A Place in the Office by Reservation Only : Workplace: O.C.’s Ernst & Young tries ‘hoteling’ to save money, but some who have had to give up their offices are not happy.
When some of Ernst & Young’s Orange County employees headed home last weekend, they left their offices for the last time.
On Saturday, the giant accounting company eliminated three out of four private offices in the space it leases in Orange County. The employees who had been in those quarters now call ahead to book offices when they need space--just as they might reserve a hotel room.
The cost-saving but controversial technique, called hoteling , shuffles employees in and out of offices that they share. The Ernst & Young staff sets up work areas that can be used when needed by people such as auditors and consultants who spend most of their time out of the office. When one employee “checks out,” the staff prepares the office for the next “guest.”
Ernst & Young is one of the first large Orange County employers to try the technique. The firm has moved about 110 workers out of 36,000 square feet in the Great Western Bank building in Costa Mesa to 34,000 square feet in Koll Center in Irvine that was already being used by an almost equal numbers of its employees. Roy Brown, the firm’s managing partner for Orange County, said the consolidation will allow Ernst & Young to cut its office-space costs by 35% to 40% because it can now sublet the space in Costa Mesa.
Lynn George, director of administration for Ernst & Young’s western regional management consulting practice, said, “We look at hoteling as a way to be cost-effective by reducing one of our largest fixed costs: occupancy. . . . This makes people more organized and productive.”
Despite the savings, the consolidation is not universally popular, George said, because many senior managers who have had their own offices for years are not happy about giving them up.
“They didn’t like it, and it is a morale issue,” she conceded. “In the culture they were raised in, you reached a certain level of status, and part of that was your own office.”
The change was not sprung on them without warning, though, she said, noting that hoteling has already been implemented in Ernst & Young offices in Los Angeles, San Jose, San Francisco and Chicago during the past year. Phoenix, Sacramento and Seattle are next on the list, George said.
Only a handful of large employers nationwide have switched to hoteling. Among them are IBM, accounting firm Arthur Andersen & Co. and Dun & Bradstreet Corp. Some large companies, like computer maker Hewlett-Packard Co., have backed away from hoteling plans because of concerns about the effect on employee morale.
George said several Los Angeles and Orange County law firms have approached her to ask about hoteling and how well it has worked for Ernst & Young. But the practice is not yet taking Orange County by storm.
“This is the first I’ve heard of it, and if it were a major trend we’d know,” said Bob Osbrink, sales manager for real estate brokerage Grubb & Ellis’ south Orange County operations.
