How Do You Make Offices Cost Effective? Three Easy Strategies Any Business Can Implement!!


Offices are often costly to a business, but many times they are completely necessary. Learning how costs can be reduced is ideal for those businesses trying to cut back. In order to appropriately make an office cost-effective, you must understand how to do so without harming productivity or the quality of the work.

So, how do you make offices cost effective? There are a variety of ways in which costs can be reduced in an office space. From practicality to outsourcing or coworking to going green, there are always options. Determining the best options for your business all lies in how you want to operate.

How exactly do these options for cost-cutting work? By expanding on the options and finding additional ones, it will be made clear the difference that it might make for your own office. Because of the needs and functions in different businesses, it is important to look at all aspects of the cost-cutting options before implementing them in your space.

Be Practical

Practicality is the beginning and baseline for having a cost-effective office. To be practical means to be feasible or reasonable; it means that it will probably be successful. Consider what you need to run your business. While slides might be fun and give your employees a bit of entertainment throughout the day, they are not usually something to invest in if you’re looking to cut costs. Be realistic and think about the true needs of your company’s office space.

When searching for an office location, take into consideration the space that is truly necessary. By understanding how much space each employee will really need, you can determine the minimum square footage that is required. To best do that, find ways to fit more people in a smaller space comfortably. Tiny desks are not the answer, rather using the space you have in an efficient manner can fit up to 20% more staff into the same area.

By having more staff in a smaller area, you can accomplish more work for less rent. You don’t have to pay for the extra square footage when you find a way to fit everyone in. The question is: how do you accomplish comfortably housing enough workspaces for the needed employees?

See also: What’s the Purpose of an Office and When Should a Company get One?Opens in a new tab.

Start with a desk of an appropriate size. Many desks were designed to handle the large computers offices held 30 years ago. With laptops, flat screens, and the compact size of computers in general, desks are no longer needed to be the size they once were. Now, desks don’t have much reason for being any larger than 4 feet by 2 feet of surface area.

In addition to physical size, consider location changes or what is truly needed. Offices vary in price often based on the quality of the neighborhood and businesses around them. While it is more prestigious to operate in a high-end area, it can be very pricey for not much square footage.

If your company is one in which the employees require privacy, such as one that has a lot of phone calls or handles sensitive information, you can easily divide spaces using temporary walls. By using dividers with a fabric element, sound, in general, is absorbed better and not bounced around as much. This allows the space to be a bit quieter. You may also try virtual walls, which is simply a small walkway between desks. It does not necessarily stop the travel of noise but does provide a bit more privacy than desks that are side by side.

When desks are placed close together, it can be necessary for employees to have an area in which they have more room. The use of a breakout area can help employees feel like there is a space where they can spread out. Typically, these rooms can be scheduled or signed up for by individual employees. They don’t have to be huge but might be something like a conference room where multiple employees can work together.

Another way of thinking practically in regards to cutting down on office costs is to allow some employees to telecommute. If the position allows for employees to work remotelyOpens in a new tab., try it out. It will save a desk for someone that must be present and means less square footage in the end. It also saves the company on purchasing office supplies like notepads, pens, and paperclips.

Take a look at the company budget and see where the money is going. This is possibly the most obvious way to cut costs, as it is something that should already be done regularly. A company that doesn’t keep an eye on spending is a company that is probably spending too much. Look at how much of the budget is going towards the office and its needs or wants. If your budget is being met, try to see what you can do to decrease it. That spending might be spent better elsewhere.

If you are struggling to see exactly where the company funds are going, there are outside companies that are paid to do the research for you. This is called an audit. An audit like this can find money bleeds in a variety of areas, from office supplies and utilities to other, less common office expenses.

Providing employees with desks that are extravagant and fancy might look nice, but they can also be a drain on the company’s funds. Purchasing ritzy sofas and armchairs do little to advance the productivity for a company but are the opposite of a cost-effective office. There are ways to design an office on a budget. Being practical in regards to an office space means in every regard. Do not expect to have a cost-effective office if money is being spent in areas that are not useful or advancing the company’s objectives in any way.

Practicality can save thousands of dollars if it is applied with rational thought. Allow it to save you money by thinking over the options and what your company might do to cut down on costs. While these practical options are just the beginning, they will get you headed to a cost saving company.

Outsource Work

Outsourcing specific areas of the business can be easily done and save a lot of money. In fact, studies show that outsourcing can save a company upwards of 60% in operational costs alone. Hearing this inspires a number of business owners to find out how they can outsource a good chunk of work. It also begs the question: what’s the catch?

Like with anything, outsourcing has its goods and bads. Determining if the gods are worth the bads is often dependent on the company and what it wants to achieve. What exactly might you lose if you turn to outsourcing? Firstly, you might lose control over the specifics. If your office is a tightly-run ship that follows a specific set of guidelines, outsourcing may not be the best option for your company.

Outsourcing generally means that you are hiring another company to handle an aspect of your business. For example, if you don’t have the office space or desire to have a call center on site, you can hire a third party to answer phone calls for you. This means that you have no control over the employees that represent your company and are entirely reliant on the outsourced company.

Because of this, quality might suffer. Perhaps you prefer your calls to run smoothly and for the people representing your company to provide stellar customer service. However, because of differences in culture or expectations, obtaining that type of quality is not always possible with an outsourced call center.

There may also be communication issues; whether it’s because of the cultural differences or technology complications, the result is the same. Sometimes communication issues occur simply because of time differences. Businesses require regular communication to function properly. Without that communication, misunderstandings may be frequent and can be escalated to something that would have otherwise been avoided.

Misunderstandings are also common within company culture if the change to outsourcing affects current employees. Employees can feel replaced, invaluable, or any number of things when an aspect of their position is given to an outsider. Ensuring that employees are understanding of the change is key to avoiding issues within the company.

While the negatives may be enough to sway you from considering outsourcing as a way to cut costs in your office, consider the positives as well, perhaps the most significant impact is the decrease in labor costs. If your company had hired a team of people that had too much on their plate, their pay should have reflected the cost of their mounting duties. By hiring a company that specializes in a certain task, not only will your regular employees feel the weight of an extra job lifted from them, but new employees will not have to be paid so much. Outsourcing will be a big cost cutter.

Additionally, your company will not have to be responsible for finding qualified personnel. The outsourced company handles all of the hiring and the hassle. This means you are saved time and money because benefits are not your responsibility and finding the perfect employees are left to someone else. Since benefits account for approximately 33% of compensation costs, this is a huge amount to save.

It is also important to note that outsourcing means that there is a larger pool of prospective employees. You are not limited to hiring the best in your general area but can obtain highly qualified employees worldwide by allowing an outside company in another location to manage their own HR department. Since these outsourced companies are generally contracted out, they are often dedicated to providing the service that you as a company desire. Keeping the contract going is how outsourcing businesses are successful.

Outsourcing is a way to make an office more cost-effective, but the question remains: is it really worth it? Only you can determine if the risk is worth the reward. Outsourcing is often found to be incredibly successful, but it can also cause problems for a company. Each industry and company may find their own reasons to outsource or to avoid outsourcing. Determining the best course of action remains with the leaders of the company.

Coworking

CoworkingOpens in a new tab. is becoming a craze with the younger working generation. If you are unfamiliar with the term, coworking is a relatively newly coined word that describes space sharing in business. This simply means that multiple companies share an open office. It is often used by freelancers and startups looking for a cheaper option for office space. To some, coworking sounds hectic and chaotic. However, it does have its benefits.

Perhaps the biggest benefit of coworking is the savings that stem from it. Office space is often expensive, even in lower income areas. The cheaper space may have plumbing issues or be in a dangerous area. However, coworking offers a high-quality space in a prime location at a similar price because it is shared amongst some companies. Not only does the company save money on the rent, but also on maintenance and repair that would be necessary for an older building.

While having a cost-effective office is the main goal, it is important to know what to expect from a coworking space. For example, can a company expect to be distracted by other startups in the shared office space? Or will productivity soar? Knowing the findings regarding this concept may tell you whether your company might succeed in a space such as this.

Check out Coworking location on OSW CoworkingOpens in a new tab.

Many coworking buildings have set office hours. While this might work for some businesses, there are plenty that has to work beyond the 9-5 business day. Imagine being on the edge of a breakthrough and 5 o’clock comes. You have to leave because the building is closing down for the evening. Why? Perhaps the most logical answer is because other startups are keeping valuable information in that space and do not want someone stumbling across it. Whatever the reason, a coworking office means you have to work during the buildings set hours.

Having set hours also means a higher level of security for your office and the other companies located in the same space. Since the building closes at certain times of the day, most spaces will have electronic security keys or other ways to enforce the time constraints. This may be with a physical security guard or monitored cameras. Either way, it means your office is unlikely to experience theft while you are not working.

Coworking also means that you might have to share a space with a competitor. This could be a pro or a con, depending on how you look at it. Having competition just a few feet away might inspire your level of motivation to go through the roof or call for collaboration. It might also mean that there are some awkwardness and tension. Or, privacy could be a huge issue.

Privacy is a big concern for coworking areas, but if competition is also in the room, it can be hard to come up with new ideas without unknowingly sharing those ideas with the competition. While many coworking areas have spaces where you can go for privacy, if the majority of what you do is considered private or sensitive, coworking might not be for you.

Another thing that might turn you off from coworking is the inability to expand. With a shared space, finding more square footage for your office may be a challenge. Expansion in the company may not be possible in the current coworking office, causing you to move locations possibly sooner than you ever planned. If expansion is something that is expected sooner rather than later, be sure your coworking contract provides flexibility and the coworking provider can relocate you free of charge.

With the numerous disadvantages to coworking, it seems like there would be nothing worth the savings. However, there are some good aspects of the concept. In addition to the previously discussed motivation that can be found in working near your competition, you may also find that coworking saves money by providing the necessities for you. Many coworking spaces already have copiers and fax machines, wifi, and furniture. They also may have a break room that you would have had to create had you rented out your own office building.

In a coworking office space, you may meet people in the breakroom or other areas of the office that have skills different than your own. Many coworking spaces have networking events so that the people sharing the space can get to know one another. This can help to advance your own company with additional ideas or clients. You may find that your desk neighbor runs a startup that meshes well with your own thoughts and ideas and can work together on a project. With the variety of businesses and special skills, coworking might provide your company with something it didn’t have before.

If coworking seems like a gamble, it is important to know that many spaces offer temporary leases or simple day passes. Try it out and see how it works for you and your company. If it is something that doesn’t fit with your established culture or the culture you are trying to build, then coworking doesn’t have to be the route you take. Cutting back on costs does not mean you have to choose every option to do so.

Having said that, it is important to see the success that coworking has had on other companies. It is such a popular venture, however, that the available spaces have been growing exponentially in order to accommodate the need. From 2012 to 2013, there was a growth of 83%Opens in a new tab. in coworking seats. The concept is continuing to grow and attract a variety of people and companies, especially as millennials are the largest portion of the workforce today.

Go Green

Going green has been a movement for years. Were you aware of the ability to save mass amounts of money by going paperless, using reusable products, and lowering utility bills? Think of the possibilities. The following paragraphs will give you a few ideas on using the green movement to cut costs.

As mentioned above, going paperless is a trend that saves an office money consistently. Think of the notes you might take on a day to day basis. If those notes can be written on a tablet, cell phone, or computer, there is no need for the paper. Because of this, notepads can become a thing of the past. We are living in a technological age. Utilizing that technology allows for us to discontinue the use of paper. Why print data and charts when you can simply view it on screen?

We know it’s possible for most companies to go paperless. What is the incentive? Is it incentive enough to tell you that, on average, a company spends $80 per employee every yearOpens in a new tab. on paper? Consider a small company of ten people. For a small company, $800 annually is a big number. Let’s think bigger. Fifty employees use $4,000 of paper each year. One hundred employees use $8,000. These numbers are startling. By simply discontinuing the use of paper, your company can have a much more cost-effective office.

Another way to go green in an office environment is by using reusable productsOpens in a new tab.. Offering coffee is a wonderful perk to an office, but is it necessary to have disposable drinking cups? Also, rather than individual k-cups, purchase coffee by the bag or can in order to both cut down on waste and cost. You might also think about swapping out paper towels for real ones and providing cloth napkins in the kitchen area. It may seem that these changes are small, but they do add up over time.

An additional change that you might be interested in making is focusing on lowering utility bills. Many offices have a huge number of lightbulbs going for the majority of the day. By switching those bulbs to more energy efficient, LED lights, the electric bill will be reduced. It is also important to turn the lights off when a room is not in use and overnight when no one is working.

Turning off computers, printers, fax machines, and other electronics at the end of the day is helpful, but completely removing them from the power grid makes a difference as well. Unplugging these items will do that, but it is a time-consuming job to unplug everything at the end of the day and plug it all back in upon returning to the office. There are programs that can be connected to the electricity of the building that will stop any electronic flow from these machines. Investing in such a program is another option if becoming more cost-effective is the goal.

You can also impact utility bills by keeping the thermostat on 68 degrees in the winter and encouraging employees to wear a sweater. During warmer months, attempt to open the windows for a breeze as much as possible. The use of air conditioning is often a huge hit to the cost of utilities.

These simple changes do not seem like they would be major cost cutters for office space. Let’s do some simple math. An LED bulb is estimated to cost $2.81Opens in a new tab. – a number that includes the purchase of the bulb and having it on for three hours a day for one year. An incandescent bulb is estimated to be $8.89 during the same time frame.

Consider the fact that an average workday is 8 hours. This puts the cost of an LED bulb at $7.49 for a year and an incandescent bulb at $23.70. Since this is the cost of a single bulb, calculate the savings for the several bulbs in your office. Over a few years, the cost savings can be material.

You may even go so far as to consider other options for electricity. Solar power is becoming more and more popular. While it doesn’t have to power the entire office, solar power can significantly decrease the cost of utilities, or it can completely wipe out the need for a utility company. Other forms of power can come from wind turbines or water power. Consider your company and think about the long term and what the best option might be.

Going green is a way to make your office more cost-effective. A major positive is also that it helps the environment. Killing two birds with one stone is just a bonus. It is a popular option that seems to be moving companies into the future.

Wrap Up

There’s a variety of ways in which offices can be made more cost effective. By looking into where funds are going, it can be made clear where cuts should be made. Many of the options for becoming more cost-effective are standard, such as being practical, going green with paperless options and reusable products, and even outsourcing. The option that, until more recently, has been rare, is coworking.

Whichever option you decide to use to make your office more cost-effective, compare the differences in what you were spending and what you are spending after changes are made. The cost efficiency may just inspire you to make additional cost-cutting changes.

Related Questions

How might a company reduce the cost of compensation? Since a third of compensation is benefits, evaluating your employees’ use of the benefits will help you to see what areas should be cut back on and which might be more necessary. In many cases, you will find that some benefits are not required and are wasting funds.

How do you decide on a company to outsource with? While online reviews are a go-to for finding help, it may be necessary to go a step further with outsourcing. You are putting the reputation of your company in the hands of another when you outsource, so it is essential to talk to people you know and get their opinions, in addition to having lengthy discussions about what is expected of an outsourced company.

Steve Todd

Steve Todd, founder of Open Sourced Workplace and is a recognized thought leader in workplace strategy and the future of work. With a passion for work from anywhere, Steve has successfully implemented transformative strategies that enhance productivity and employee satisfaction. Through Open Sourced Workplace, he fosters collaboration among HR, facilities management, technology, and real estate professionals, providing valuable insights and resources. As a speaker and contributor to various publications, Steve remains dedicated to staying at the forefront of workplace innovation, helping organizations thrive in today's dynamic work environment.

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