The first question to answer when considering an office relocation is how much space you need to run your business efficiently. Too little workspace can make recruitment and retention of employees challenging. Conversely, paying for too much space is costly and inefficient.
A few rules of thumb may be helpful here. Your businesses space requirements are heavily dependent on its commercial usage. For example, Call center styled operations can have as little as 125 – 150 square feet of space per employee but more typical businesses have 200 – 300 square feet per employee. Where your firm falls in these very broad ranges is dependent on a host of factors. Headquarter locations, space layouts with many private offices, firms that need sizeable in-house training facilities and operations that have most employees in the office on a daily basis require more space per person. Conversely, sales offices with bench seating in open bullpens and firms that typically have many employees regularly out of the office can often make do with less space per employee.
When calculating how much space you need do not forget to build in some reasonable amount for growth in your initial space plan. While many firms try to accommodate growth via negotiating rights of refusal and expansion options, such strategies rarely supply the additional space at the time required. In my experience, not planning for some significant degree of expansion in your initial leased space is a mistake. How much growth you build in will depend on your business plan, growth rate, budget and time horizon.
The amount of space your firm needs is also dependent on the building’s layout and amenity mix. Rectangular floorplans with moderate corridor depths typically reduce the square footage required for each employee. Amenity rich buildings with upscale Wi-Fi lounges, outdoor spaces, in building dining and shared conference facilities can also reduce the necessary square footage per employee by enabling your employees to use shared building amenities rather than building them out in your space.
Finally, remember that having more employees per square foot does not always decrease total cost. As you increase employee density, you will need to spend considerably more on electrical and mechanical systems to deal with the increased people loads and many buildings will be unable to accommodate the increased parking requirement for employee cars. Increased density can also increase turnover and decrease morale, which are far more significant cost drivers for most businesses than office rent.
Although the trend in recent years has been for businesses to lease less space per employee, however, we are starting to see a reversal of this practice as labor markets have become tighter. While rules of thumb are a good starting point, the best way to assess your requirements to do a professional space plan for a potential space, which most prospective landlords will be gladly willing to pay for.