What criteria should be taken into account to determine the "right flex office rate"?

Flex Office
November 13, 2023
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Any company wishing to reduce its real-estate footprint needs to ask itself this question. How do you assess the m2 required, and hence the flex office rate applicable, without putting a strain on your business? There's no magic formula, but there are a few criteria to take into account from the outset.

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The average office occupancy rate on the European continent was 55%, according to Savills, an international real estate consultancy, in a study covering the period from June 2022 to February 2023. For the Paris central business district, the occupancy rate is as high as 66%. The perception of under-utilized space has led many companies to embark on a program to reduce their real estate footprint.

However, it is difficult to quantify by how much it is possible to reduce the surface area occupied without adversely affecting the business. This assessment of the useful real estate footprint immediately raises the question of the number of offices to be installed. In fact, to reduce the surface area occupied, there's hardly any other solution than to reduce the number of offices to be set up, in order to avoid amputating convivial spaces. 

"In the office development programs we support, there is now always a flex office component, even if it doesn't concern all populations," adds Flore Pradère, Director of Research & Prospective Tomorrow's Offices at JLL, a commercial real estate consultancy.

What do we mean by "flex rate"?

For a constant headcount, reducing the number of desks means calculating a flex rate, or expansion rate. The flex rate is a number between 0 and 1, indicating the number of desks to be installed for a given headcount. For example, a flex rate of 0.6 means 6 desks for every 10 employees. The closer the figure is to 1, the greater the number of desks placed, and the lower the flex rate. 

According to JLL, the average flex rate is 0.5, i.e. one position for every two employees. Doriane Bettinger, People & Transformation Director at real estate consultancy Parella, talks more in terms of a range:

"Mentalities have changed. The important thing is not to target a precise figure, but to know whether we're in a range between 0.6 and 0.7 or below 0.5".

Initial diagnosis of usage, an essential element in calculating the flex rate

There's no magic formula for defining the "right" flex rate! There are, however, a few key variables that can be used to assess the most appropriate flex rate for each company. These variables can be assessed during an initial diagnosis.

Take into account the natural vacancy rate

One of the first criteria to take into account is the natural vacancy rate, with no notion of remote work. 

As a result, outside of the remote work agreement, employees are continually absent from the office. This absence from the office has several possible sources: paid vacations, RTT, recuperation, sick leave... It can also be due to activity and operational needs. Travel, external appointments and training create a "natural" vacancy at the office. 

However, this vacancy is often not enough to create the conditions for setting up a flex office. For example, absences due to illness are unpredictable, and vacations are often taken at the same time. 

See also: Diving into Bic: "even before Covid, offices were only 80% occupied with vacations and travel".

Ensure a sufficient number of days at remote work

A second important criterion to take into account is the existence of a remote work agreement in the company. 

In particular, the average and maximum number of remote work days are important variables: the more employees work remotely, the less on-site workstations are needed.

For example, with only one day of remote work possible, it may be difficult to go below a flex of 0.8. For a team of 5, with a distribution smoothed over the week, this means that each day, one person works from home or a third location. In theory, this means that 4 offices can be set up for 5 people. 

Clarifying the number of days teleworked per team helps to smooth out office attendance and organize a more constant average occupation. To enable flex, remote work cannot be concentrated on a single day. It has to be smoothed out over the week. However, there is a tendency to concentrate remote work days around the weekend, on Fridays and Mondays.

Final point: be careful to distinguish between remote work (the number of days allowed by the company) and remote work actually taken! For example, some companies authorize more remote work days than are actually taken by employees, who are keen to reconnect with their colleagues. This is particularly true for young people.

Evaluate actual occupancy rates on peak and off-peak days

Analysis of the actual occupancy rate is an essential prerequisite for any flex-office initiative. 

"We always start our support with an analysis of usage. Some key criteria are identified, in particular the rate of presence at the workstation and peak days, i.e. the days when presence at the office is at its highest. This occupancy ratio confirms that there is never a day when 100% of employees are sitting at their desks," assures Doriane Bettinger. 

There are several ways of doing this: using presence measurement companies, sensors, badge or wifi connection data, or simply using usage measurement solutions such as Deskare. The best thing is to cross-reference these different data, whenever possible. For this, don't hesitate to ask your IT department when necessary!

Analyze collective uses

The need to be present at the office for meetings or activities requiring physical presence can also influence the desirable flex rate. It will be more difficult to reduce the number of places available for teams used to meeting 3 or 4 times a week, especially as these days of presence are the same for all team members.

"Understanding the organization and fixed attendance days enables us to assess the flex rate, but above all how much we need to provide additional work positions for peak days," explains Doriane Bettinger. "You need to be able to seat all employees on busy days, whether at standard workstations or in so-called informal work positions".

Adapting the flex rate to the business

The nature of the company's business influences the acceptable level of flex. For example, in sales-oriented professions with a high number of appointments or out-of-office trips, it is possible to lower the rate. Conversely, jobs requiring specific software, equipment or documentation available only in the office will not allow a high flex rate. This is the case, for example, for computer graphics designers, editors and accountants. 

"In our programs, we observe a modulation of the flex rate depending on the department, which can vary between 0.3 and 0.9, even if these are extremes," confirms Flore Pradère. 

Calculating the flex rate by department gives an average expansion rate reflecting the different types of activity.

Anticipating company growth

If the number of available workstations is too low, this can hamper a company's growth potential. For example, an expansion rate of 0.4 on the lowest calculated headcount may prevent the hiring of new recruits who can't find space to work in the office. 

Conversely, "some programs where the number of offices installed is identical to the initial situation can be designed to allow the integration of new employees in the months to come, in a clean desk approach, where each employee vacates his or her own office at the end of the day", adds Doriane Bettinger. 

Let's remember what's behind this anglicism: it means freeing up your desk at the end of the day, so that it can be used by another employee the following day.

So there's no obvious standard formula. After an initial diagnosis, it's advisable to start with a rather high average flex, then continue to transform spaces as new habits are acquired.

Do you have a space-saving project to implement? Let's discuss your project together!