The Bank of England has announced that the UK is facing its longest recession on record, leaving many businesses with no choice but to drastically reduce their outgoings.
As an employer, the last thing you want to do is to make teams redundant, but you need to stay afloat. So, what do you do? Luckily, the shift to hybrid working has created new ways for businesses to save money without having to sacrifice talented employees.
One way to do this is to decrease your office footprint. There are plenty of ways to do this, and what works for one business may not work for another. The strategy you decide on will need to reflect your workplace strategy, employee preferences and your business goals.
But whether you opt for a smaller HQ or give your team access to on-demand workspace, downsizing your office space is an effective way to control your business’ scalability, while significantly saving on office rent. Here’s how:
Why cut office space, and not employees?
First things first, let’s briefly unpack why so many CFOs are saying it’s a smart idea to cut office space, and not employees.
For starters, the hybrid workplace revolution has completely changed our relationship with ‘the office’. We all know it’s no longer a single fixed office space where every employee comes to work. Instead, it’s a network of environments tailored to each individual, team and business—and it’s this flexibility that’s helped companies thrive even in times of uncertainty.
And while it is cost-effective, making employees redundant can actually do more harm than good—especially in a cost-of-living crisis. Redundancy runs the risk of negatively impacting employees’ trust in the business, leading to a drop in productivity levels, low morale and ultimately, reduced profitability.
But let’s take a closer look at the financial risks when it comes to businesses and their physical workspace solutions:
The under-utilisation of office space
For office-first companies (companies who’ve identified that most work will occur in the office), a huge cost inefficiency is paying for an office space where desks go unused. We call this “empty desk syndrome”, and it happens when businesses commit to a set amount of office space for a set amount of time regardless of their headcount and usage requirements.
Not only does this leave C-level executives with a poor office ROI, but it also means you’re locked into an uneconomical contract that doesn’t serve your scalability. For example, most traditional, long-term contracts range from 5-10 years—and also require hefty exit fees.
Forking out on expensive in-person solutions
For remote-first companies, financial risks can occur when the workforce individually manages and expends their own in-person remote working solutions. For example, let’s say a few of your employees are meeting with external clients in person—and they need to find a well-connected, professional meeting room at short notice.
These types of ‘emergency’ solutions for last-minute workspace requirements tend to be incredibly pricey, leaving many businesses with no choice but to set up expensive regional hubs so distributed teams can access workspace when working from home isn’t suitable.
This lack of control and visibility over office spend is what can ultimately burn a bigger hole in remote-first companies’ pockets.
So, what are some cost-cutting strategies office-first and remote-first companies could implement?
Avoid traditional leases by opting for a serviced office space
If you’re looking to decrease your office footprint, but you’d still like a full-time HQ for your employees to access, then opting for a smaller, serviced office space is a great choice.
A serviced office is one that’s all set up and ready to go from the day you move in. Unlike leased offices, serviced offices offer all-inclusive rents and flexible terms—with contracts starting from as little as three months—or even one month if you opt for a monthly rolling contract!
While you pay a slight premium for more flexibility, serviced office space does work out more economical. With lower minimum terms and no fit-out fees, you’ll only ever pay for the space you need. This means you can grow, shrink or ditch your office altogether with just one month’s notice—rather than the 5-10 year notice period you face with traditional, longer-term leases.
Another financial benefit is greater control over your expenses. When you take a serviced office, all costs—such as facilities, utilities and rent—are simplified into one, single monthly fee. This means you can maintain a more regular and predictable cash flow, which is always a plus during a time where inflation is at an all-time high.
Over the years, we’ve helped hundreds of companies find their perfect HQ. Download our customer case studies to discover how Fresha secured their flexible office space and how Chilly’s effectively downsized their office space—all via Hubble HQ!
Top Tip: Look for office space in the cheapest areas
The next step to downsizing your office is to search for workspace in areas that will give you more bang for your buck. In London, the cheapest areas to rent office space tend to be in Zone 2—so boroughs like Hammersmith, Fulham and Clapham are great places to start.
But to make life easier, we’ve put together a London Market Rent Guide to give you a rough idea of how much office space costs per desk in specific parts of London (as of Q3 2022). These prices are calculated from Hubble data, using data points from over 5,000 offices on our platform.
Top Tip: Survey your team and check the building facilities
When downsizing, it’s always smart to survey your team to get a rough idea of how many people will use the office and how often.
Most companies tend to find their customer-facing teams use the office the most, so taking the total size of those teams together will give a good estimation of how many desks you need. While it’s unlikely that they’ll all use the office at the same time, doing this ensures there’s enough space for other teams who may decide to come in.
It’s also important to keep in mind how much breakout space is in the building you choose. Let’s say one or two days per week are really busy; it’s not cost-effective to get a larger office just because you’ll go over capacity sometimes. That’s why ensuring there is plenty of shared breakout space in the building is important—so you still don’t end up paying for ‘empty desks’.
Companies can use Hubble to identify key insights needed to effectively shape their workplace strategies. You can do this via our Workplace Strategy Tool: a free-to-use tool that will help you survey your employees and analyse the data easily.
Give your team access to on-demand workspace
For remote-first companies looking for more control over their office spend, or those looking to ditch the office altogether in favour of even more flexibility, giving your team access to a global network of on-demand workspace could be a great option.
On-demand workspace—workspace that can be booked by the day or hour—is hugely beneficial as it gives employees choice over how and where they work. For companies with dispersed teams, it’s a great way to ensure they can still access convenient workspaces that are high-quality—whether it’s a coworking space within cycling distance, a private day office in the city or an hourly meeting room for an international conference.
This, along with flexibility and autonomy, is the number one demand for employees worldwide—and offering this instead of redundancy is excellent for boosting morale, productivity, and overall performance and profitability.
Top Tip: Talk to your team and calculate potential usage
To ensure this is the right workplace option for your team, it’s always worth talking to them—whether that’s through 1:1s or a survey. This will also help give you a rough idea of how many employees would use on-demand workspace, allowing you to budget accordingly.
With products like the Hubble Pass, you only ever pay for what you use. We call these ‘credits’, and they’re what allow your team to book the on-demand workspace on the platform.
All credits cost just £5, and the amount you need will depend on your team size, how often they’ll use the Hubble Pass and the type of workspace they book. To get a rough idea, we created an easy-to-use Hubble Pass Calculator that’ll give you a recommended monthly plan and how much it’ll cost based on your credit calculation.
With the Hubble Pass, you can either pay as you go, choose a flexible recurring plan where credits are automatically applied each month, or we can set up a customised plan based on your usage, free of charge. This can be easily flexed up and down, depending on your data.
Opt for a hybrid workplace solution
Given that there’s no one-size-fits-all solution to hybrid working, it’s likely that some businesses may want to combine the above strategies. For example, you can still save money by having a smaller office (HQ) and using on-demand workspace to manage any overflow.
This is hugely popular as it allows c-level executives to ‘flex’ the second-largest fixed cost for most businesses. When you opt for a smaller HQ, you’ll still retain office presence but get much better value for money.
And with on-demand access to workspace in the mix, you’ll be able to easily match spend to usage needs. This means you won’t have to worry about wasting money on empty desks, as your employees will be able to hot-desk from a network of coworking spaces whenever they need.
If you’re thinking about using Hubble to find your next flexible office space, we give all of our HQ customers free Hubble Pass credits. So, as well as having an amazing new office, you and your team can access high-quality, on-demand workspace, wherever and whenever they need it!
How Hubble can help:
At Hubble, we know how difficult it can be to decide on the right workplace solution for your team. But rest assured, our expert advisors can guide you through the whole process—free of charge.
From recommending the most cost-effective strategy for your business to finding solutions that help you take control of your scalability, we’re here to help each company configure a bespoke workplace solution that meets their requirements.
With Hubble HQ, you can rent flexible office space by the month or longer. It’s completely free to find your next office with Hubble, and with over 5,000 offices in London alone, we’re confident that our platform will have everything you need—with live availability. You’ll also:
- Secure the best rates with our unrivalled market data and relationships with the top workspace providers worldwide.
- Get our own dedicated advisor who will manage your search, and viewings and help negotiate on your behalf—helping you to also save on internal resources.
The Hubble Pass
With the Hubble Pass, you can book every workspace you need—including top-quality coworking spaces, private day offices, meeting rooms by the hour and even event space across 800+ locations worldwide. You can also:
- Manage all your global workspace in one place by inviting colleagues, setting guidelines and accessing key data to manage usage patterns and costs.
- Enjoy super flexible memberships that require no commitments or upfront costs. You’ll only pay for what you use and all unused credits are rolled over, making it a great way to manage and control your cash flow in times such as these.
- Control your teams’ expenditure with admin controls, such as credit caps,
Hybrid (HubbleHQ + The Hubble Pass)
By opting for a combination of our two flagship products, you and your team will be able to enjoy all the individual benefits listed above, including:
- A single, consolidated platform for all of your office spend and workspace management
- Transparent pricing and flexible terms
- Free Hubble Pass credits to access a global network of on-demand workspace
- Expert guidance on configuring your own workplace strategy—spanning both HQ and on-demand workspace options
Find out more today!