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What is the ROI of an Office Fit Out?

Updated: May 20

Office Fit Out Return on Investment

At its best, an office is an inspiring, engaging, and collaborative environment that maximises staff productivity, communication, and satisfaction. At its worst, an office is an irrelevant, inconvenient and depressing environment that lowers morale, increases churn, and reduces  productivity.

 

Your current office is probably somewhere between these two extremes. But if you're planning to refurbish or relocate your office, you need to make sure it's more like the former than the latter. Because an office fit out is such a big investment, you need to carefully consider (and maximise) the return on investment that your new office will bring.

 

Today, we'll go through 6 ways your office fit out can provide a return on your project investment. By the end, you'll know what they are and why they matter. We'll also guide you to helpful resources to help you apply these learnings to your project.

 

Productivity

The most important way your office fit out can deliver ROI is through improving the productivity of your people. Despite the importance of staff productivity, improving it remains a problem. Most companies have seen a 3-6% productivity drop since 2020. As the place where your staff spend most or all of their working lives, your office has a profound impact on their performance.

 

Most office staff spend more than 2,000 hours a year working, so even a small increase in productivity can have a significant impact on the bottom line. The productivity benefits of a new office, however, can be far from small. Research shows that a well-designed office can increase productivity by up to 20%. To learn how to improve productivity with office design, read this article.

 

Rental Costs

Most services companies spend 10-15% of their annual revenue on real estate. However, the average organization has 30-50% more real estate than it needs. This means you could be wasting more than 5% of your annual revenue on office space you don’t need!

 

Depending on your current design, you may be able to make a space-saving of around 20-40% by implementing a more space-efficient layout. This means you could relocate to a new, smaller space and save costs. Alternatively, you could create a sublet space within your existing office, generating extra income.

 

In recent months, we’ve worked with Casio and Pcubed to reduce their office space requirements by 33% and 25% respectively. Casio chose to relocate, while Pcubed created a 2,500 sq/ft sublet space within their existing building. Apply these practices to your project by reading 7 Ways to Improve Your Space Utilisation.

 

Operational Costs

With rises in energy costs, the costs of running the office every day are higher than ever. In many cases, operational costs are now around 25% of annual rent. An office fit out is an opportunity to reassess all these costs and how to reduce them going forward.

 

For example, air conditioning accounts for around 40% of an office's total energy usage. Modern HVAC systems are up to 50% more efficient than systems from 10 or more years ago. This can create a 20% saving in your total energy costs. Modern electrical appliances are also much more efficient than outdated options, further reducing your office running costs.

 

Talent Attraction & Retention

Retaining high-performing staff is absolutely essential to the success of your business. Replacing staff is costly - around 30% of the annual salary for a junior employee and up to 400% of the annual salary for executives. A great office design will help you save a lot of these costs by improving staff satisfaction, thus reducing your staff turnover.

 

Office fit-out can also improve your talent attraction by creating a great first impression. An eye-catching, on-brand reception and interviewing area will help convince interviewees that they want to work at your company. Your office relocation can also improve your talent attraction. By ensuring your workspace is located in a convenient and/or prestigious location, you are giving your company access to the best possible talent. To learn more, read How to Improve Your Talent Attraction & Retention With Office Design.

 

Wellbeing

One of the challenges managers have to deal with is staff absences. Workers in the UK lose an average of 30.4 working days a year due to sickness or illness-related underperformance. Modern offices maximising biophilic design have reported a 30% decrease in sickness-related absences. They also reported an increase in cognition and sleep quality.

 

A high-quality office fit out can have a tangible impact on the wellbeing of your people. As Tim Gould, at Casio said, “The key benefit has been our staff have been happier. Happier people are more productive people”. For more help improving staff wellbeing through fit out, read this article.

 

Culture

Over the last few years, maintaining and improving culture has become one of the most challenging (yet important) issues for business executives. 94% of leaders say that a healthy culture at work is vital for success. As the place where your staff spend all of their working lives, your office environment impacts your company culture.

 

Culture in office design is not about brand colours and slides - although it might include those. It's about creating a workspace that looks and feels like your company. This includes everything from the location to the layout to the air conditioning to the coffee. It all affects the staff experience, so you need to consider it all. To learn more, read https://www.zenturaworkspace.co.uk/post/culture-tailored-office-designHow to Create an Office Design Tailored to Your Culture.

 

Maximising the ROI of Your Office Fit Out

Unfortunately, we can’t give you a definitive ROI on your office fit out, because there are so many variables. Each business's situation is completely different. The ROI of your project will depend a lot on the quality of your current office design, as that is the baseline by which all gains will be judged.

 

By reducing two of your biggest costs whilst improving your productivity and talent management, an office fit out can have a tangible impact on your company performance and deliver an amazing return on your investment. To learn more about improving your return on your real estate investment overall, read this article.

 

At this point, one of your biggest concerns is probably your office fit out costs. To take the next step, download your Office Fit Out Cost Guide. You'll learn everything you need to know about the cost of your office fit out, from how to choose a specification to benchmark sq/ft costs. Download your copy here.

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