(Bloomberg) PricewaterhouseCoopers had a big, expensive problem. Turnover, especially among younger employees, was "dreadful," says Carol Sawdye, the company’s vice chairman and chief financial officer.
So PwC surveyed 44,000 of its employees to find out why. The top gripe was stereotypically millennial: Some 71 percent said their jobs "interfere with their personal lives." Nearly as many wanted to be able to work from home.
Senior executives were in no position to dismiss the complaint. About 80 percent of PwC’s U.S. employees are millennials, and the New York-based global consulting firm wanted to keep everyone happy. "Our people were telling us we needed to evolve," said Michael Fenlon, the company’s global and U.S. talent leader.
To offer more flexibility, the company hatched a plan to convert all of its U.S. offices to co-working spaces, where employees can reserve a seat or an office to work in using proprietary software or a mobile app. The shift could save millions of dollars in recruiting and training, and put a meaningful dent in overhead.
"Real estate is a huge cost in professional services," around 8 or 9 percent of revenue on average, Sawdye says. PwC’s current goal is to drive that down to just 2 percent. The company’s U.S. revenue in the year ended June 30, 2015 was $12.2 billion, which suggests it could save as much as $850 million once the goal is reached.
The potential savings are so big in part because PwC is big, with more than 200,000 employees across the globe. Typically, a company might expect to save $11,000 per year for each employee who works virtually, says Kate Lister, president of Global Workplace Analytics, which tracks telecommuting trends.
At the same time, over the past three years, PwC began giving employees more control over their schedules and allowing them to work from home when needed.
"Our message was: This flexibility is for everyone: for fitness, for recharging, for personal travel,” Fenlon said. “Sometimes it’s for family, but it could also be to go to yoga class." Nearly 90 percent of the company’s employees now "hotel," or share space when they are in the office.
Amanda Miranda, an associate in charge of recruiting for PwC, says she spends an average of one to three days a week in the office. When she’s not traveling, the 24-year-old either works from home, where she can bring her laptop to the kitchen while cooking dinner, or at the library, or once, in the waiting room while accompanying her boyfriend to a dentist’s appointment.
"In comparison with my friends, I have a lot more flexibility at my job,” she says. "It’s a definite selling point."
The Boston office where Miranda officially works was designed to support the new policies. It’s smaller than the company’s previous building by about 18,000 square feet, with a variety of spaces from café-style seating to cubicles to conference rooms that can be reserved online. Miranda’s favorite is the planted patio overlooking Boston’s harbor and the city skyline. She says she comes in for meetings with local colleagues or just to get "human energy.”
The no-office office may be a logical extension of the trend toward ever-less personal space at work. Workers in Manhattan, where real-estate costs are particularly high, have about 25 percent less space than they did in the mid-1990s, said Ken McCarthy, principal economist at Cushman & Wakefield.
"The younger generation likes an open environment," he said. "They have been raised in an environment of much more stimulus around them all the time."
Sawdye, 52, says she too takes advantage of the flexibility. She’s in the company’s New York headquarters only about half the time, and, when not traveling, she works out of her home in Savannah, Georgia. Once she learned the finer points of Google Hangout, she said, “it’s amazing.”
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