well-being (De Croon et al., 2005).

For more information, link to the academic article:
Nappi, I. and Eddial, H. (2021), “Real cost of flex-offices: discourse and reality”, Journal of Corporate Real Estate.
https://www.emerald.com/insight/content/doi/10.1108/JCRE-02-2020-0006/full/html?skipTracking=true

Release date: June 2021