Real estate is the second highest cost for businesses, after salaries, yet it is estimated that big businesses in the UK waste £10 billion a year on under-used office space. As most commercial leases last between five and ten years, real estate is also one of the hardest investments to manage. But how do you know if you’re paying extra for unused office space and what can you do about it? One solution is to undergo a space utilisation study.
A space utilisation study explores how and when people use different spaces in an office. During the study, a team of auditors observe your workspace, reviewing when desks, meeting rooms and breakout spaces are used. This information will provide businesses with valuable insights on how to optimise space inefficiencies and create an environment that works for employees and the organisation.
“Businesses in the UK waste £10 billion a year on under-used office space”
What to do if you are paying extra for unused office space
If you conduct a space utilisation study and find there are areas of unused office space, there are several things you can do. You could consider relocating to a smaller office, refurbish your current office space, or rent-out your unused spaces to free-lancers and start-ups.
Having surplus office space can be a luxury position to be in as it gives you options. Options to do different things in the space and provides a level of flexibility that some businesses simply cannot afford. The opportunity however should be maximised so that you do not end up wasting the extra office space. Whichever choice you make, must be right for your business and if you conduct a space utilisation study, your best options will be revealed in the results. Here are some examples of the best options available to businesses.
Option 1: Relocate to a smaller office
If you have a lot of unused office space, it might be worth relocating to a smaller office. Afterall, having too much office space can negatively impact your profitability and adversely affect your company culture.
Before making this decision, consider whether your current space could be optimised to suit your organisation’s needs. With the rise of new working patterns, agile spaces and break-out areas are optimal for encouraging staff collaboration and productivity. You should also consider your future headcount growth and workout whether you are likely to grow into the space.
If, after these considerations, relocating to a smaller office is the best option for your business, then you should consider a workplace consultant to support your relocation. For more information, read the article: Ten Steps to the Perfect Office Relocation.
Option 2: Refurbish and optimise your current office
A space utilisation study will provide you with an insight into what spaces are both underutilised and over-utilised. If there are spaces in your office that are not being effectively used, it might be worth analysing why. Do they provide employees with the tools they need to conduct a specific task? Is the space uninspiring? Are there maintenance issues with the space, i.e., ineffective heating or air conditioning.
It’s also worth comparing underutilised spaces with over-utilised spaces. Is the team in need of more meeting spaces, collaborative spaces or high-concentration spaces? If this is the case, it might be worth refurbishing your current office to create more in-demand workspaces. Explore the Pros and Cons of an Office Refurbishment to help you decide if this is the right option for you.
Option 3: Rent out your unused spaces to free-lancers and start-ups
Co-working spaces provide a professional environment for free-lancers, start-ups and small businesses to work-in without the long-term commitment of more traditional leases. But it’s not only co-working spaces that can offer this flexibility. Businesses with unused office space can offer their extra space to those looking for flexible lease options. A space utilisation study can be used to define your unused commercial space which you can rent out as a coworking space, provided your lease doesn’t prohibit sub-letting the premises.
Why it is important to conduct a space utilisation study now more than ever
The rise of new working patterns, such as Hybrid working, has created a demand for space consolidation. Businesses now need to decide how they wish they’re employees to use the office and adopt their real estate accordingly, to accommodate remote, mobile and on-site employees.
As we enter a period of mass resignation, it is essential for business to optimise their offices for staff retention and attracting new talent. By involving your staff in any studies and decision-making processes you ensure employee productivity, staff satisfaction and engagement.
A space utilisation study can also support your companies’ green initiatives. By understanding how staff interact with the space, where they commonly congregate and how they spend time in these zones, you can conserve energy by controlling heating and lighting in vacant areas or removing them from your property altogether.
If you are looking to update your office space speak to one of our workplace experts.