A High Return from Hoteling

In the wake of corporate mergers, managers inevitably confront numerous challenges. Although the coming together of two companies often holds the promise of substantial benefits, managers must look at several areas to avoid duplication and waste. In particular, operations systems must be revised to meet new needs.

In October 1989, partners (or senior managers) at Ernst & Young confronted such challenges when the Ernst & Whinney accounting firm merged with the Arthur Young accounting firm. At that time, Ernst & Young abandoned three separate Chicago locations in order to consolidate its operations on seven floors of the Sears Tower. Noted Mike Thompson, operations and facilities director from Ernst & Young in Chicago, Management’s goal was to consolidate three offices without increasing space costs, as well as to present a unified and positive image of the firm top our clients and the business community. But how?

At Ernst & Young the answer was found in a revolutionary new workplace alternative: hoteling. The root word, of course, is hotel a place where people stay only briefly. Hoteling is a space allocation process that enables companies to support employees who spend most of their time away from the office, without providing them with permanent office space. Instead, through hoteling such employees share office space by reserving space only for the times they need to spend at their home base.

Hoteling has paved the way for dramatic space savings and greater utilization of corporate assets. Since pioneering the hoteling system in its Chicago office, Ernst & Young has been able to decrease space usage by approximately 150 feet per person from 250 feet to 100 feet. When Ernst & Young’s 1,350 employees moved into the Sears Tower in June 1992, about 500 audit and consulting professionals began using office space on an “as needed” basis. Conceptually, the goal was to make the workplace both comfortable and efficient and as economical as we could, said Brian Casey, the Ernst & Young partner responsible for the move. People who are out of the office a great deal of time do not get a permanent office. But they can have a fully furnished technologically equipped office when they are here. When they know they will be in, they just have to call in.

The Hoteling system seems straightforward now, but it did not reach this point without careful planning, Privacy adequate work space and the ability to get telephone calls had to be built in. A huge issue was the ability to take advantage of all of the technologies that were out there. Thompson pointed out.

The Ernst & Young hoteling system operates very much like that of a Hyatt or Hilton Hotel. Ernst & Young has a certain number of temporary offices available, scattered across the seven floors the company occupies in the Sears Tower and employees without permanent office space known as “visiting employees” can call and reserve times to use those worker areas as their offices.

Employees reserve space by telephoning the hotel coordinator, sometimes called the “concierge”, and requesting space. At Ernst & Young the employee can call as late as 4:30 pm to request an office for 9:00 am the following day or 9:00 pm to request an office for 12:00 pm that same day.

Through a sophisticated computer aided facilities management system, the hotel coordinator has immediate access to employees’ company profiles, including their job descriptions and required supplies. With this information, the hotel coordinator scans available space to determine the most appropriate temporary locations for visiting employees, aiming to locate them in work stations as close as possible to their colleagues. Each visiting employee is given a space commensurate with his or her level, from a private office to a cubicle.

Visiting employees have their work materials files, auditor’s papers and personal items – stored in assigned permanent locker are moved to the workspace along with any requested supplies. When the visiting employee arrives, his or her name is on the door, files are in the office and even family pictures are on the desk. In addition, the employees have their own phone numbers which follow them to whatever work station they are assigned. The visiting employee thus access to all tangible materials as well as to personal telephone and computer services, as if the temporary workstation were his or her own permanent office.