Employees Working at Home? Time to Rethink Your Space.
In a pre-Covid-19 world, working from home was considered a luxury. It is now considered a necessity to keep so many hardworking businesses open and workers employed.
If enough of your employees will and are working from home successfully, it might be time to think about whether this could be something you would consider for the long-term. Employees working from home can mean giving up some pricey real estate space, allowing you to lower rent and utility expenses. Let us take a look at some factors to consider.
Wondering how other businesses are managing these new remote working arrangements? A recent survey by Mercer reveals some interesting findings:
- 93% had provided “more flexible work options to align to the new way of working” during the pandemic. Of those, only 9% had at least 25% of their employees working remotely
- 58% said that once regulations are lifted, they expect at least 25% of their employees to work remotely
- When asked to predict future post-pandemic work-from-home policies, 52% expect they’ll change to “allow for more flexibility to work both on-site and remotely.”
There are a variety of factors to consider:
Estimate how big the opportunity will be for your business. Impact varies from business to business, but consider what you could do if you reduced your rent by 25%. This could save a good chunk of your monthly expenses. You will need to analyze whether the savings in your business would make cutting your space worthwhile or if by reducing your space needs you may be able to afford a more desirable location for the same cost.
What will your new arrangements, in a smaller space, look like? You may still want your remote workers to be in the office some of the time to help stay connected in ways that cannot be accomplished virtually. A time-tested model to solve this issue has been to maintain several flexible workspaces that workers who just pop in can use on an as needed basis.
Take a look at your current space. Think about the wasted space you currently have. Try zero-basing your workspace needs by determining what you require without reference to your current workspace. Looking at your needs from a fresh perspective can be eye opening.
Additionally, you’ll need to consider expenses of having employees who plan to work from home on a long-term basis. You may be footing the bill for a proper desk, chair, and other essential furnishings that you supply for workers in your current space. You also may need to purchase printers and office supplies in addition to providing a cell phone and internet reimbursements, to compensate home workers that purchase items used for business purposes. You will also want to consider increasing IT safety measures to prevent cyberattacks on less-secure home networks.
What are your current lease obligations? You will need to carefully review all your contracts to assess how soon you can make a change. It never hurts to negotiate but understand that even if you’re using only a fraction of your renter space, you might be stuck until your lease is up.
Be creative! Maybe you could give up some of the space you’re currently renting and sublease the extra space to another tenant. Or, if it’s allowed under your lease contract, you could find a tenant to sublease all the space you are currently renting and relocate to somewhere that better meets your needs. Beware – this will make you a landlord, with all the monetary risks and potential headaches that may arise.
You could also negotiate a buyout of your lease, but you’ll want to analyze the numbers to ensure you’re actually coming out ahead. The current commercial real estate market along with where your rent falls in the market will determine how much your landlord is willing to work with you.
Considering and making a move for a business is no small feat. The cost of moving and setting up shop at a new location could be greater than what you would save in rent, depending on how long you plan to occupy the new, less expensive quarters. It’s important to think long term with whatever you decide.