Six Things Every Credit Union Should Be Doing to Turn Their Workspace into a Competitive Advantage: Article Four: Evaluating Short and Long Term Occupancy Options for Your Credit Union.

by Michael Downs, Momentum, Inc.

Article One: Defining the Workspace

Article Two: It’s About Your People: Understanding Your Most Valuable Asset

Article Three: A Strong Brand Starts at Home: Building Your Brand in the Workplace

As Credit Unions strive to find and maintain a balance between increased productivity and cost containment, it is imperative that they maintain operations facilities that are capable of supporting their business objectives. As such, the organization must avoid pitfalls such as overinvestment in facilities, excessive occupancy costs or choosing workspace design that lacks long-term flexibility.  For a Credit Union to be able to make the right strategic decisions, it must consider the full range of occupancy options. Ultimately, Credit Unions need to integrate their business plans with their plan for both the short-term and long-term acquisition and disposition of their facilities.

In our previous articles, we took a closer look at some of the key components that form the heart and soul of a Credit Union; its people.  In this article we outline several important considerations and strategies for addressing a Credit Union’s physical space needs, now and in the future.

What Is Strategic Facilities Planning?
Strategic facilities planning provides a framework for better decision-making by connecting organizational goals and strategies with real estate, design and capital development policies and programs. Because strategic facilities planning is a proactive tool, it will help with anticipating change and in determining the best course of action, in responding to ever evolving workspace needs.

The strategic facilities planning (SFP) process integrates a Credit Union’s business plan with its plan for the short-term and long-term use of facilities.  When approaching the SFP process, here are four key points to consider:

  1. Facility planning not only stems from, but also must contribute to, the development of corporate strategic plans related to marketing, finance, organizational, human resources and operational issues.
  2. Senior management must be actively involved setting policy, reviewing findings and making facilities decisions.
  3. The Credit Union’s business plan and historical performance data are invaluable sources of information to the long-range facilities planner.
  4. The workspace plan must be tested against, and integrated into the Credit Union’s business plan in order to be accurately identified as a Strategic Facilities Plan.

The Benefits of Strategic Facilities Planning
As noted earlier, in today’s economic environment, it is even more imperative that the right facilities —- in terms of size, cost and location —- be available to support an organization’s business objectives. There are two types of benefits derived from the SFP process. The more obvious benefits are the acquisition of data and the development of a system for reacting to longer-term facilities needs. Regardless of the size of your Credit Union, an SFP will help you to:

  • Correlate and integrate business and facility planning.
  • Position facilities to complement and enhance financial performance.
  • Establish proactive management practices which will ensure the development of facilities which are appropriately sized, budget oriented and delivered in a timely manner.
  • Avoid unwarranted investment in facilities and operating costs.

Occupancy Options
A typical Credit Union may sometimes have five to eight occupancy strategies that could serve to support its overall business goals. Each of these strategies varies in terms of how it will support the business, brand, flexibility, efficiency, productivity, and its ultimate cost.  Below are some of the common occupancy options.

Remodeling an existing building. This can often be an excellent way to save money, sometimes allowing for a quick occupancy solution, but this plan should be carefully considered when conducting an analysis. Momentum has found that too often, a Credit Union will purchase an existing building without having an underlying strategic facilities plan in place. The result is that it becomes unclear on how the building can impact the organization’s operations and efficiency. Depending on facility’s envelope and mechanical/electrical infrastructure and its ability to support the Credit Union’s business goals, the final cost can sometimes approach the cost of developing a new facility.

Building a new facility.  This is quite often an attractive option and brings with it many advantages. Not only does it provide a modern building and technologies, but it can provide a healthier work environment and operate with efficiencies that can reduce costs. In addition, a newly developed facility can increase the strength of a Credit Union’s brand image, while projecting stability and community commitment.  Clearly the planning, designing, and building of a new facility is not a small undertaking and the process should include consultation with a firm that can provide expertise and guidance throughout the process.

Renovating and expanding existing facilities. Depending on the Credit Union’s short-term and long-term business objectives, and its existing facilities, renovation and expansion can be a viable option. Certain efficiencies may be possible by making minor changes and updates to an existing facility, but strong consideration needs to be given to the lifespan those updates can afford the organization. If renovations will only accommodate an organization’s growth for two to three years, there will be little return on investment.

Leasing new or existing facilities. Leasing can be the least expensive alternative in the early years of occupancy, but becomes increasingly expensive over time.  Projections of occupancy costs over 10, 15 and 20 years will generally show that leasing can cost millions more than ownership. Another disadvantage is that leasing does not offer an opportunity to profit from the sale of a facility, which would typically serve to fund the next cycle of facilities needs.

A Credit Union’s decision on an occupancy strategy will clearly have a very significant and long lasting effect on its overall efficiency and success. As such, it is imperative that the Credit Union fully understands all of the variables related to the cost of leasing, owning, building, or renovating.

Evaluating Current Facilities Operations
Credit Unions must understand and embrace the fact that strategic facilities planning (SFP) is an ongoing process. Once developed, the plan needs to be routinely revisited and measured, in order to confirm when adjustments need to be made. In effect, our starting point will change each time we update the plan.  The process for evaluating existing facilities operations should involve six key areas:

  1. Real estate assets
  2. Individual sites
  3. Building conditions
  4. Work space conditions
  5. Facilities operating costs
  6. Facilities management function

How Much Space Do You Need?
While it seems to be a simple question, the actual process of determining the amount of space needed for a new facility is quite complex and involved. Building or leasing too much space can hamper cash flow with an excessive rent payment and under-utilized space.  Alternatively, too little space can result in limitations throughout the Credit Union’s business operations. This may result in the need to relocate or prematurely expand a facility, which is a very expensive exercise.

The overriding goal is to make sure that the Credit Union’s new space not only meets its functional requirements, but remains adaptable, and projects an image of long term success, commitment, and community involvement.

Projecting Space Requirements
The ability to anticipate change is one of the most valuable benefits of strategic facilities planning. By projecting space needs, an organization can ensure that space will be available to accommodate staff growth, or space can be disposed of in a cost-effective manner when downsizing.  A strategic facilities plan includes staff and area forecasts for each major functional group or department. The team needs to look at three time frames: short-term (one to two years), mid-range (three to four years) and long-range (five to ten years).

Long-range plans provide a context for general financial forecasting and major real estate decisions. Mid-range plans identify needs to begin relocation, consolidation, renovation and new construction projects.
Short-term plans define detailed implementation of specific projects and their budgets.  Space forecasts are most often accomplished with the use of financial facility space standards. For long-range forecasts, square footage projections per full time employee (FTE) may be used instead of the more detailed space standards approach.

Standards programs define a set of relationships between organizational structure, people and the type and amount of workspace they occupy. The use of universal space standards is a very common practice with proven benefits:

  • Increased facilities performance and responsiveness to user requirements.
  • Controlled or reduced costs.
  • Functional and equitable office assignments.

One of the biggest challenges in space forecasting is projecting future staffing needs. Such projections are usually tied to a Credit Union’s strategic business plans. Many Credit Unions use one, three and five-year human resources forecasts in their business planning cycle. In the absence of staff projections, or to project further into the future, ratios between revenue or production volume and staff can be developed using peer group and historical data.


Typically, the first step for determining a Credit Union’s space needs is to establish a baseline using existing facilities as a benchmark.  Based on the current and expected asset growth of the entire Credit Union, calculations can be performed and then graphically plotted to represent future needs over 10, 15, and 20 years (Figure 1).
Figure 1

In addition, departmental space needs should be determined, based on the overall growth projections of the Credit Union.  This is accomplished through comprehensive surveys, discussions with department managers, and interviews with principal leadership, in order to ascertain the short and long term space needs per functional department (Figure 2).
Figure 2

Key Measurements to Consider
There are a series of metrics, which are invaluable for analyzing the efficiency of any Credit Union workspace, looking at both existing and planned spaces. These metrics form the yardstick by which you will need to measure the potential workspaces and departmental layouts. These projections take the form of a series of ratios, with the most common ratios listed here.

Gross Density Ratio. One ratio which is very helpful is to determine your current Usable Square Feet (USF) per person ratio. While this will give you a general idea of the density of your existing space, if you are considering a significantly larger or smaller office, extrapolations using this ratio can be misleading, as not all rooms or spaces grow or shrink proportionally. For example, the amount of space dedicated to support areas and rooms, such as server rooms or copy/mail areas is not usually directly proportional to the number of private offices or open workstations. Additionally if you plan to adjust the office-to-open workstation ratio in the new office, this will change the gross density ratio. Typically this ratio ranges from 225 USF/person (and lower) for densely planned, larger, all workstation offices and up to 350 USF/person for smaller, private office areas with frequent in-office member/coworker meetings.

Enclosed to Open Ratio. This is the number of staff in private or enclosed offices compared to those in systems furniture or open workstations. Enclosed offices take up more space on a per person basis, so this ratio can have a direct impact on total space required. It also will have a big impact on the corporate culture and it can affect how a Credit Union is perceived in the marketplace, by both members, staff and potential candidates for hire. As we discussed in previous articles, both enclosed and open spaces can be appropriate for Credit Unions and depend on many factors within the organization. Security, communication between staff, levels of hierarchy in management and other cultural factors all play a role in the definition of this ratio.

Conference Room Ratio. The ratio between the number of staff served by each conference room is another key metric for programming a space requirement. Credit Unions operating in predominantly open office environments tend to need more rooms for private meetings between staff, both for small, personal meetings as well as for large team or group meetings. This ratio can range from one conference room to 10 employees in an all open office environment, to one conference room per 20 employees in a private office-rich environment.

Circulation Factors. The natural inclination in calculating space needs is to simply list all the spaces needed, along with their respective sizes and arrive at a total square footage requirement. However, additional space should be allocated to account for hallways, restrooms, elevators, stair towers and other circulation paths within the Credit Union’s space.  This can vary dramatically depending on how efficient a layout that can be accomplished within a given building footprint.

For example, the dimension between the outside wall of the building and the interior building core rooms (toilet rooms, elevator shafts, etc.) should allow for space to give access to one or more rooms on each side of the hallway. A low dimension here will likely mean only one side of the hallway (referred to as “single loaded”) will serve the rooms, and the circulation factor in this type of area will be higher. Where this dimension is adequate to serve rooms on either side of the hallway (or “double loaded”) this area is more efficient and will have a lower circulation factor. Usually for early planning purposes this factor is established at 25-35 % of the room/workstation area. Once again, the enclosed office/workstation ratio will affect this number. Your space planner needs to understand the unique factors that differentiate a Credit Union’s needs from that of a traditional office workplace.

Sizing the Rooms. This is where a space planner needs to begin listing the numbers of staff and their respective spaces. The size of the spaces naturally will affect the overall building square footage, so extreme care must be taken in order to size the rooms appropriately for the given activity.

Private Offices. As discussed above, the number of offices will be directly related to the degree to which a Credit Union’s space is determined to open versus closed.  An office area of 20’x15′ can easily accommodate a senior executive desk, credenza, a conference table for 4 people and lounge seating for 2-3. This size is not uncommon for the CEO’s office in small to mid-sized Credit Union.

An office of 15’x15′ can include an executive desk and credenza, a conference table for 3-4 people and either a bookshelf or a small sofa for 2-3. This size is what we normally recommend for vice-presidents of mid-sized organizations.

The 10’x15′ office is very prevalent these days and can fit a mid-manager’s desk with return, two guest chairs and a bookshelf.  Some offices at the smaller end of the spectrum are 10’x12′ or an even smaller 10’x10′. At this size, a standard size desk and return are possible along with two guest chairs.

Conference Rooms. The appropriate size for a conference room depends on a multitude of factors (i.e., privacy, maximum group size, typical group size, frequency of use, video and teleconference requirements); however if you allocate 20-25 USF per seat in the early planning stages, you will be allowing sufficient space which can then be fined-tuned in the SFP, and in the subsequent design phase

On-site Training. Credit Unions that are dedicated to keeping their organization current in terms of advances in technology are typically committed to the ongoing training of their staff. Therefore their space program will include a need for dedicated, in-house training rooms. If you plan on utilizing tablet arm type seating allow 20 USF per person. If your training involves staff seated at tables with computer monitors, allow 50-60 USF per person. AV systems, white boards and conferencing capabilities are treated as if one were in a classroom environment.

The Action Plan
When developing facilities plans, Credit Unions should accept the fact that change in the workplace is inevitable.  A sound strategic facilities plan is incredibly valuable when it acknowledges the probability that target space projections will change, and a solid plan identifies a reasonable range of alternative possibilities.

Strategic facilities planning is not a “one-size-fits-all” exercise, as each Credit Union has unique goals, employees, communities, leadership and member bases.  However, these general guidelines provide a good framework for reference:

  1. Identify the gaps between current conditions and future facilities requirements.
  2. Evaluate in each situation, how existing facilities do not satisfy internal and external business requirements.
  3. Identify general, long-range strategies to improve facilities performance.
  4. Test several alternative “macro” strategies and select the best plan; the long-range plan.
  5. Refine the macro plan into a more specific construction, phasing and financial plan—the mid-range plan.
  6. Update the plan as needs and conditions change.
  7. Develop implementation plans, including timetables, for specific projects called for in the long and mid-range plans– the short-term plan.


•    Aliotta, J. and Carlson, S. “When Is It Time to Relocate?” FacilitiesNet.
•    Day, L. L. ‘‘Facilities’ Role in Strategic Planning,’’ Industrial Development.
•    Fennie, Jr. F.  “Space Planning: How Much Space Do You Really Need?” The Space Place.
•    Helou, P. A Guide to Strategic Facilities Planning.
•    Mount, S. K. ‘‘Strategic Facilities Planning as a Component of the Business Plan,’’ Industrial Development.
•    Pittman, R. H. ‘‘Integration of Real Estate into Corporate Strategy: a Progress Report,’’ Industrial Development.

This is the fourth article in the six part series Six Things Every Credit Union Should Be Doing to Turn Their Workspace into a Competitive Advantage by Michael Downs, MBA, CFS and Greg Barrett, CFS. Keep an eye out for five next Monday: Developing an ROA Projection for Your Workspace Plan.

Article One: Defining the Workspace

Article Two: It’s About Your People: Understanding Your Most Valuable Asset

Article Three: A Strong Brand Starts at Home: Building Your Brand in the Workplace
This series is co-authored by Michael Downs and Greg Barrett of Momentum, Inc.  Mr. Downs holds both a Bachelors and Masters of Business Administration, completed the ABA School of Bank Marketing at Southern Methodist University, and has more than twelve years of experience working with clients on strategic planning and marketing.  Mr. Barrett holds a Bachelors of Science in Finance and has worked with and for financial institutions for more than nineteen years.  Mr. Downs, Mr. Barrett and the Momentum team work with credit unions to facilitate strategic planning, evaluate facilities growth needs, and implement systems for ongoing measurement and benchmarking. Learn more at or connect at

Michael Downs

Michael Downs

Michael Downs is the Vice President of Client Solutions at Momentum, a strategic design-build partner that takes a people centric approach to helping credit unions across the nation thrive. Web: Details