WHITEPAPER How to Reduce the Cost of Your Office Space and Still Recruit and Retain Top Talent

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1 WHITEPAPER How to Reduce the Cost of Your Office Space and Still Recruit and Retain Top Talent

2 One of the biggest challenges facing companies today is the problem of finding ways to attract the best talent in the market. How can we create an environment where employees want to work - and do it without breaking the bank?

3 BATTLE FOR TALENT We are at war. The battle to recruit and retain the best employees is never-ending. Business leaders know that the success of their company is dependent on the quality of their employees. Talented, engaged employees spark innovation and generate ideas that set companies apart from their competitors. So how do you make sure that your company is able to build and maintain a strong workforce? Employers are pulling out all the stops in order to attract the best talent. In today s market, it is not enough just to offer competitive pay and benefits. Employees want to work for a company with a great culture that supports their growth and promotes creativity. Office space can play an important role in attracting and retaining the best workers. An inviting office space located in the area where employees live and play can be a big draw for a company. Creating a great employee experience through effective space utilization is an important part of generating employee engagement and productivity. In commercial real estate, we are seeing a shift in how office space is viewed and utilized as part of the business environment. Office space is trending towards more openconcept floor plans with more shared spaces to support collaboration. We are witnessing a decline in the square footage allotted per employee, as companies are becoming more efficient about space usage and redesigning their offices to be used as recruitment tools. Unfortunately, we can t all be Google and Facebook - nor should we be. Most companies don t have an unlimited budget to build an extravagant office on that scale. So the question becomes, how do we create an office environment that makes people want to work for your company and still keep real estate expenses in check?

4 COST IN MIND As we look to create an office environment that is attractive to employees, it s important to keep the cost of your space in mind. Office space is already a major expense for businesses, and finding ways to reduce the cost of office space is something that all companies are interested in. When you boil it down to the basics, the total cost of office space is dependent upon these variables: Total Cost of Occupancy = # of Employees x SF/Employee x Rent/SF In simple terms, the way to reduce the cost of office space is to optimize the last two variables. The challenge is figuring out how to do that while creating an environment where people want to work. We have put together a few tips and things to keep in mind as you look for ways to cut costs while creating a desirable work environment. REDUCE EXPENSES & ATTRACT TALENT Here are a few things to consider that can help keep office costs in check as you look to build a workplace that attracts talent: Cheaper Space Perhaps the most obvious way to reduce the cost of office space is to lease cheaper space. Leasing class B or C office space outside of the central business district or other hot markets can certainly reduce real estate costs over leasing class A space in a downtown area. Many of today s workers aren t nearly as hung up on the glitz and glamour of that pricey class A space, making it possible to find a location that is cheaper and a better fit for your culture. However, make sure that leasing cheaper space will not come at the expense of employee engagement and turnover. Redefine Office Space Just because it is called an office doesn t mean that only traditional office space will work. Renovated warehouse space can create a unique office feel without paying premium rates for that space on the 30th floor of a skyscraper. This can also allow companies to get out of the CBD and into the edge of the urban core that is still easily accessible and desirable to employees.

5 Efficient Space Design Instead of defaulting to acquiring more space in order to support the growth of your company, there could be ways to use the space you already have more efficiently. A professional designer can look at your office space and uncover ways to create a more efficient floor plan, preventing the need for you to lease an extra floor. They can create a design that helps you minimize your square footage per employee without negatively impacting productivity or employee morale. Shift Space Use Senior executives are typically given the largest office space, however, they frequently are the people who spend the least amount of time in the office. Allocating more space to support employees who actually spend the majority of time in the office can enable companies to create an engaging environment that supports their productivity. Also, many companies have had success reducing their space usage by supporting a more remote workforce and allowing more employees to telecommute. Start Lease Planning Early Your lease may not be up for years, but it is never too early to start planning. Looking ahead can make you well-positioned to turn your workplace into an asset that attracts the best talent. Tour the offices of other companies with strong cultures and find out what your options are. Thinking about the workplace well before a lease expires gives companies the ability to create an environment where people want to come to work. Another option to consider is an early renewal to take advantage of favorable market conditions and facilitate physical changes to your office space. Think CPE, not CPSF Forward-thinking corporate decision-makers are looking at their real estate costs in terms of cost per employee, rather than cost per square foot, which has been the standard historically. This allows them to consider newer or renovated space, which may have higher rental rates but facilitates more efficient space utilization. Their ability to fit more employees into these spaces decreases their overall costs per worker. Understand Your Workforce By understanding your workforce, you can focus on creating an environment that attracts the right people. If you have a younger workforce in a technology or creative discipline, an open office environment with more shared space could be right for you. This type of office not only attracts younger talent, but it can actually reduce the amount of office space needed, keeping your real estate costs in check. Conducting an employee survey is a good way to better understand what type of office environment your workforce prefers.

6 Your Office is an Asset, Not a Liability Ultimately, the goal is not to simply minimize real estate cost, but rather to make sure the business operates as profitably as possible. It is estimated that disengaged workers cost the US economy $450-$550 billion in productivity annually, and employee turnover costs anywhere between one and three times an employee s salary (Source: Good.Co). Occupancy costs pale in comparison to these expenses. Your workplace plays a huge role in defining the culture of your organization, and can be a major asset in attracting and retaining talent. By investing in the workplace, companies can create an environment that reduces turnover costs and cultivates an engaged, more productive workforce. Interested in learning more about how you can reduce the cost of your office space, recruit and retain top talent, and build a work environment that creates an engaged workforce? Talk to a Welsh & Colliers International professional today.

7 ABOUT WELSH & COLLIERS INTERNATIONAL As the business world continues to change quickly, you need a commercial real estate partner who can keep up the pace. A business advisor with the knowledge and ability to look at how real estate impacts each aspect of your business strategy. That s where we come in. Integrated Services with Answers to Your Business Questions Brokerage: Is is it better to move to a new location, or stay in my current space? Construction: What kind of improvements can I make to my office space? Property Management: Are my property managers dependable and responsive? Capital: Would owning my space be more beneficial than leasing it? Architecture: Does the design of my space help me attract top talent? Facility Services: Is my space properly maintained creating a workplace free of distractions? As your commercial real estate partner, whether you use one, a few, or all of our services, you have access to all of our in-house specialists. We bring different perspectives to the table. We get creative. We work through challenges. And at the end of the day, we get you results.

8 Learn more about Welsh and Colliers International news and current events: Subscribe to our blog on welshco.com Follow us @colliersmsp Connect with us on LinkedIn: Welsh & Colliers MSP Local Expertise. Global Reach. In partnership with Colliers International for brokerage and real estate management services, Welsh offers a fully integrated suite of real estate services to best address the ever-evolving needs of each unique client. BROKERAGE REAL ESTATE MANAGEMENT CONSTRUCTION PROJECT MANAGEMENT ARCHITECTURE FACILITY SERVICES CAPITAL AA/EEO Employer