October 27, 2015
There are generally four main reasons why a business considers changing to new office space: your business is growing and your existing office can’t be expanded to accommodate that growth; your need for office space is reducing due to a change in business circumstances; your office lease is nearing expiration: you are prepared to explore whether a change in office could improve your current business performance. It is the last of these four reasons that sits at the heart of this article, but that does not detract from the validity of the other motivations for investigating options for new office space. Changing office space requirements and/or the fact your lease is expiring do not preclude searching for new ways to improve business performance. In fact, they provide a compelling excuse to explore alternatives and often organisations choose to move for a number of good reasons.
There are several key areas of risk and opportunity that exist when occupying office space; and they are:-
- Strategic: How can I choose an office that best suits my business?
- Reputational: How can my choice of office enhance my brand and positively affect my clients?
- Operational: How can my choice of office increase operational efficiency and workplace productivity?
- Resources: How can my choice of office attract the best and brightest staff to my business and keep them happy and healthy?
As a result of considering these questions it is possible to shift from a worst case scenario in which the business is unable to pay its bills to one in which costs are completely offset by performance gains in the business
The following describes seven ways where your choice of office can boost the performance of your business to the point where the direct costs of leasing office space become a less significant factor in your decision making. They are:
By unlocking business benefits associated with the economics of agglomeration
The concept of clustering businesses together that share common goals or synergies is not new and has been shown to be beneficial to the performance of many businesses. It may be as simple as improving supply chain logistics or as sophisticated as exploiting the creative tension that might exist between partners and collaborators (and even competitors) to produce innovative products or services, taking advantage of the potential for economies of scale. When the right types of businesses are co-located, there is a multiplier effect in scale and an increase in business performance can be expected. When assessing a prospective office location for any business, this opportunity needs to be taken into account.
By attracting the best and brightest staff to your business
The standard of office facilities provided and the quality of the working environment has been described as one of the main reasons for high employee turnover rates. Staff turnover costs are often underestimated by businesses and can range significantly depending on industry, level of job complexity and seniority. Hence, the savings associated with reducing turnover can be substantial. Attracting and retaining the best employees should be a key strategy for any business serious about maintaining and increasing their profitability.
By fostering a happy and healthy workforce
The choice of both the building and office configuration (layout and fit-out) can significantly affect the physiological and psychological performance of staff. Issues ranging from thermal and visual comfort, indoor air and acoustic quality through to active transport modes and the proximity of food, retail, entertainment or service amenities can all actively contribute to the health, well-being and, thence, performance of the workforce.
By improving operational efficiency and workplace productivity
There are many offices that operate quite inefficiently, whether it’s due to the way in which they discourage staff interaction and collaboration or just because there are large areas of underutilized space caused by the building’s structure or the shape of the building’s floor plate. A more efficient office layout or even workplace style such as Activity Based Working (ABW), coupled with changes in mobile technology, communications and digital platforms, could yield significant cost savings and improved productivity for a business. These initiatives are, therefore, worthy of careful investigation.
By taking care of your bottom line in the face of future energy costs
Depending on the size of your business or the quality of your current office premises, savings in energy costs could represent a significant opportunity for business profitability. As energy charges continue to increase beyond the cost of CPI increases, this opportunity (or risk) becomes even greater for your business.
By enhancing your brand and communicating your corporate vision and values
Both the building in which your business is located and the fit-out of your office space can go a long way towards powerfully communicating what you are all about to your clients or customers. The way your office looks and presents itself to the market can reflect who you are, what you do, what you stand for, how you approach the needs of your customers, the quality of your offering and how you treat your own staff. A change in office location and fit-out can completely turn around the fortunes of a business.
By making it easy and attractive for your clients to do business with you
This may seem like an obvious issue, but it’s often one overlooked by business owners and managers when contemplating new offices. It’s unarguable that your business will be better placed if your office meets the quality and value expectations of your clients or customers.
Darren Bilsborough is the CEO of Australia based consultancy Office Space Matters and author of “Don’t Worry About The Rent: Choosing new office space to boost business performance”.