Switching to an open-office or collaborative office design can do much more than attract millennial
employees. It can save business owners’ money.

It’s not a one-size-fits-all approach, though. Business executives need to analyze their office’s work
processes, business operations and IT infrastructure prior to switching to a collaborative office or
open-office layout, say design professionals.

Still, more companies are opting for redesigns of existing spaces due to Orange County’s tight office
rental market. The availability rate here dropped from 15% to 14.5% over the past 12 months while
the asking rental rate rose from $2.18 per square foot to $2.44. The trend is particularly pronounced
for tenants occupying at least 20,000 square feet.

“Every organization has a different (work) process,” said Heidi Hendy, managing principal of
Newport Beach-based interior design firm H. Hendy Associates. It has designed offices for businesses
such as Corona-based energy drink maker Monster Beverage Corp.; mortgage data processor
CoreLogic in Irvine; and Costa Mesa-based fast food chain El Pollo Loco.

New office designs must fit those processes, Hendy said. Removing walls and doors can affect the
quiet and privacy needed to perform certain kinds of tasks.

That very tweaking is “part of the backlash about open-office designs,” said Karen Thomas, a
principal at architecture firm LPA Inc. in Irvine. “There’s a constant interruption occurring audibly
and visually.”

People talking at a conference table placed among a farm of cubicles typically distract people working
nearby, she said.

Younger employees will often listen to music via earphones to help them concentrate, Thomas said,
but the next wave of open-office designs must have “zones that have acoustic and visual privacy” to
make them work well for staffs.

Companies that decide on an open-office design also should consider allowing employees to change
desks throughout the workday to increase productivity, Hendy said.

Open-office designs started gaining popularity in 2007, she said, prompted by more mobile work
cultures made possile with new technologies and by different perceptions of workspaces.

Business owners learned that such changes increased employee productivity by 30% to 40% as the
open designs allowed employees to more easily see each other’s work on projects and to collaborate
effectively, the designers said.

“About 6% of businesses’ expenses are for rent,” Hendy said. “Employees are about 70% of the cost
of running a business.”

So changes to floor plans that increase employee productivity can have an outsized impact on the
bottom line.

Changing to an open-office design this spring resulted in an estimated $500,000 annual cost savings
for the Irvine office of accounting firm BDO.

The Chicago-based company employs 146 in Orange County and is among a handful of sites using the
new design prior to rolling out the ideas nationwide.

“Most accounting firms lease office space,” said Joe Johnson, the firm’s managing partner in Orange
County. “Switching to an open office design … made a lot of financial sense.”
Attracting and retaining the next generation of workers, the millennial generation, also was a factor,
he said, but that was hardly the determining factor in opting for the new floor plan.

Office leases are the second largest cost for most service firms after labor, Johnson said, and BDO
would save $5 million over a 10-year lease by changing its concept of what constitutes an office.

The firm moved in July to a 21,000-square-foot office at 600 Anton Blvd. that’s about 25% smaller
than its former office.

LPA’s Thomas said that today’s smaller corporate offices are a byproduct of new technologies and
that workspaces have shrunk to 6-by-6-foot areas from 8-by-10-foot spaces.

“People don’t need as much storage for documents and files because those items are on their
computers,” she said.

The new BDO location has 16 conference rooms along its periphery and private rooms in the middle.
Conference rooms have glass walls to allow natural light into workspaces.

Accountants in the audit division are part of the reason for the new design, Johnson said.

“Sometimes they go directly to the clients’ offices and work there instead of coming into (BDO’s)
office,” he said, “so they are essentially part-time office dwellers.”

The firm’s tax accountants usually work in the office full time.

All employees who work in the office use open desks instead of cubicles.

Reservation System

Employees reserve an office or desk for the day or week via a computer reservation system BDO calls
“hoteling.” Even Johnson uses the system.

Workers retrieve desk items from personal lockers before heading to their reserved workspaces at the
beginning of each day. They return the items to the lockers in the evening.

“Most employees were opposed to the new design (at the beginning),” Johnson said. “Now everyone
loves it” because of its flexibility.

New Spaces

Open-office designs, however, can hinder productivity if they lack “activity spaces” designed for
certain projects or work purposes, said Hendy and Thomas.

“People need quiet rooms that allow them to concentrate on a project,” and conference rooms that
permit several people to have an animated discussion during an all-day project, Hendy said.

The keys are to consider the number of projects that require privacy; install furniture that encourages
specific types of work or conversation; and provide the technologies employees need.

“It’s important to treat those glass walls and hard surfaces to reduce noise” with special chemicals,

LPA’s Thomas said. Voices and other sounds can echo off hard surfaces and amplify the noise in the
entire office if the treatments are absent.

People who need to work on a spreadsheet, presentation or report usually need a quiet room. Some of
Hendy’s office designs include a small office about a third the size of a traditional office that allows a
single employee to concentrate. Quiet rooms typically sit in the center of the floor plan, have a desk
for a laptop, one or two glass walls to provide natural sunlight, and a plant to prevent the space from
feeling sterile.

The quiet room also has one wall painted in a bolder color, such as burnt orange, to prevent the
employee from feeling isolated while not being so bright that it distracts from the work at hand. Walls
depicting an outdoor scene can prevent a feeling of claustrophobia.

A conference room would be a larger version of a quiet room but located at the periphery of the floor
plan and with a large computer monitor to allow participants to display financial statements and other
information needed for collaborative projects.

Conference rooms can have bar-stool-type seating and a high conference table to prevent people from
becoming too relaxed during a meeting, or they can have living room-type furniture to encourage
creativity and conversation.

“The design of a space causes certain behaviors,” Hendy said.

New Views

Employees need flexibility to move to a new desk throughout the day, said Jennifer Walton, H. Hendy
principal and project director.

She is a specialist who designs buildings and offices to improve employees’ health and well-being in
the workplace.

Employees usually need a variety of light, movement, and visual stimulation to remain energized
during the day, she said. Blue light, for example, usually is in morning sunlight and helps people wake
up. Red light slowly replaces blue light during the day and causes people to become fatigued in the
afternoon.

“Most people become less alert in the afternoon,” she said.

So allowing employees to shift their work to a conference table in the lunchroom or to a sofa in front
of a TV news show can boost productivity by allowing them to mentally take a break and prepare to
solve the next challenge, she said. It also allows employees to adjust their postures, avoid backaches
and become more comfortable during the workday.

An alternate inexpensive solution is to install blue-light light bulbs or programmable LEDs that
activate in the afternoon.

Leadership

The biggest challenges in using new open-office designs are convincing everyone to contribute to the
new space and convincing business owners and management to adhere to the designs, said LPA’s

Thomas and Drew Carter, a director at H. Hendy.

The executives should work from the sofas, for example, and use the desk reservation systems.

“It was really hard for me to give up my office,” Carter himself acknowledged. “There’s a sense of
status, of prestige associated with a large corner office.”

“Then I realized that I was out of the office 70% of the time.”
The architecture firm practices what it preaches: None of Hendy’s leaders have private offices. Carter
spends most of his time meeting with clients, visiting work sites and introducing clients’ employees to
their new offices. He’s occasionally in the office to read and sign contracts, review proposals or talk
with other company leaders.

“So it didn’t make sense to pay for an office that I rarely used,” he said.

So he and the firm’s leaders, including the founder, Heidi Hendy, sit together at a collection of desks.

They can easily see each other’s work in the new seating arrangement, make quick corrections and
reduce the time spent on a project.

“It’s essentially creating a collective brain,” Carter said. “That means I have less (backtracking) to do
on projects.”

It’s a concept that Carter explains to clients and their employees prior to their occupying a newly
designed office.

LPA’s Thomas said that her designers usually ask to work with clients’ staff “champions” to assure
that the new design is accepted and used by employees. The champions explain the employees’
unique needs in a new office space.

“If the space doesn’t fit with their needs, the design will fail,” Thomas said, “and it’s a mistake to
think there’s a cookie-cutter layout that works for every business.”

Roaming Technology

Redesigned offices also must include technology—phone and computer systems—that allow
employees to roam throughout the floor plan.

“Conference rooms that have technology are used 40% to 60% more often,” Thomas said. Employees
need access to smart screens and IT systems to help share information and to have more effective
collaborations.

Other technologies allow employees to shift their workplaces during the day.

If everyone has a work phone number that rings at a specific phone in the office, for example,
employees can miss important phone calls if they’re roaming the office throughout the workday.

A solution is a smartphone app to forward work-related calls to employees’ personal cellphones,
Carter said.

A similar system allowed the design firm to eliminate the cost of new desktops and laptops for
employees, he said.

Employees use a monitor and Wi-Fi-enabled keyboard to sign into a computer server to access their
workstations. The server retains employees’ customized desktops and folders and transmits that
information to the desired workstation.

“I can even use a client’s computer overseas to access my desktop, and there are no security issues,”

Carter said. It costs about $6,000 to implement the system for 40 people. That compares to having “to
replace desktop computers every three to five years at a cost of $500 to $3,000, depending upon
processing power.”

Carter said “there are a lot of technologies that can bridge legacy computer systems to the new
systems” so that business owners don’t have to invest in entirely new infrastructure.

“So you can use those legacy systems to the end of their life.”

Business owners can pick and choose the changes they want in their new office spaces, Carter said,
including eschewing open office design altogether.

“If they (the clients) aren’t ready for an open-office design, we’ll tell them,” Hendy said.

“But you have to wonder if those companies will be around in 10 years,” Thomas said, explaining that
business leaders must be progressive to grow.


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