When and how people use office space has fundamentally changed over the last few years which has left many businesses adopting and, in some cases, experimenting with a different office strategy. Whether the change is downsizing in conventional leased space, moving to a more flexible serviced solution, using space on-demand or a mixture, how much office space a business needs has become the head scratching question of the moment and one that rightly deserves due care and attention.

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How much office space do you need?

The old rough rule of thumb when calculating how much space a business needs was 100 sq. ft. per person for acquiring office space on a long lease.   So, a company with 100staff would need about 10,000 sq. ft. and this would be enough to account for reception area, meeting rooms, breakout space, kitchen, and large open plan space for desks.  There were of course exceptions to this rule for example call centres that would allow less space per person and law firms that might allow more space per person, but it was a good and simple guide.  But don’t forget, this assumed people would be in the office 5 days a week and have an allocated desk.

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Now, most businesses have adopted hybrid working and are faced with a mixture of some people working on a fully remote basis, but the majority spending some time in the office with 2-3 days per week being a typical frequency. So, how should a business optimise space and costs whilst allowing for either growth or contraction in staffing levels?  And how does this differ between leased and serviced space?

In answering these questions, the business will need to consider several factors:

1.      Do staff need to be in the office at all? Commonly cited advantages for office use relate to collaboration, learning, development, and social aspects. Whatever the reason, office space in many cases, does not support the reason people want to be in the office, which can significantly impact behaviour and attitudes towards office use. When moving or repurposing existing space, consideration should begiven to the function that space will perform.

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2.      How should you optimise office design and settings to best support employees? Consider collaboration space, the variety and choice of meeting spaces, quiet working areas, the need for technology enabled rooms or booths for video calls with colleagues in other locations as well as clients and space to unwind and have fun. Also consider how people operate differently in the business and the types of space needed to support each role.

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3.      Do staff require allocated desks? Some businesses still operate on a dedicated desk basis with every employee allocated a desk, but this is no longer the norm, and most businesses now have a large proportion of unallocated seating. How aggressive a business should be with the desks to employee ratio is a difficult decision to make. If there are too few desks to satisfy the demand frustrations can arise when staff arrive but have no-where to work with a knock-on impact on behaviour and desire to go to the office.

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We see fast growth businesses taking additional space on leases with desk to staff ratios closer to a 1:1 basis on day 1 but with a plan to gradually reduce desk to staff ratios as staff numbers increase and the space needs to work harder. Policy on office use inevitably comes into play here and this certainly helps when planning and looking at space utilisation. A 2 or 3 day a week office use policy is now typical and it’s interesting to see how a 1-day change in policy can reduce or increase the number of unallocated desks required in an office.  It still must be remembered though that peak times will occur (most staff will be in the office mid-week and fewer on Mondays and Fridays) and this needs to be a consideration in the planning with other office settings taking the strain.

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4.      Can the office influence culture and brand? Some businesses are fully remote and maintain very positive cultures, but they don’t achieve this without people coming together in a physical environment from time to time.  Office space represents an opportunity to bring people together and build a positive and healthy culture, whilst promoting the brand and identity, not just for staff, but for clients and their experience of the space. The space needs to reflect the culture and brand identity of the business.

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5.      How do you manage growth and ensure that the office helps to attract and retain talent? Attracting and retaining talent is the number one priority for most businesses and there is no doubt that the office can play an important role. The short, medium, and long-term growth plan of a business might dictate whether it is best to retain flexibility on lease length or make a long-term commitment. It may be wise to limit growth in a particular location and instead open in a new city, perhaps with a lower cost base but where there is an abundance of talent. Looking at all options and assessing the positives, negatives and risks is the best way to reach a conclusion.

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6.      Are serviced offices or leased offices better for the business? The answer is not always clear cut. The utilisation of communal spaces in serviced offices may require a change in behaviour to derive most benefit. The best serviced offices offer ready-made, hospitality led, amenity rich offices that are great for flexibility but there are several things to consider making sure businesses choose the right option and get the most from the space available.

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a. Size per desk: conventional leased offices are always acquired based on the floor area but serviced office operators usually quote private office space in terms of desk numbers, rather than floor area which isn’t particularly helpful when comparing different options because each will allocate a different amount of space per desk. The range is wide from c. 25 sq. ft. up to c.50 sq. ft. per desk. Converting to a rate per square foot to allow a true cost comparison between different options can be a better way to assess options.

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b. Access passes: policies on access passes vary between operators and it is a particularly hot topic with serviced offices. Consider that many companies are downsizing and right sizing when taking serviced offices. This means that they are not building in a lot of spare capacity for growth (because with the right operator and building, you can take more space when you need it) and typically have many more staff to the number of desks they are acquiring.  Operators offer a pass for every desk but beyond that there can be restrictions on how many additional passes are available often with a cost implication per additional pass.

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c. Communal space: with serviced offices a business agrees to rent a private office space with the added benefit of access to communal spaces that might include kitchen, break out, bookable meeting rooms, calling booths, gym, showers, lockers, outdoor terrace, bar, barista, event space, reception, post room, yoga studio, etc. (unlike traditional leased space where tenants control everything). Full use of these communal areas is key to obtaining good value if a business is pushing the boundaries of space utilisation.  If these facilities are limited, you may need more private space to compensate so building choice is important.

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d. Right size vs future proof: should a business take enough space to allow for growth on a long lease or take only the space it needs in the short term, for the next say 6-12 months and ‘right size’ in a serviced office if there is an option to take additional space when needed? This is a judgement call and if right sizing is preferred, discussions with the serviced office operator to establish a clear understanding of how this would work in practice is important.

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Whatever the answer to these questions, and whatever conclusion is made on office space, it is important to continually monitor these factors and evolve the workplace strategy to make sure office space is supporting the business both now and in the future.