Musical Chairs Looking to save on steep office rent? Hoteling could help cut your overall expenses.
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Two years ago, Lou Hoffman noticed many offices at hisprofessional services firm in San Jose, California, often sat emptywhile their occupants traveled or visited clients. When Hoffmanactually figured out how ineffectively he was using his overalloffice space, the amount of money being wasted made him squirm.
It turns out only 45 percent of the Hoffman Agency's spacewas being effectively utilized. After searching for ways to improvethe situation, Hoffman discovered a concept called hoteling.
An emerging facilities management strategy, hoteling doesn'tassign employees desks for their permanent, personal use. Instead,workers use a desk for as little as a few hours, relinquishing itto the next employee once their work is done.
Employing hoteling helped Hoffman set up a system where, forone-third of his 65-person work force, two employees shared asingle desk on a rotating basis. Additional temporary workstationshelped handle occasional space conflicts and overflows. As thecompany grew, Hoffman was able to stay in the same space,postponing paying an extra $10,000 in monthly rent, for 10 months.Adding the cost of rent plus savings acquired from not having torelocate or furnish a new office, Hoffman figures hoteling savedhim approximately $130,000 in less than one year.
Those are the kinds of numbers that get companies'attention--firms from IBM to Merrill Lynch have been utilizinghoteling. And despite some drawbacks, indications are that they,along with many other firms, have checked into hoteling for anextended stay.
"What drives big companies to considerhoteling--flexibility, space-use efficiency, functionality andsensitivity to individual work schedules--also works for smallcompanies," says Ted Hammer, senior managing partner with HLWInternational, an architectural and engineering firm in New YorkCity. "It's not a big or small thing; it's aproductivity thing."
Mark Henricks is an Austin, Texas, writer who specializes inbusiness topics and has written for Entrepreneur for nineyears.
Be Their Guest
Hoteling started about five years ago, spearheaded byprofessional services companies such as the major accounting firms.The innovators tended to have big hoteling facilities,warehouse-sized blocks of desks with bustling concierges upfrontdirecting workers to their temporary locations, funneling messagesto the right phones and otherwise keeping things under control.More recently, operators have been reconfiguring their facilitiesto offer hoteling-like arrangements to a wide variety ofcustomers.
Most early users reported success with the tactic. That,combined with rising real estate costs and falling prices forinformation technology, have made hoteling one of the hottestcurrent concepts in facilities planning and management, saysHammer.
"We probably haven't had a client in the last fiveyears who hasn't asked about the concept," says Hammer.What companies researching hoteling are finding is a technique thatoffers alluring cost savings--but only for those who master itsintricacies.
Checking Out Checking In
Successful hoteling starts by involving all members of yourcompany in the planning stages, Hammer says. Only when youaccommodate every interest, from financial to personal, can yourhoteling plan work. "Those that try to implement it but onlyconsider the real estate [aspect] don't succeed," Hammerwarns.
Much early work must be spent creating definitions andguidelines. For instance, entrepreneurs must decide which membersof their staff will be candidates for hoteling. (Hoffman says inhis company, any employee whose job takes him or her out of theoffice more than 33 percent of the time is a potential candidate.)Entrepreneurs must also specify the technology that will beinvolved, from laptop computers and cell phones to the morepowerful network servers and remote control software that arelikely to be needed at the office.
Creating a consistent hoteling policy is important for a varietyof reasons, says Karol Rose, managing director at Dependent CareConnection, an alternative workplace consulting firm in Westport,Connecticut. "Otherwise, it becomes an employee-relationsnightmare," she warns. "Managers don't know what theycan offer, human resources has to get involved in everyarrangement, and it becomes very labor-intensive."
Consistency also allows entrepreneurs to provide a uniformmessage to employees, recruits and others who may look askance atthe idea of an office job that lacks a permanent desk.Communicating the reasons and rewards of hoteling to workers is acrucial but often overlooked part of successful implementation,says Jim Miller, general manager of extended workplace solutionsfor US West in Englewood, Colorado. Although the former Belloperating company makes its money by selling technology tocompanies implementing hoteling, Miller says technology is onlypart of the answer.
Along with communication, training and support are also keycomponents. Users have to be trained to quickly learn and useslightly different computer and telephone setups. Informationtechnology support staff may also have to be beefed up. The HoffmanAgency, for instance, has two full-time IT support people, twicewhat Hoffman estimates he'd need without hoteling.
The Inhospitable Hotel
Paying attention to details is no casual matter. A poorlydeveloped hoteling arrangement may wind up costing, rather thansaving, a company money. One risk is that the company will, thanksto its new office setup, become unattractive to new recruits.That's especially true when it comes to recruiting seniorexecutives, says Hoffman.
"People who've been in the work force for 10 years ormore are used to having a luxurious corner office," Hoffmansays. "It takes a certain amount of salesmanship to make thecandidate understand that hoteling helps the company, which in turnhelps the employee."
Existing employees may also become estranged by an inhospitablehoteling setup. It pays to treat the implementation of hotelingwith the same care Conrad Hilton might have used to open a newresort. For instance, major issues concerning lighting and officesupplies arose not long after Hoffman's company beganhoteling.
While the problem with the lamps in the temporary workstationswas easily remedied, the office supply dilemma was more difficultto solve. People who came in to work were frustrated to find thatthe station's previous occupant had absconded with pens, paperand other supplies, Hoffman says. His solution? Assign ahousekeeping staff, similar to what a hotel uses to keep its guestrooms in order, to stock hoteling desks with necessities.
Hoteling may not be the easiest change you've tried toimplement, but those who have tried it say it works a lot betterthan you might have imagined. "I'm amazed more peopledon't do it," Hoffman says, "because the benefits areso compelling.
Next Step
- Alt.office (http://www.altoffice.com), is anonline journal and site with a variety of articles, information andlinks regarding hoteling and related topics.
- Creating a Flexible Workplace, by Barry Olmsted andSuzanne Smith (Amacom). Although the second edition, published in1994, predates hoteling, it presents sound fundamentals foralternative work arrangements.
Contact Sources
DCC, fax: (203) 291-3571, http://www.dcclifecare.com
HLW Architecture, 115 Fifth Ave., New York, NY 10003,(212) 353-4609
