ST. PAUL — The economy is supposedly on the mend, but companies continue to look for opportunities to trim expenses.
Businesses are still as committed to cost-cutting as they were during the Great Recession, despite rising revenues, according to a study by the consulting firm Deloitte.
Some companies are examining their commercial real estate footprint as a potential cost to cut.
Businesses increasingly are moving away from individual offices and high-walled cubicles to more open environments. When they fit more people into a smaller space, they can slash their rent costs.
"If you can save a dollar in cost, there’s no additional revenue that needs to be produced and it can fall right to the bottom line," said Dennis Panzer, the managing principle of Cassidy Turley, a commercial real estate services firm. Panzer said that for several years companies have been assessing their space needs and trying to cut waste.
The average worker had 90 square feet of office space in 1994, according to the International Facility Management Association. By 2010, it was down to 75 square feet.
"The way we say it our office: if you show me one company that’s expanding I can show you five that are downsizing," Panzer said.
His company is among those shrinking. Cassidy Turley cut its rent payment by half when it moved recently into a new, smaller space in Minneapolis.
In the past, all the key workers at Cassidy Turley had their own offices; support staff sat in cubicles. Now, only three executives have offices.
The rest sit in collaborative, team-based workstations without there any cubicle walls to block out sound. Instead, a special sound system emits white noise as a sonic barrier.
"If there’s a conversation going on ten feet away from you, that noise will be muffled, in a way that you can’t make out what they’re saying," Panzer explained.
But even with white noise, nearby conversations can create cacophony.
Cassidy Turley makes a few small rooms available for private conversations. But the workspace is geared towards openness.
"I think it’s a terrible mistake," said attorney and author Susan Cain, an outspoken critic of collaborative work environments. She said they are overused.
"We’re throwing everyone out into these big open plans, where there’s very little respite from the noise of other people around you, from the gaze of your co-workers, from the interruptions of your co-workers."
That’s a bad idea, Cain said, considering that many people are more productive working in quiet environments.
Her solution? Companies should have a healthy mix of collaborative and quiet spaces.
Jeffrey Pfeffer agreed. The professor of organizational behavior at Stanford University said that companies should not feel compelled to remake their offices into collaborative work environments to please younger workers.
"There has been a lot of research that shows contrary to what people believe, you actually can’t multi-task," Pfeffer said. "And millennials are no different from the rest of ordinary human beings in that this sensory overload is actually distracting."
Still, the team at Cassidy Turley is committed to their collaborative work environment. Mark Sims, senior vice president, said he gets a charge out of working elbow to elbow with the team he oversees.
"This is a business. You need to get up for it," Sims said. It’s like going to the gym and seeing other people doing it — there’s an energy that you pick up on."
Not all workers will thrive on that energy the way Sims does.
But for their employers, the financial benefits of shrinking the office footprint may be too good to resist.
Article by Annie Baxter of Minnesota Public Radio