Relocation: moving with the times

Alongside bereavement and divorce, moving home is one of the most stressful experiences an individual can go through. So how does it compare to relocating an office, where the concerns of thousands have to be considered?

As many firms seek to ride out the recession by relocating, downsizing or consolidating their property options, HR is having to deal with the disruption this inevitably causes employees. But moving offices can be a positive experienceif well handled.

Specialist academic provider Informa’s reasons for moving are typical. In January it closed two London offices and moved its 180 employees into a single site, also in London. While the move is primarily about saving money, Informa has also used it as an opportunity to upgrade its working environment, change working patterns and streamline operations.

“Although this was a cost-cutting move, it’s also about being much more efficient,” explains Keith Brownlie, group HR director.

Reducing space requirements

Informa is not alone. Global commercial property agent Cushman & Wakefield says a quarter of firms expect to cut costs in 2009 by reducing space requirements, with a fifth intending to consolidate staff into one building. Almost 10% are considering moving to cheaper premises.

Meanwhile, vacant office space in London has increased by 36.5% in the last year, and the annual office take-up in central Leeds has fallen by 27% over the same period.

Yet for HR the problem is not so much about organising a move as getting people to happily take part in one, particularly when it’s driven by recessionary pressures and involves relocating to a different part of the country.

Jackie Scarfe, HR director at shipping business Maersk Line UK & Ireland, is tackling this as the firm seeks to cut costs and gain an economic advantage by relocating from London to Liverpool. Along with planning the move, Scarfe has to convince London-based staff that it will benefit them and their families, while assuaging fears that the company is in afinancial hole.

“We are very excited about the opportunities the city will offer us in terms of growing the business,” says Scarfe. “It is our goal to communicate this enthusiasm to our staff.

“Relocation is a big decision for people – they have friends and family, housing and possibly schooling to consider, as well as future career opportunities.”

Maersk has employed specialist relocation company PhoenixARC to provide staff with information on Liverpool, its education system, local housing options, partner employment opportunities and amenities. At the same time, Scarfe has communicated the financial benefits of the move through office meetings, face-to-face conversations, informal and formal staff consultations, and a Q&A section on the company intranet.

New working practices

Manchester City Council has adopted a similar focus on communications for its own office move. The council is temporarily relocating 3,000 staff from a 70-year-old town hall extension so the building can undergo a £165m renovation.

“You don’t just develop these proposals in secret,” explains head of personnel Jon Redfern. “It’s important to keep people informed and take on board their ideas. Like any change project, if people feel it has been done to themthey become disenfranchised, and you’re not going to get the level of support and co-operation you need.”

A large part of this communication has involved new working practices that the refurbishment and relocation will bring. Currently, the town hall extension separates staff into rigidly defined departments, whereas both the transitional office and the upgraded town hall will usher in an open working environment. For some staff this will represent anew way of working, so Redfern has had to focus on the benefits.

“When people come to work they want to be comfortable in their environment, and once they get wind that something might change, the initial reaction is ‘will this have a positive effect on me?’,” he adds.

“So you have to promote the positives as much as possible, which for us means stressing that the working environment will be better. Our employees will be encouraged to think and work differently, and will be able to make better use of technology. It also represents an opportunity for a fresh start.”

Business as usual

But it’s not just financial considerations or the need to modernise working practices that are driving organisations to relocate. Firms such as KPMG have stuck to the mantra of ‘business as usual’ by continuing with long-planned moves regardless of the global economic woes.

In December the firm moved 1,000 of its London staff from Blackfriars to Docklands in preparation for next summer, when 4,000 staff will take up residence in its new, purpose-built headquarters at Canary Wharf.

While some might see this as the height of hubris, given the steepness of the economic downturn, KPMG believes it is an invaluable way of expressing its confidence and optimism. Furthermore, the building has been designed to create space and allow people to work in a ‘fluid‘ way, which is itself aligned to the strategic objectives of the business.

It is very much a case of a building meeting the needs of the business and the people who work within it – which arguably is what an office building should always do, regardless of the economy, argues Mike Blake, head of infrastructure at KPMG.

“The decision is not based on a short-term view,” he says. “It represents a critical, long-term position that we regard the new building as the centre of our UK operations for the foreseeable future – maybe 20 or 30 years.

“Part of the reason we chose Canary Wharf is that it is a crediblelocation,” he adds. “We are going through a downturn of significant proportions but remain confident that its credibility as a business location is solid. It sends out exactly the right message to our workforce and to the market.”

Relocation tips

Mike McChesney, partner in the occupier advisory team at commercial property agent Drivers Jonas, suggests his top tips on relocating in the downturn.

Plan ahead “Relocation often takes around two years from start to finish. So the earlier you start planning, the better.”

Strike a deal “It’s a good time from a property point of view as occupiers are in a position to negotiate very competitive terms on both rent and lease terms.”

Count the pennies “Relocating is an expensive one-off cost, even if there’s a saving afterwards. So make a realistic assessment of this in advance.”

Emergency exit “Occupiers need an exit strategy from their existing premises, as subletting will be difficult. So a forthcoming lease expiry or break is usually crucial.”

Keep morale up “Don’t underestimate the impact low morale could have on your business. Staff may have limited employment options in the current market, but undermined motivation can rapidly unwind in the future.”

Talk the talk “Keep staff informed during the process and make sure they feel included in the decision making by, for example, helping choose the decor of the fit-out.”

Focus on the future “Contrary to common belief, it is easily possible to build in flexibility for growth through subletting or taking out options to use additional floors as and when they are needed.”

Case study – Reed Smith

International law firm Reed Smith has operated on twin sites since it merged with Richards Butler two years ago. This is about to change as its 600-strong workforce moves into a new HQ in Broadgate Tower on London’s Liverpool Street.

Partner Tim Foster led the move. “It has been a long process as we signed lease agreements in September 2007 and began fitting out in summer 2008,” he says.

“In the meantime we have engaged staff through a communication campaign that has involved intranet bulletins, face-to-face meetings, small focus groups, e-mail bulletins, a photography competition and all manner of other avenues to get a sense of the culture people want within the building.

“A couple of things have become obvious. First, you’ve got to pull a lot of levers to gauge interest and get people engaged. Second, you can’t leave it late to get different management streams involved, from IT to facilities to finance, as it’s a process that requires a great deal of teamwork.

“For us it’s not just [about] moving to a new building, but carrying a sense of positive change and investment in our people. In the last six months the downturn has brought some challenges for morale, yet the relocation has provided a positive way of showing we are really investing in everyone. It is an outward expression of our confidence in our people and the future of the company.”

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