When bottom line cost cutting becomes a priority, company executives face intense pressure to deliver results and provide those savings quickly. This can create much angst, as executives struggle with how to meet goals quickly, while thinking strategically about long-range goals.
The solution is to look at cost cutting as a journey, not a quick fix. It helps to think along two tracks simultaneously and look for short-term and long-term opportunities. This is particularly relevant when looking at real estate cost savings, as there are decisions that can have an impact within 90 days, and those that will require much more detailed evaluation.
Begin by reviewing your lease obligation to identify these top five short-term opportunities:
- Extending term
By identifying these types of opportunities and compiling projections on potential cost savings, you can meet short-term, cost-cutting goals. Read more about this low-hanging fruit here.
Next, turn to the long-term real estate plan:
- Employee shifts and reallocations
Do you have the right people in the right locations? How are your employees deployed across multiple locations? How can you make adjustments in human capital for more efficiency in the long term?
Can you make your space—its location, layout and overall vibe—work for you in the recruitment and retention of key personnel and talent?
- Salary and benefit reviews
Are there opportunities to create savings on insurance costs, recruitment or other expenses?
- Overall expense review
Take into account raw space costs, as well as all operating costs
- Employee space utilization
How that impacts leasing obligations, office locations, etc.
In today’s competitive environment, the key to bottom line cost reductions is to strategically look at both short- and long-term priorities. This allows for real estate and other expenses to be properly analyzed and reviewed in a global context.
This type of planning is best implemented with the advice of business consultants and the use of technology that can help assemble information and analyze it in real-time. Transwestern’s real estate intelligence dashboard, Curve, provides corporate executives with powerful data on space utilization and rental rates, for example, to help them take such decisive steps.
Amber Strang serves as the executive managing director of Tenant Advisory Services for Transwestern. Comprising more than 250 tenant advisors, the business assists a growing roster of occupier clients with their local, regional and global real estate needs.