As the New Year begins, now is a great time to reduce your second highest operating expense. It’s important to evaluate the best way to save money on office space. The following three questions should help you assess your current situation:
First, is your space the right size? Review your current lease. Next, divide the number of employees you currently have at that location into the amount of total rentable square feet.
By 2017, North American offices will average 151 square feet per worker, according to real estate data provider CoreNet Global. That’s down from 176 square feet in 2012 and 225 square feet in 2010. Where does your space fall on the continuum?
In addition, ask yourself a few more questions. Does your space flow well from one department to the next? Do you have built in space for growth? Does your space design match your culture?
Second, does your location help recruit and retain employees? The race for talent is real. And, in some markets and industries, it has already become a critical component to growth and sustainability.
Many tech companies offer company amenities such as game spaces for ping pong and Xbox, in addition to living room lounge areas. They may even cater lunch every day for their employees.
Many employees desire a location with walkability. In other words, they want the ability to live work and play all in the same area. Is your office easily accessible? Does it have a lot of amenities nearby?
According to the Center for American Progress, the cost of replacing an employee ranges from 10-30% of their annual salary. Obviously, this depends on the industry and length of time on the job. In any case, employee retention strategy must be a top priority.
Third, how does your price per square foot align with the changing market? Do you know how current market trends have affected your building? Market trends may also impact your Landlord or your submarket.
Many times, companies believe they have a good deal and an aggressive rate. How do they really know? Unless that company executive doubles as a tenant representative in that area, he does not have the data to know what rate he should be paying. It is also likely that they won’t know what concessions are available and where leverage could be created.
Depending on how you answered each question above, money can be saved. Whether you are in the middle of a lease or the expiration date is approaching in the next couple of years, now is great time to have a no-strings-attached consultation with our team. We promise only unbiased solutions for your specific company.