Choosing an Office Space

How to Compare Workspace Costs – 3 Most Common Errors

Did you know that the majority of companies use the wrong criteria when comparing workspace costs? The three most common mistakes are incorrect indicators, unnecessary overall costs and the exclusion of hidden costs from the sum total.

You Get What You Compare

Choosing an office space can be approached from two different perspectives: as an expense or an investment. Traditionally companies tend to stare mainly at the costs. When a company’s cost structure is contrasted with a vague promise of a ‘better working environment’, it is not difficult to guess to which side the scale tips – guaranteed savings or potential benefits.

Although the majority of today’s lessees are able to see the big picture (benefits generated by a functional work environment), the use of incorrect indicators leads to a situation where a large proportion of potential office solutions go unnoticed. Scanning the available options with smarter parameters could lead to positive surprises.

The three most common mistakes in workspace costs comparisons are incorrect indicators, unnecessary overall costs and the exclusion of hidden costs from the sum total.

1. Assess Spaces by Their Efficiency, Not Price per Square Meter

Compare different options in terms of their space efficiency rather than m² prices. Staring at the m² price conceals the inefficient use of space. As a result, a company may end up leasing a space that seems cheap but which, in fact, is inefficient, uncomfortable and situated in a remote location, even though you could get a smaller, yet more comfortable and efficient, office with a central location for the same price.

2. Calculate Total Costs per Employee And Do Not Forget Services

Before initiating the workspace process, determine all expenses related to the facilities and work environment-related services, and calculate their total cost per employee. A transparent comparison of the different options cannot be made by staring only at the lease – it needs to cover all expenses for both the space and the services.

3. Cut Hidden Costs with Workspace Design And Centralized Services

Do not exclude invisible work from cost calculations, even if it is difficult to identify. The management of complex contract portfolios and service packages generates hidden costs, as does a noisy and poorly designed office, which does not promote efficient work practices or employee well-being.

Read more: How to control workspace expenses – CFO’s short guide to smarter office space selection