Advance. Activity Based Working: Application to Commonwealth Government May 2014

Advance Activity Based Working: Application to Commonwealth Government May 2014

Introduction Activity Based Working (ABW) is not a new concept in the private sector, with pioneers such as Macquarie Bank and Commonwealth Bank being joined by IT companies, other financial services and professional services firms over the past two years. The benefits of ABW in the private sector have been well documented including at a real estate level, improved utilisation, better cost efficiency and flexibility to grow and contract without expensive reconfigerations. The benefits to an organisation go far beyond just real estate outcomes to include improved staff engagement and satisfaction, productivity improvements, creating a more cohesive culture and underscoring the company s brand reputation in the market. However to date, there has not been a widespread adoption of ABW in the Australian public sector. Some innovative Agencies such as Department of Human Services (DHS), Prime Minister & Cabinet and the Australian Tax Office (ATO) are now starting to consider how it could be applied. In fact, DHS and ATO have coined their own term Flexible Workplace Environment (FWE) - in recognition of the tailored approach they are using to meet their specific organisational and cultural needs. An increased efficiency dividend impact (an annual funding reduction for Commonwealth Government Agencies) and recent changes to the PRODAC (Australian Property Data Collection) guidelines, reducing the occupational density target for usable office area from 16 sqm per occupied workpoint to 14 sqm, will no doubt increase the focus on real estate strategies such as ABW. There are a number of ways Agencies can improve their space efficiency through an ABW program: 1. Reduce overall facility vacancy (ie unoccupied desks) by a target of 5-10% 2. Increase the utilisation of the facility with a target of 80% utilisation 3. Reduce the number of designated offices, instead offer a variety of work settings for different types of work undertaken 4. Reducing the average footprint of desks 5. Reducing physical storage What this paper intends to do is explore how ABW can be applied to a government portfolio, understand some of the challenges and provide some ideas from an Australian and global perspective to ensure the successful implementation of ABW environment. 2 Advance

Flexible and Efficient Workplace Design Guidance The Flexible and Efficient Workplace Design Guidance was released by DoF in September 2013 to help drive Agencies to understand more efficient and effective workplace design that meets their business needs. The guideline encourages consideration of measures such as more flexible working styles, operational efficiency, leveraging technology, supporting work/life balance and recognising the cultural change aspects of a new work environment. Activity Based Working 3

PRODAC PRODAC was first introduced in 2009 by the Department of Finance (DoF) to support two key property management principles within the Commonwealth Property Management Framework: 1. efficient and effective design and 2. appropriate accountability measures. The initial PRODAC Property File (which includes area, workpoint and descriptive data) was introduced in September 2009 and the first PRODAC Cost File was introduced in October 2011. The most recent changes implemented in July 2013 require that all Commonwealth Government Agencies reduce their occupational density target for usable office area from 16 sqm per occupied workpoint to 14 sqm. This applies to all properties owned, leased, licensed by Commonwealth Agencies at the collection date. This new PRODAC target with continued funding cuts applies even more pressure to Agencies to develop cost efficient real estate strategies. What is Activity Based Working? ABW is a workplace strategy that provides people with a choice of settings for a variety of workplace activities. Rather than forcing individuals to undertake all their work at one setting, ABW allows people to physically locate themselves where it is most suitable for them to complete their work. Spaces are designed to create opportunities for intense, focused work as well as impromptu and informal meeting space and formal meeting rooms depending on the work an individual is undertaking. It allows not only flexibility in working style, but affords the property teams flexibility in their accommodation strategy with a workplace that allows for contraction and expansion in demand and headcount over time. What it is not. We need to be clear that ABW is not a hot-desking program. Hot-desking is non-allocated seating in a traditional office environment. Whilst ABW has the similar philosophy of nonassigned seating, there are many other work settings provided to compensate. ABW also isn t a working from home program. That can be part of an ABW strategy if the Agency decides to implement a mobile working policy. However, ABW essentially focusses on the experience the employee has whilst in their office environment. 4 Advance

What are the drivers of ABW? There are a number of drivers that directly impact Commonwealth Agencies and require a new approach to property strategy, shifting the thinking towards ABW as a solution. These include: Table 1: Drivers of ABW Drivers Cost Efficiency Flexibility & Efficiency Future proofing Government property teams need to create a workplace that supports the Efficient and Effective use of Commonwealth resources which is consistent with the Financial Management and Accountability Act 1997 increases utilisation and minimises real estate costs which is an important consideration given Commonwealth government agencies have typically seen a decrease in funding over the past four years supports the Efficient and Effective Design principle and guidance which is consistent with the Commonwealth Property Management Guidelines minimises churn and gives the ability to add and contract headcount without expanding or shrinking floor space supports the occupational density target established by the Government, of 14 sqm of usable office area per occupied workpoint supports the Property Management Planning principle which is consistent with the Commonwealth Property Management Guidelines better enables Government property teams to respond to and be supportive of an Agency s broader strategic plans enables quick responses where functions are transferred via organisational change or Machinery of Government change Drivers Sustainability Innovation Talent Source: JLL Government property teams need to create a workplace that supports the whole of life focus to avoid obsolescence reflects the Government s commitment to being green fosters creativity via collaboration across Agencies and functions which could include co-location of Agencies can adapt to changes in operations and technology considers the impact of office design and building quality on staff with the aim of maintaining or improving work satisfaction and driving productivity attracts and retains the best and brightest minds into Commonwealth government agencies meets the multi-generational needs of an Agency s employee base ABW by its very nature provides an Agency flexibility in space utilisation. Agencies that operate with high vacancy levels and low utilisation rates create cost inefficiencies in space and decrease productivity of the real estate portfolio. ABW gives Agencies the ability to add and contract headcount without expanding or shrinking floor space. Traditionally the bottleneck in any accommodation strategy has been the future headcount forecast one, three, five and ten years out which makes it very difficult for the property team to identify and allocate the right amount of space and respond quickly due to the rigid nature of real estate. Understanding the difficulty of getting forecasting right, the Agency s hand is forced to take expensive options for expansion and contraction rights. This is no longer the case with an ABW strategy. Instead those big contingencies are eliminated from the cost base. Activity Based Working 5

As Governments have the potential to change every three years, is a 10 year lease sustainable? With current occupancy models there is very little flexibility. ABW offers the ability to relocate staff based on demand without the need for re-stacking every time a new project is initiated. A report by the FMA estimates secondary and tertiary churn costs (churn outside of a major relocation) corporate Australia $3.6 billion per annum 1. Based on the FMA study, average churn rates were estimated at 40% per annum and a traditional office fit out cost was calculated at $1,437 per person or $83 per sqm of churn 2. Thus on a portfolio of 100,000 sqm with a 40% annual churn, the estimated cost would be $3.32 million each year. ABW reduces this cost of churn and whilst there may still be ebbs and flows in team numbers, there is the flexibility to move teams around within an ABW environment to accommodate those areas which are shrinking or growing at a minimal cost. However, this isn t only about churn. Adopting an ABW strategy allows an Agency flexibility as it is presented with the opportunity to move people around, expand and contract head count, consolidate vacant workpoints and generate cost savings at the same time. Organisations that have implemented an ABW strategy have found their churn costs reduce significantly. It also presents the opportunity to focus on doing the best 10-year deal rather than just focussing on getting the right options and expensive break options for flexibility. Organisations in the private sector have pointed to ABW as helping future proof their space for an exit strategy. The same could be said for the public sector, with future proofing of space linking back to the key objective of property management planning under the Commonwealth Property Management Guidelines. Given the nonassigned desk policy of ABW, if an Agency finds itself with 20% vacancy on each floor, there is not a requirement to re-stack the individual floors and be faced with a jigsaw puzzle of trying to fit teams into set locations. Instead an Agency that has implemented ABW may decide to give up an entire floor and simply re-allocate home zones (space where business units are allocated as an anchor within an ABW environment). In addition, the fit-out in an ABW environment tends to be less dense and if any churn is required, it will be easier to move or relocate and any make-good would be significantly cheaper than a traditional office environment. Implementing some or all of the design principles of ABW offers Government an invaluable opportunity to be seen at the forefront of flexible workplace environments. Not only will this create a more sustainable future, it will allow government to engage with industry to embrace the future of the workplace and how people interact and engage in the office. Governments will find themselves disadvantaged as adoption increases in the private sector if they cannot provide an attractive work environment, equipped with cutting-edge technology and innovative workspaces. Environmental awareness and energy price volatility have led to government mandates for environmental quality and performance as well as a pronounced end-user preference for work settings that are healthy and environmentally responsible. In accordance with the Energy Efficiency in Government Operations (EEGO) Policy, Commonwealth Government Agencies are required to meet a minimum 4.5 star National Australian Built Environment Rating System (NABERS) rating for both base building and for the fit out. Buildings with tenancy areas of less than 2,000 sqm and leases for under two years are exempt, however Agencies are encouraged to seek tenancies of 4.5 stars NABERS Energy or higher wherever possible. ABW can help Agencies meet their requirements in terms of fit out through reduced footprint, lower energy usage, less reliance on paper and reduced printing volumes. ABW fits closely with the five key principles within the Commonwealth Property Management Guidelines. Value for money Property management planning Efficient and effective design Appropriate accountability measures Co-operative Commonwealth property management 1 Office Churn Research Report, Facilities Management Association of Australia, 2001 2 Office Churn Research Report, Facilities Management Association of Australia, 2001 6 Advance

Considerations for applying ABW to Government portfolios Time Utilisation Most organisations in the public and private sector show space utilisation rates of 60% 70%, meaning at any one time 30% 40% of the space is vacant. This is not a sustainable solution from both an environmental or financial perspective. On a portfolio of 100,000 sqm this could translate into wastage in the order of $10 million per annum. The first step in building a business case for ABW is to undertake a time utilisation study on all occupied premises. The chart adjacent shows JLL s own time utilisation study over a period of two weeks which showed an average vacancy of 36% no matter what day of the week, time of day or functional line considered. One size fits all? It is important to note that ABW is not a one size fits all solution. First, an Agency must decide if ABW is the right workplace strategy for them, what style of ABW to adopt to suit their business functions and how far to push the boundaries. To date ABW has been adapted based on size, structure, location and business objectives. Often, a hybrid model is best suited with only certain areas of the business being transformed to the ABW model. For example, it is possible to create a successful hybrid of traditional office style settings for senior levels and an ABW work environment for the younger grads that are more open to change and welcome the flexibility. ABW can also be an adoption strategy starting in one area of the business, Figure 1: Time Utilisation Study JLL Sydney Office 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: JLL Monday Tuesday Wednesday Thursday Friday V - Vacant SL - Signs of Life I - Interaction F - Food IU - In Use

like call centres and IT areas, before transpiring across all areas of the Agency. Or for Agencies who want to take a softer approach, they can start with a high density ratio of desks to people and as the Agency progresses along the adoption curve, bring those lower down which will leverage the space harder. Change Management Even with the best intentions, at least two thirds of change initiatives fail globally. Workplace change is no exception. Few of the companies in the private sector that have explored new ways of working have been able to roll out their change programs without encountering exacting difficulties. Projects prove difficult to implement because of a series of barriers, such as the lack of senior management support, resistance of executives to give up offices, the lack of mobility of certain employees and IT security issues. All Agencies and companies in the private sector that have implemented ABW in Australia agree that an effective change management program is the critical success factor. And all emphasised that you cannot start too early. Most started their formal change management program 12-18 months ahead of their go-live date with planning commencing well before that. Typically an initial period of 3-6 months was used to gain leadership support, who then become instrumental to the broader change management program. Timeframes of between 9-12 months were typical for an organisationwide program for companies implementing ABW. Each organisation will have its own reasons for adopting ABW, but what is common is a need to create and communicate a vision for the organisation with a strong key message that permeates all aspects of the change management program. What is also critical to note is that the change management does not stop the day you move into your new ABW environment. Ongoing feedback, refinement and communication is essential, underpinned by a new culture and behaviours and leadership support. Any change management program needs to factor in likely resistance points and employ a variety of tools to help overcome them. These tools might include executive coaching for leadership who are struggling to see the value or one-on-one sessions with individual resisters with the change management team or executive sponsor. Focus groups are a good tool to apply peer pressure, mixing ABW advocates with resistors. Using role models is also effective, preferably senior leadership within the organisation or rain-makers as well as other organisations in the industry who have successfully implemented ABW. Consistent and frequent messaging through the change management program is paramount. Communication should be open and honest, provide feedback channels, be relevant and engage different stakeholder groups emotionally through the process.

Challenges in implementing ABW for Federal Government Portfolios While there has been a high level of interest in ABW, some Government Agencies have raised some concerns over the applicability of ABW to their space and business function and potential challenges associated with individual Agency enterprise agreements. Access to capital to refit space, concerns over dissolution of traditional offices and security in technology are just some of the questions that are being talked about. Below we will consider some of the concerns raised and offer insight into how ABW can be adapted to best suit Government business functions. Access to Capital Access to capital is a real constraint for many Government Agencies. Whilst ABW can produce significant cost savings, there is still potentially a large upfront investment involved in refitting space. However, agencies do need to balance the up-front investment with the cost efficiencies gained over the life of the lease, which can be significant. In addition, Agencies need to be mindful that the adoption of ABW is not only about cost savings, but is also the workplace catching up with the way people work and live their life, enabled by technology and improved connectivity. The best timing for Government Agencies to adopt an ABW strategy is prior to a major lease event such as a lease expiry, enabling the ability to develop a new fit-out. Such an event presents the opportunity to pass the refit cost onto the landlord by way of an incentive agreement. In order to accommodate for this, an Agency s property leasing strategy needs to be aligned with their fit-out program. If a landlord contribution to refit costs is not achievable, it is important that appropriate capital allowances, linked to the lease expiry timetable are made. The current property market conditions around Australia represent a good opportunity for Government Agencies to negotiate with their landlords to secure an incentive to contribute towards the rent or fit out costs. All Australian markets are currently weighted in favour of the tenant as shown in the table below and this is expected to continue in most markets for the foreseeable future. Removal of Offices There is concern within parts of the Government sector that introduction of an ABW workplace strategy will result in the traditional office becoming redundant, and the associated impact on the hierarchial organisational structure. JLL s view is that the workplace Table 1: Projected Market Conditions Sydney Melbourne Brisbane Canberra Adelaide Perth 2014 2015 2016 2017 a movement in the tenant s favour a movement in the landlord s favour a balanced market will continue to exist as a physical place to bring people together to collaborate, create a culture for an organisation and provide professionals with the tools to excel at what they do. Clearly the world is changing with the advent of technology and the workplace is changing with it. Property teams within Government Agencies have an exciting opportunity to shape how people work in an enterprise workplace. In addition, the notion of hierarchy will diminish in line with generational change. By 2020 Millenials (those born after 1980) will comprise 50% of the workforce which will alleviate this issue to some degree. This will mean a workplace will be shared by four generations with very different work experiences, work styles and expectations. Government will need to respond to this change in the demographic make up of its workforce and any ABW strategy needs to be mindful of these variations and the near 50-year age gap that is becoming more commonplace within the workforce. By nature we are a territorial culture. Much like the Australian dream of owning your own house, most professionals have traditionally had strong ties to their individual office or desk. If this is taken away as part of an ABW program, it needs to be addressed upfront in the change management strategy. Employees need to see in their own mind a fair trade-off between giving up their own, assigned desk and the benefits they will receive from a more innovative design and workplace. Part of the transition to an ABW environment might include a pilot trial of a new way of working whereby different teams within the Government Agency are given the choice to opt in and be part of a trial. As mentioned earlier, another option is to adopt a hybrid model, 10 Advance

where for example, 60% remains a traditional office setting and 40% is ABW. The US Federal Government recognised through their own drive to optimise workplaces, that they were seeing flatter organisations which lessened the need for hierarchy. They observed that cross-unit organisational groupings with fewer layers and more decentralised decision making are replacing more hierarchical structures. Thus creating the need to reconsider the existing approach to the workplace environment. Technology Technology underpins an agile workplace. For a workplace strategy like ABW to be successful, Government Agencies need to ensure the building is capable of introducing the supporting technologies like wireless networks and adequate communications connectivity to support the enhanced technology requirements. Concerns have been raised about the security and data that may become available to a wider range of individuals or groups due to technology advancements that come with flexible workplaces. Whilst this is a real threat, it can be mitigated by implementing strong security measures to address these risks. Wireless networks can be used by Agencies with protected classification and below security requirements. Where the risk is considered very high, Government Agencies should use fixed work points in those high risk areas. Technology advancements, such as access to BYOT (bring-your-owntechnology) and mobility need only be adopted as much, or as little as the Agency wants. For example, it is possible to create an ABW workplace strategy that enables common desktops, optimising the number of desktops available and improve the ability to share services and applications across shared hardware. Common desktops will also reduce the cost of IT development and maintenance as software and hardware becomes standardised across the organisation. An example of this is DHS moving to a single desktop environment following their formal integration. Other mobility enablers include issuing staff with laptops or tablets, installing a WiFi network into the building, utilising cloud storage, 3 Australian Public Service Mobile Roadmap, Department of Finance and Deregulation (June 2013) 4 Department of Finance and Deregulation, Commercial Service Provider Assurance Framework draft), September 2012, http://agimo.gov.au/policy-guides-procurement/authentication-and-identity management/) VoIP telephony, monitors at collaboration tables, video conferencing systems, online communications software, an electronic room booking system with visual displays outside meeting rooms and all working areas equipped with notebook power adaptor cables. DoF have issued the Australian Public Service Mobile Roadmap 3, which recognises the far reaching potential of mobile technology to increase public sector productivity. Technology and the idea of a shared workspace is a critical element in driving future savings in services provisioning and increasing the flexibility and responsiveness of government operations. DoF identify the following considerations that need to be addressed by an Agency when implementing a mobile work strategy: security challenges with the control of the transmission and storage of information on smartphones and tablet computers technology and standards the rapidly growing and changing area of mobile technology requires timely standards development policy ensuring compliance with existing policy and the need to update policy to reflect changes brought about by mobile technology personally-owned devices approaches to integrate personally-owned devices into the workplace, i.e. bring your own device (BYOD) policies processes and management tools such as mobile device management for the ability to control fleets of mobile devices system integration with existing ICT systems, e.g. applications and printers, as well as in support of end to end joined up services integration with whole-of-government initiatives such as the Commercial Service Provider Assurance Framework 4 support and training for devices and software Source: DoF Australian Public Service Roadmap June 2013 Activity Based Working 11

An ABW office does not require knowing where people sit, which can potentially pose a threat to secure environments and sensitive projects and data. To combat this, zones can be established whereby each team is given an allocated space in which to work, with access to a variety of different work settings such as hush rooms, discussion pods and team tables. Working on personnel files and sensitive information can be done in the privacy of a hush room or a meeting room. Combining this with common desktops will allow for a hybrid of a cable network and wireless accessability which will allow for increased security and greater control over employee data as staff are not tagged to a specific desk. Electronic filing Electronic filing is still not readily accepted as a form of archiving in Commonwealth Agencies which could create a barrier to implementing a successful ABW program. It is important for Agencies to understand the real efficiencies, cost savings and the environmental impact ABW can have for them and electronic filing systems are a key component of achieving those efficiences. An ABW program provides improved technology infrastructure resulting in less reliance on paper records and a reduction of paper storage, generating cost savings in rental space. It is important to note that ABW can be adapted to include storage space for those vital files that need to be stored and kept on hand for easy access. Storage practises such as centralised lockers, electronic document management and utilising cloud computing have all been implemented with success in ABW concepts. Occupational Health & Safety OH&S is imperative for Government Agencies and is a major issue when it comes to adopting an ABW strategy. Individuals will have different requirements for chairs, tables and workplace settings, all of which can be incorporated into the strategy. Office layouts and design must be carefully considered to ensure there is sufficient flexibility to meet the requirements of a diverse and dynamic work force which provides a safe, and effective workplace setting for staff. Lockers or caddies provide adequate storage for employee personal belongings eliminating the risk involved with bags, and personal items being left on the office floor. The US Experience Similar to the Australian environment, a key strategy for the US Federal Government is to reduce real estate costs and space reduction requirements are now being mandated. Agencies have been charged with improving utilisation and occupancy rates, reducing annual operating costs and energy usage and driving sustainability through workplace initiatives. In November 2011, President Barack Obama issued an executive order directing Federal Agencies to generate $8 billion in cost savings in 2013 through space consolidation and the elimination of unneeded real property while moving toward a clean energy economy. Shortly thereafter, the Obama Administration released another memorandum (OMB Memo M-12-12 - Promoting Efficient Spending to Support Agency Operations) that set out the framework for additional cost savings and improved management of the US Government s real estate portfolio by instituting a zero growth policy i.e. freeze the footprint. This new guidance required civilian Government agencies to maintain their real estate footprints at 2012 levels indefinitely. To comply with these mandates to demonstrate cost savings and improve the utilisation rate, Federal Government Agencies in the US are implementing workplace strategies such as ABW at a portfolio level. As early as 2002, the US General Services Administration (GSA) launched the WorkPlace 20 20 research and development program. The focus of this effort was to help Agencies realign their work settings to support teams effectively at a time when organisational structures, work styles, and technology were evolving rapidly. This initiative has transitioned into GSA s Total Workplace Program that seeks to solve real estate problems spawned by the Freeze the Footprint initiative introduced in 2012. GSA has recently refurbished its Washington headquarters to an ABW model and it will accommodate 4,500 workers almost 2,000 more than it had previously housed because of shared work spaces and telecommuting. GSA Headquarter office will average approximately 80 usable square feet (USF) (or 92 rentable square feet (RSF)) per person of workspace. 12 Advance

Whilst the US Government does not mandate a certain amount of space per person, they have observed that in a drive to deliver cost savings, the typical office standard has declined since the early 2000s from around 250 square feet per workstation to around 190 square feet or less, a substantial reduction 5. As part of its Workplace 20-20 initiative, GSA undertook an analysis of six workplace projects that have been implemented and found that more than 50% of employees within these Federal government workplaces rated group productivity and communication both within and between groups as better in their new workspace. 5 Workspace Utilisation and Allocation Benchmark, USA General Services Administration, July 2012 Figure 2: Percentage of users who rated the new workplace as better than or the same as the old workplace for these aspects of group work Total 94% Total 90% Total 92% Total 94% Total 92% Total 95% Total 95% 43% 34% 35% 36% 30% 31% 29% 51% 56% 57% 58% 62% 64% 66% Ability to get timely answers to questions Awareness of what others are working on Communication with other groups Overall group productivity Within group communication Ability to locate others when needed Ability to quickly share information Source: USA General Services Administration The same as before Better than before

Across the same six workplace projects, more than 80% of employees said their new workspace increased their pride in the workplace, and more than 60% said it increased their pride in the organisation, their sense of well-being, and their overall job satisfaction 5. The satisfaction survey showed improvements in several areas related to individual work: 59% said the new space is better for individual work effectiveness 55% said the new space is better for personal productivity 49% said the new space is better for concentration Overall, the US Government has responded to budgetary pressures by implementing responsible real estate portfolio management concepts to generate cost savings. These concepts span the full spectrum of occupier strategies including disposing of unneeded properties, limiting portfolio growth, improving utilisation rates and reducing operating costs. One emerging trend that is gaining broader adoption in the US Government is the deployment of ABW solutions, which we expect to remain a primary component of any new US Government property portfolio acquisition. The UK Experience The UK Government has implemented a plan to overhaul the way Government occupied office space is utilised. While a focus is on decreasing space per full-time equivalent employee (FTE), the UK Government wants to enhance the productivity and efficiency of its entire workforce by re-engineering the way the Civil Service works. The strategy being implemented is a top-down workplace productivity strategy brought on by the UK Government Reform program that has identified under utilisation and inefficiencies across most Government office space. The Government Property Unit (GPU) in conjunction with the Ministers of all Government Agencies have agreed to standardise space requirements on all Government leases, with the target being 10sqm/ FTE across all existing occupied Government space and 8sqm/ FTE in new space by the end of 2015 6. This measure underpins the drive to increase productivity, efficiency, communication and create an understanding across Government services. Co-location of departments is also a key objective of the GPU with the aim of increasing workplace collaboration and flexibility. With successful execution of the flexible workplace environment plan, the Civil Service has the potential to reduce occupied space by 25%- 30%, translating into a 2 million sqm saving of office space 7. As example of workplace efficiency achieved, the UK Department of Health (DH) combined its Estates and Information Services functions in late 2011 to launch the new Health & Social Care System in an effort to create new efficiencies. As a result, 8,000 sqm of space was able to be reconfigured in London and Leeds, resulting in 900+ new work desks into the same footprint. The upgraded workspace places the DH on target to reach the Government s space utilisation goal of 10sqm/FTE, and has also resulted in a decrease in net expenditure on estates and facilities management by approximately 2.5 million 8. The targets put in place by the UK Government are similar to PRODAC targets in that they have been born out of a an effort to increase employee productivity and efficiency and the need to reduce real estate costs. Although these strategies are not currently mandated in the UK, the role of the GPU is to ensure the Government estate is operating on an efficient and a long-term sustainable model. 6 The New Federal Workplace, US General Services Administration, June 2009 7 The State of the Estate in 2012, HM Government, UK 8 Government s Estate Strategy 2013, Government Property Unit, UK 9 Government s Estate Strategy 2013, Government Property Unit, UK 14 Advance

Case Studies* Caroline Chisholm Centre, Greenway, ACT The Caroline Chisholm Centre is a 4-5 storey office building that is occupied by DHS. The building has a NLA of 45,000 sqm that includes a ground floor main street. All building services are located in the main street spine providing activity in the centre of the building while allowing large unencumbered office space that can be configured in a range of ways. This building demonstrates the flexibility that large floor areas free of service rises can provide. Each wing of the building is 25 metres wide and has an area of 3,750 sqm. ABW features: Informal meeting spaces Inter-connecting stairs across five levels Range of highly flexible corporate meeting rooms Atrium style main street through the centre of the building Flexible building services (lighting, fire sprinklers, mechanical, electrical) to allow for change in utilisation Large clear floor plates of 3,750 sqm Higher proportion of soft services including reception counter, concierge, kiosk Demountable offices and meeting rooms Fully enabled Wi-Fi and VoIP telephony systems Source: DoF Flexible & Efficient Design Guidelines Prime Minister & Cabinet, 1 National Circuit, Canberra, ACT 1 National Circuit has a NLA of 15,291 sqm across five floors and has allowed PrimeMinister & Cabinet to accommodate 855 workpoints compared to the original 603 workpoints for 400 staff. The building features long elevations to the north and south, helping to achieve energy efficiency performance targets. Given the policy and co-ordination role of the Agency, there is a requirement for substantial taskforce space within the accommodation. Taskforces typically require contiguous space that is conducive to enhancing collaboration, whilst also maintaining a secure environment. ABW features: Interconnecting stair case Meeting rooms and break out spaces arranged around communication stair and atrium Accommodation for taskforce space Cafe on ground floor Mobile furniture in meeting rooms to allow for greater task force space if required Source: DoF Flexible & Efficient Design Guidelines Australian Taxation Office, 747 Collins St, Docklands, VIC The ATO s office in the Docklands has a NLA of 38,375 sqm across 16 storeys and accommodates approximately 2,600 workpoints. ABW features: Fixed portioned areas mainly located in the core of the building to maximise natural light across the floor plate SES Band 1 and 2 offices consistent with the small and medium sized meeting rooms for flexibility and movement Large, medium and small meeting rooms with operable walls Corporate meeting centre with capacity for 300 staff ATO Shopfront capability for face-to-face client contact and advice High end technical laboratory for IT forensic analysis and research 120 degree workstation layout to allow for flexibility and rotation around umbilical power and data reticulation E-librarian to support staff in the Agency s shift from a paper-based approach to online resources Incorporation of plants into open areas to improve the air quality and sustainability features of the office Source: DoF Flexible & Efficient Design Guidelines Comcare Office, 121 Marcus Clarke St, Canberra, ACT Comcare s office represents an example of a hybrid model workplace where elements of ABW have been incorporated into the physical, technology and organisational spheres; yet assigned seating has been maintained for the current state, although it has been designed in a way that could facilitate an easy transition to non-assigned seating in the future. Staff occupy three large floor plates of 2,900 sqm each which provides enhanced opportunity for physical interaction, collaboration and communication. ABW features: Interconnecting stair case Client-focused and client welcoming areas including reception and interview rooms 15 sqm per workpoint fitout density A variety of spaces including concentrated workrooms, formal and informal collaboration spaces Modular sized built rooms that can be adapted easily Mobile personal storage units Increased number and variety of meeting rooms with impromptu meeting spaces like booths, standing meeting areas and lounges Technology that supports mobility including wireless networks, voice over internet protocol (VoIP) phones and multi-function device (MFD) printing solutions Built-in potential for digital signage for corporate communications Use of recycled materials in the fit-out and plants for air quality and visual amenity Source: DoF Flexible & Efficient Design Guidelines * These case studies are summarised versions of those appearing in DoF s Flexible & Efficient Design Guidelines Activity Based Working 15

JLL, 121 Marcus Clarke, Canberra, ACT JLL relocated to 121 Marcus Clarke in December 2011 into an ABW environment, across 1,418 sqm. The company moved from a traditional office environment with two work settings (a desk and meeting room) to eight different settings designed to encourage collaboration, communication and innovation. Time utilisation studies in their previous office location showed a vacancy of 30% no matter what day of the week or time of day, highlighting significant inefficiency. ABW features: Ability to expand business by 55% without taking any additional floorspace Improved space efficiency by 20% in new office Dedicated settings for individual work, informal and formal meeting spaces Maximum natural light and air ventilation to penetrate all work areas Reduced paper storage by 60% Wireless guest network, digital collaboration tools, VOIP telephony 82% of employees believe that the new work environment increases staff productivity The chart below shows the improved office utilisation that JLL was able to achieve through implementing activity based working. Figure 3: JLL Canberra Office Improved Utilisation Staff 120 100 103 102 101 101 80 60 79 79 76 74.46 76 69.53 71.21 72.25 40 20 0 Source: JLL August 13 September 13 October 13 November 13 Traditional Utilisation Average Peak 16 Advance

National Disability Insurance Agency (NDIA), Geelong, VIC The National Disability Insurance Agency (NDIA) is currently establishing a delivery platform to support the implementation of the National Disability Insurance Scheme (NDIS). Due to the dynamic and diverse nature of the NDIS, NDIA sought to achieve a co-located environment that offered its employees a flexible workspace, efficiency improvement and cost reduction across the property lifecycle. In April 2014, NDIA opened their new national headquarters comprising a full ABW environment across 1,950 sqm at 43-45 Brougham Street, Geelong, Victoria. The new ABW environment will improve the fitout density ratio and reduce the footprint the organisation requires to support the implementation of the NDIS. ABW Features: 13 sqm per person fitout density ratio 13 sqm per workpoint fitout density Bright, open work environment Informal meeting spaces and individual touch down points Collaboration zones supported by audio visual equipment Maximum natural light to penetrate all areas Technology that supports mobility including wireless networks, laptops and multi-function device (MFD) printing solutions Source:NDIA The adoption and successful implementation of ABW as a standard across all NDIA sites is being driven by the CEO with the support of all senior executives. Within the 2013/2014 work program NDIA are developing five sites covering 7,650 sqm that include ABW work arrangements. Activity Based Working 17

Conclusion Changes to a work environment impact a multitude of areas including work process, cultural expectations, personal preferences, managerial practices and technology. If any of these factors are overlooked in the development of workplace strategies, then the resulting solutions will be compromised. To be effective, an ABW strategy must be able to provide solutions that optimally integrate people, process, technology and the workplace in support of an Agency s mission, goals, objectives and strategies. Given the tight fiscal constraints facing Commonwealth Agencies, the process to integrate innovative solutions into Agencies operational methods needs to be efficient, affordable and measurable. 18 Advance

About the author James Tonkin Head of Government Business Corporate Solutions JLL James leads a Government business spanning more than 1.4 million sqm across approximately 1,500 sites around Australia. Our government business delivers exceptional strategic, fully integrated services and solutions for many clients such as Department of Human Services, Australian Customs and Border Protection Service, Department of Immigration and Border Protection, Department of Social Services, and National Disability Insurance Agency. James has over 20 years experience in Integrated Facilities Management and Property Asset Management with a detailed understanding of government requirements. Activity Based Working 19

JLL offices Adelaide Level 22, Grenfell Centre 25 Grenfell Street Adelaide SA 5000 tel +61 8 8233 8888 Brisbane Level 33, Central Plaza One 345 Queen Street Brisbane QLD 4000 tel +61 7 3231 1311 Canberra Level 7, 121 Marcus Clarke Street Canberra, ACT, 2601 tel +61 2 6274 9888 Glen Waverley Building 2 540 Springvale Road Glen Waverley VIC 3150 tel +61 3 9565 6666 Mascot Level 3, Sydney Airport Centre 15 Bourke Road Mascot, NSW, 2020 tel +61 2 9693 9800 Melbourne Level 21, Bourke Place 600 Bourke Street Melbourne VIC 3000 tel +61 3 9672 6666 North Sydney Level 27, North Point 100 Miller Street North Sydney NSW 2060 tel +61 2 9936 5888 Parramatta Level 8, 79 George Street Parramatta NSW 2150 tel +61 2 9806 2800 Perth Level 29, Central Park 152-158 St Georges Terrace Perth WA 6000 tel +61 8 9322 5111 Sydney Level 25, 420 George Street Sydney NSW 2000 tel +61 2 9220 8500 www.jll.com.au COPYRIGHT JONES LANG LASALLE 2014. All rights reserved. For further details or to unsubscribe, please email joneslanglasalle.research@ap.jll.com. The items in this publication have been compiled from the various sources acknowledged. The information is from sources we deem reliable; however, no representation or warranty is made to the accuracy thereof.