Office consolidation is a basic cost-reduction tactic organizations use to lower real estate expenses. By strategically merging offices, companies can downsize their portfolios and offload under-utilized square footage without disrupting operations.
The normalization of hybrid work, which allows a larger population of employees to share a smaller pool of resources, makes office consolidation a practical option for many organizations. Capacity is one of the main parameters for deciding which locations to consolidate (and into which offices), and using a hybrid model allows organizations to be more flexible with capacity.
Office consolidation is a major undertaking, so it’s worth ensuring that you maximize your returns. This means considering more than current utilization and cost metrics. Making your decision based entirely on potential cost savings is simple and straightforward, but it can lead you to overlook better office consolidation opportunities and shortchange your organization over the long term.
With a more thoughtful approach to office consolidation that considers the holistic impact of changes to your space, you might find opportunities to consolidate offices in ways that cause less employee turnover, generate greater overall cost savings in the long term, and better align with your business goals.
In this article, we’ll help you go beyond cost metrics and utilization and walk you through essential considerations and processes your organization must use to ensure you get the best results from your office consolidation efforts.
Consolidate offices based on critical lease dates
Every lease in your portfolio presents different windows of opportunity to consolidate offices. Depending on the size of your portfolio, you may have a handful or hundreds of consolidation opportunities every year, including renewal windows, break options, and lease termination clauses.
Planning your consolidation efforts around these opportunities ensures you capture the benefits of consolidation sooner—because you don’t have to wait years to move forward.
If you’re manually creating and monitoring lease schedules, you run the risk of missing these windows, and losing some of your best chances to consolidate locations. Modern lease administration software automates this process and alerts you before key dates arrive.
More specialized solutions like Tango Portfolio Strategy even visualize upcoming lease expirations with GIS mapping, color coding each location based on how soon your lease is expiring. Learn more.
Don’t just rely on high-level utilization data
Underutilized space is one of the clearest signals that office consolidation is warranted and worthwhile. If not enough people are using an office, why keep paying for it? But most organizations only have high-level occupancy data, like badge swipes, so they have a rough idea of how many people use a location, but not how they use it.
This affects office consolidation in a few different ways.
Without more granular space utilization data, you can only estimate how much of each type of space employees need—and every employee population has different needs depending on their collective roles, preferences, and work habits. One location may have high occupancy levels in their meeting rooms all day—perhaps they even create informal meeting spaces just to keep up with demand—while at another, the meeting rooms sit untouched. When you only use high-level data to consolidate locations, you may end up with the right amount of workstations, but not enough of other types of space.
Most office-based organizations don’t have detailed visibility into space utilization, particularly when it comes to unassigned and unreservable spaces. And installing and maintaining sensors can be prohibitively expensive—especially if you plan on consolidating offices. Tango Occupancy offers a low-cost alternative for comprehensive utilization data: network-based occupancy monitoring. By mapping ethernet ports and triangulating wireless connections, it anonymously tracks occupants’ approximate locations. Learn more.
Without granular space utilization data, you may also miss consolidation opportunities by overestimating how much space employees need to work effectively. An office that appears to be well utilized may actually have enough underutilized space to justify consolidating it. Or, maybe that space could be reconfigured to increase your capacity and allow it to accommodate employees from another location.
Utilization, both high-level and space-specific, is an essential consideration in office consolidation. But it shouldn’t be the only factor you look at.
Consider employee commutes
No matter what you do, office consolidations will almost certainly have some impact on the employee experience and could increase turnover. But you can and should reduce this impact by minimizing the disruption they cause to employees’ lives. If consolidating offices adds an hour to someone’s daily commute, they’re a lot less likely to move with their workplace, and you have an uphill battle to retain them.
This is an area where GIS mapping can help you make more holistic consolidation decisions. With a tool like Tango Portfolio Strategy, you can put your portfolio on the map, then use employee zip codes to see where the largest concentrations of employees live. As you consider which locations to consolidate, close, or renew, you’ll get a better understanding of how these choices impact employees, including the likely turnover caused by changes in commute. You can even filter buildings by drive time—so if you’re considering closing a building, you can see other locations that are within a reasonable commute for the people who currently work there.
Evaluate the surrounding area
An offices’ layout, capacity, and commute time aren’t the only qualities employees care about. What’s available in the surrounding area can have just as much effect on their job satisfaction. As you compare possible consolidation opportunities, consider the local availability of public transportation, restaurants, recreational activities, schools, and other points of interest that make a workplace more or less desirable to employees.
Much like changing commute times, changing the surroundings of someone’s workplace directly impacts how they feel about going to work, and how comfortable they are with their new office.
Note: Local demographics should play an important role in consolidation decisions as well—merging offices into a location with a shallow hiring pool could make it substantially more difficult to fill skilled positions in the future.
Compare costs, not just utilization
At first glance, an underutilized location is an obvious candidate for closure. Wasted space is “the fat” of your portfolio, and trimming it would quickly generate cost savings. But taking a broader view of underutilization that considers underutilization within your entire portfolio, not just a specific location, can open the door to more valuable possibilities.
That underutilized office may be significantly more affordable than one or more well-utilized offices nearby. Instead of moving the employees from the underutilized location to a different one, you could generate greater savings by bringing employees there and removing the more expensive office from your portfolio.
Space management capabilities like stack planning make it easier to see a greater range of office consolidation possibilities. Our space management software, Tango Space, lets you visually categorize space within individual buildings and locations, or multiple locations within your portfolio. So you can see all of the underutilized space in a cluster of locations, and rearrange the combinations of space to find the optimal ways to consolidate offices into the most affordable locations.
Re-examine your hybrid work policy
Your hybrid work schedule directly impacts your building occupancy levels. The more time you require people to be in the office, the greater your occupancy levels will be. Dialing back required time in the office reduces occupancy levels and overall utilization, thus creating new office consolidation opportunities. Fewer people in the office means you need less office space. Make these policy adjustments across your portfolio, and you can create new consolidation opportunities.
The challenge is understanding what kinds of adjustments you need to apply to your hybrid policy to make consolidation more feasible. One option is to test the impact of incremental changes, like requiring one less day in the office per week or month. But if you have visibility into occupancy data, a real estate planning solution like Tango Portfolio Strategy can use your current occupancy levels to forecast the impact of these changes across your portfolio. You’d still want to monitor the actual outcomes before moving forward with consolidation plans, but modeling the effect of policy changes can help you determine what changes will likely lead to the consolidation options you want.
Streamline the MAC process
Once it comes time to actually consolidate offices, a lot of changes need to happen at once, both within your systems and your physical space. You need to reconfigure your space and prepare workstations and equipment for an entire office full of workers to move into another space.
Even with careful planning, the scale of move management during office consolidations can be overwhelming, and individuals are bound to request changes to make their new space fit what they were accustomed to at their original office.
Manually coordinating and recording every move, add, and change (MAC) event can create disruptive operational delays as you consolidate offices. Employees, teams, and departments will inevitably wind up waiting longer than necessary for the spaces and resources they need to work effectively—and your space planners will be bombarded with MAC requests (or requests for status updates) during major transitions.
Enterprises can resolve this issue with cohesive, intelligent MAC processes that reduce the burden on space planners without compromising space management data or plans. With a comprehensive space management and planning solution like Tango Space, space planning leads can give relevant staff limited access to your space management system, allowing them to monitor, review, assign, schedule, or even approve MAC requests. While in most cases, you’ll want tight control over approvals, giving better access to other parts of the process helps each transition go smoother and limits the workload they represent to your space planners.
Most importantly, confining the entire process to your space management solution ensures that everyone is working from the same information and has visibility into the status and assigned location of employees and assets. You can recognize when two employees have requested the same asset or workspace before it becomes a problem, and reduce the human errors caused by spreadsheets and other informal MAC solutions.
Office consolidation involves a great deal of move management. So making your organization’s move management processes more efficient and less error-prone can significantly improve your ability to effectively merge multiple locations and facilitate a smooth transition.
Get more from office consolidation with Tango
You want a leaner, more cost-efficient real estate portfolio, and office consolidation is an excellent strategy to make it happen. But without the right tools, you’ll miss some of the best consolidation opportunities. Tango Space is your operations center for planning and implementing consolidation scenarios and managing your office space. Tango Reserve is a comprehensive reservation system that gives you complete control over who can access what resources. Tango Occupancy gives you granular occupancy data by leveraging your existing network infrastructure, so you have better visibility into underutilization. And Tango Portfolio Strategy helps you explore consolidation possibilities at scale, foreseeing the impact each decision has on your offices and the people who work there.
You get visibility into occupancy levels at every relevant location in your portfolio, shared lease data so you can track (and map) upcoming renewal windows, and a hub for strategic decisions and analysis to model changes and forecast outcomes.
Want to see how Tango improves your office consolidation efforts?
