Understanding The True Cost Of Corporate Office Space

How do I assess my true office accommodation costs?

We have been asked by a number of clients to help them identify the true cost of an office or location. Here is a guide to the factors you should consider to assess total accommodation costs.

The UK Department of Trade and Industry commissioned a report into remote working in 2005 and found that a significant operational cost reduction was achieved.

In a recent report the following figures were published from a study of 13 large corporations, spanning some 30 teams (1.0)

• 86% of managers and 74% of staff spend time out of the office during any month.

• An average office worker spends 10-20% of time away from their desk.

Taking the above we can calculate, in rough terms, the expected usage of accommodation to staff ratio. (This is only a guide and further study of any organisation will be required.)

Total cost of location – In order to calculate the exact costs of providing a desk, a number of factors need to be considered. A recent report from The City University Business School calculated the average desk cost as follows;

• Central London - 20K per desk per year

• Other major UK cities - 13k to 8k per desk per year

The above is inclusive of all service costs to the desk and space such as corridors or larger personal enclosed office space. We can use these figure to show wastage costs per office or team.

Example:

100 staff with 10 managers

100 staff of which 74 are out of the office 10% of the time = 7.4 empty desks

10 managers of which 8 are out of the office 10% of the time = 0.8 of an empty desk.

Total yearly cost = 8.2 desks at 8k per year 65.6k

(This does not include sickness or holidays)

(Remember that unless you maximise the space left, savings will not be made in direct accommodation costs.)

Conclusion - It is recommended that a short study is commissioned to look at potential within the organisation and identify an appropriate project that will bring cost savings and increased productivity.