Room for Improvement: Property Rental Costs Are a Substantial Outgoing for Most Companies, but They Can Be Reduced Considerably by Making More Efficient Use of Office Space. Jonathan Davies States the Business Case for Innovative Workplace Design. (Cover Feature Office Design)

By Davies, Jonathan | Financial Management (UK), February 2003 | Go to article overview

Room for Improvement: Property Rental Costs Are a Substantial Outgoing for Most Companies, but They Can Be Reduced Considerably by Making More Efficient Use of Office Space. Jonathan Davies States the Business Case for Innovative Workplace Design. (Cover Feature Office Design)


Davies, Jonathan, Financial Management (UK)


It's too easy to judge workplace design subjectively in terms of aesthetics and to forget the more tangible issues that affect costs and profitability. Flexible working practices are becoming more widespread, and today's brightest and best employees are demanding more from their employers than generous reward packages. A well-designed office can reduce a company's overall space needs, improve the efficiency of its facilities management, support flexible working, provide the enhanced environment and "buzz" that the most talented people want--and be of measurable financial value.

If you consider that payroll and property are the two most significant costs that a business will incur, those companies that understand the importance of a well-designed working environment can potentially gain a competitive advantage.

The Total Office Cost Survey 2002 (based on research by City University Business School, Cushman & Wakefield, Healey & Baker and Actium Consult) uses the measure of cost per workstation to assess occupancy costs across the UK. It defines a workstation as the area taken up by someone's desk, chair, pedestal and storage area, which comes to approximately 7 square metres. But, when considering a complete building and allowing for central storage space, meeting rooms, corridors and so on, the survey uses 14 square metres as the norm.

Office costs can be broken down into four main areas: rent and rates (typically comprising half of the total cost); the annualised costs of fit-outs and furniture; building management costs such as maintenance, security and cleaning; and business support costs such as reception, catering and couriers.

The table, right, shows average annual workstation costs in various locations around the UK. The marked variation between central London and other regions of the country is largely explained by the high cost of rent and facilities support staff in the capital. But in every region office costs are substantial and, by designing effectively to reduce the space required for each workstation and by changing work styles to increase the ratio of employees to workstations, office overheads can be reduced significantly.

In order to make the most efficient use of space in their design and to understand how much space an organisation really needs, interior designers use a variety of methods:

* Space-use study. This analysis of desk occupancy and the nature of tasks performed at workstations enables designers to calculate workable desk-sharing ratios and meeting room requirements.

* Storage/filing audit. Better management of paper and storage needs can significantly reduce the amount of filing space required. When one major UK accountancy firm conducted a storage audit recently, it found that the space taken up by superfluous paper filing was equivalent to that needed for five medium-sized meeting rooms.

* "Block and stack". This analysis of interactions between departments in an organisation enables designers to determine which ones should be positioned next to each other. Getting this right can make communications more efficient and promote teamwork.

* Questionnaires. These provide more subjective information about people's needs for designers to use alongside the hard data gathered during the space-use study.

* Interviews and workshops. These are used to gather further information about working practices. They help designers to gauge employees' opinions on any proposed changes and ensures that they feel involved in the process.

The figure of 7 square metres per workstation is a standard that is subject to wide variations between companies. The identifiable space allocated to individuals may vary from 4 square metres to 15 square metres or more. A key factor affecting this is the ratio of cellular space to open-plan space in a building: 7 square metres allows for 20 per cent of the space to be cellular, but this percentage can be significantly higher. …

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