The Effect of Site Selection on Relocation
Issue 28 - Mar 07

Whatever new office site is selected will affect top-line
performance businesswide, either positively
or negatively. With bottom-lines rising in this landlord’s
market, don’t be the one responsible for squeezing the margins
even further!

When you are in the midst of brokering a real estate deal, a number of factors seem so prominent that considering the effect of your decision on other parts
of the business can seem of distant importance. The money, the pressure to get the deal done now and making sure legalities are duly completed can get in
the way of understanding that this ‘deal’ will affect the entire organisation, not just the fi nance department. Having a process in place that allows real estate and
fi nance to understand how their decisions will affect IT, HR, marketing and all the other business units will mean a successful relocation this time and the next.

space-saving
In Hong Kong’s over heated offi ce rental market, many companies are either moving to less costly buildings or downsizing to save on monthly rents, in some cases, such as for Gartner, they are doing both.

Gartner’s bottom line was being affected adversely as rents had doubled in their existing location. The only fi nancially feasible option was to reduce the amount of space they took up and move. Monthly outlay is still signifi cantly higher then before but it has helped the bottom line significantly.

On the other hand, in the mind of the Garther’s general manager, the move has
made life more diffi cult in other ways, and he views the focus on the bottom line as somewhat short-sighted. A less prestigious “B-“ offi ce building does not send out the same message to clients as their previous location and this, combined with less space, means that meetings often have to be conducted outside, in coffee shops or elsewhere.

allowing for IT
Gartner was fortunate that their IT requirements were not compromised by the new space, whereas for other companies the location of the new offi ce can provide a number of technical hurdles. PTS’s Fry says that IT requirements are so important for companies now that the IT manager has to be brought in at a very early stage of the relocation project. He also recommends working with a company that specialises in relocation project management for IT systems specifi cally, because in many cases relocation requires the replacement of many components.

Caldwell says that for their company “seamless connectivity” between the old and the new sites, was an important criteria that was emphasised repeatedly. This was also the case for Agence France Presse (AFP), a news wire that has contracts with its customers to keep their service news service running 24 hours a
day, seven days a week. Pierre Andre-Romagny, Technical Director, Asia Pacifi c, AFP says that in order to maintain a 24 hour news service they created a “shell” of the new offi ce’s IT systems fi rst. Then one by one it relocated the circuits for each of the 28 regional bureaus which that offi ce supported. (RFP 2006)

Fry says that problems he has encountered range from the logistical
to the technical, and having experienced IT project people, as well
as people who know the specifi c IT needs of the company, will make the project run more smoothly. In a dedicated presentation at the end of the Corporate Relocation and Change Management Conference, Fry gave concrete examples about how site selection can impact IT, from the lack of adequate power or infrastructure to support the company’s needs to fi nding the server
doesn’t fi t into the lift on the day of the move.

Location of mission critical facilities, such as datacentres, is also a highly sensitive issue, says Brenner. He also noted that companies should be
aware not just of what is wrong with the location, in terms of power, accessibility, security, but what might be perceived to be wrong with it. He uses the example
of one state-of-the-art datacentre that corporates avoid because they perceive that being located next to a gas works it is an unacceptably risky place to store
mission critical there. However, in reality, the location is no more risky then anywhere else, yet for reasons of perception still lies dormant.

Getting feedback from staff should be built into the relocation process
early. It might be discovered that staff have ideas or concerns
that contribute to making the relocation more successful from a
human resources perspective.

spin-doctoring
The problem of perception is where the biggest risk facing site selectors and move managers can be found. It is also the reason why those people whose
job it is to manage perception, that is marketing and communications specialists,
come into their own. Brenner, Caldwell and Fry agree that making sure that details related to the move are communicated to staff is vital.

Caldwell says attrition is a serious concern for companies that relocate. This risk rises the further the distance from the original location. People are set in their ways, have made housing or other choices (such as gym membership etc) based
on the offi ce location. He said relocation more successful from a when he announced the move of their Bangalore offi ce from down town to a location
closer to the airport “people started resigning”, because for some staff the movement a commute time of up to two hours. The company offered to supply home to work transportation for affected staff, and the problem was contained.

IT requirements are so important for companies now that the IT manager has to be brought in at a very early stage of the relocation project.

the real problem
One delegate at the conference asked what would be the best way to deal with the
risk of losing good staff prior to or after a move. Caldwell answered “communication”. When Juniper moved in Hong Kong they communicated at every step along the way, by organising picnics in the new offi ce, showing staff the space in “bare shell” state and letting them know what was happening and the timeline. Juniper consulted staff on many of the decisions to give the eventual occupiers of the space a sense of ownership. This paid off later because when people started complaining about who was going to sit where, or how much space they were being allotted, the company could justify its decisions as having been made by the employees themselves. If the company is seen to have been reasonable, says Caldwell, then it can legitimately ask the staff to be reasonable.

Getting feedback from staff should be built into the relocation process early. It
might be discovered that staff have ideas or concerns that contribute to making the relocation more successful from a human resources perspective. One overlooked area is food. Close to the hearts of all employees is the availability of a variety
of lunch, breakfast or dinner options. Survey the area and communicate the fi ndings back to staff. If there appears to be a problem take suggestions on how to
remedy it.

In India, says Caldwell pretty much every offi ce facility will have an in-house canteen, which helps keep down attrition in a couple of ways. Firstly, it is a perk that keeps workers happy. Reuters, for example, have a number of catering companies whose contracts rotate monthly in order to keep the standard and variety of food high. Caldwell says that providing food services in-house is not just because other food options are not available nearby, but also to reduce the opportunities for staff to leave the building and be offered positions with rival companies.



Communication with staff is important but be wary of how it affects other aspects of the move process. Brenner points out that if a company has not yet
signed a lease or if other negotiations are still ongoing, communications could jeopardise a company’s bargaining position.

However, with attrition levels still high, methods for
keeping the turnover rate low is vital. When Juniper moved an entire offi ce from one Hyderabad to Bangalore, an impressive 42 out of 45
staff stayed with the company. Due to the number of staff each person was treated as if they had been relocating as part of an individual internal company relocation, with incentives and relocation fi nancing built into their new packages.

process obstacles
Move managers should be aware of cultural concerns that will infl uence change
and move management. Whether a company decides to implement an entire change management procedure or not, some factors have to be built into the process regardless. For example, Brenner suggested that principals of Feng Shui should be taken into account at a number of stages in the process.

Firstly, there are particular buildings that are considered to have bad Feng Shui,
especially for particular industries. However, Brenner would not advise a client not
to move into a building for this reason alone. If the building is right for the company
in all other areas, in today’s tight markets it might be the only choice. Instead he
recommends getting in a Feng Shui expert who will work with the designers and
the company to defl ect any negative energy by locating certain functions in certain
locations or using particular colours and materials.

Caldwell says there is a corner of their Hong Kong offi ce that was considered to have particularly bad Feng Shui by many staff. Fortunately it had a great view and so was allocated to international staff, for whom Feng Shui was less important than the view out the window.

The other way that principals of Feng Shui can affect the new offi ce relocation process is dates. The date of the move and the date the new offi ce is offi cially opened are understood to have an impact on the long term success of the business of the company in that location. But again, rather than reject an otherwise convenient schedule, there are ways to build a more auspicious date into the process. For example, many companies will simply get someone to go in on the day viewed as being the best day for the location to open and turn the lights on or start just one worker (often the IT department).

Though these measures may seem overly cautious the potential losses caused by unproductive, uncooperative and demoralised staff will hit the top line, and have a big impact on profi t margins, far harder than effect of a few dollars per square foot per month. When considering the next offi ce move, don’t consider it as just a matter of calling a removal company. The site selection process should involve and affects every department in the building, not least are IT, HR and marketing. RFP

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