By Tamara Sheehan
Director of Business Management
SpaceIQ

In the era of evolving offices, rising commercial real estate (CRE) costs, and the gig economy, workspace optimization is a crucial focus of many companies. It’s about making the most of office space by maxing revenue generation opportunities and minimizing CRE outlays.

There are several philosophies on the concept of workspace optimization, and more than a few variables dictating it. It’s the natural tendency of many executives and company leaders to approach optimization from a cost perspective alone. After all, the workplace is often the anchor of the balance sheet. And while cost is certainly one of the largest variables, it’s not necessarily the most important. Employee experience plays a big part.

Space and experience share the same scale

It’s possible to pay exorbitant costs for a spacious lease and have productivity problems. You may pay next to nothing for CRE and get phenomenal productivity from your workforce. Reality is typically somewhere in-between. It’s important to realize the relationship between space and experience.

Put people too close together and you’ll create a workplace rife with friction. Isolate them and they won’t develop attachments to coworkers and the company. The perfect medium is a workplace that’s configured to support employees without weighing on the balance sheet. This requires an understanding of space and how employees interact with it. What are their expectations and what do they need to thrive? Workspace management software is invaluable in this capacity.

Optimization goes beyond understanding how much space you have or how many people are using it. It’s about making sure space is purposed appropriately to support people and operations.

Friction ruins ROI

Consider what happens if you cut your lease in half. Theoretically, you’ll also cut your available workspace by 50%. But your workforce remains unchanged. From a cost perspective, it’s a big win. From an operational and experiential standpoint, it’s likely to be disastrous. You now have half the space available for the same number of people—a recipe for friction.

Nothing kills productivity and experience like friction. By affiliation, the return on your lease investment also suffers. You might be able to cut your lease in half with one swift action, but you might also take a big chunk out of your revenue if your employees are at each other’s throats or unable to function.

This is where workspace management comes into play. It’s about addressing the physical variables of your workplace to support positive change.

Consider the problems of cutting your lease and space in half. Now, consider how your workforce will fare if you shift to hot desks and remote work opportunities. If 50% of your workforce comes in on Monday, Tuesday, and every-other Friday and the other 50% comes on Wednesday, Thursday, and every-other Friday, you’ve effectively cut the daily utilization rate of your office in half. More importantly, you’ve reduced or eliminated the friction caused by consolidation.

Real estate isn’t the only cost to consider

In the context of space optimization, total available space isn’t the only contributor to employee experience. The type of space provided shapes experience more than anything. The right space can also maximize the value of real estate and optimize fixed lease costs.

Take things like an in-house kitchen and coffee bar. On the surface, dedicating 250 square feet to these perks may seem like a wasted cost. But consider the effect they have on employee experience and, in turn, productivity. Such a space encourages employees to come in early and stay late. It’s a space for the free exchange of ideas. It keeps workers in the office instead of a coffee shop on their breaks. It validates their work experience and makes them feel appreciated.

All this feeds productivity and unconsciously creates traits like pride of work, accountability, and responsibility. If that 250 square feet attracts and retains talent, and encourages a higher caliber of work, the balance sheet may reflect ROI that more than pays for it.

The same could be true for any type of space. Workspaces that enable employees to work better and encourage a positive workplace experience have intrinsic value that’s not always translated in direct dollars and cents.

Don’t measure optimization in dollars alone

CRE is naturally measured in dollars. It’s part of the balance sheet and comes with ongoing expenses. But that doesn’t mean it’s solely valued by its monetary cost or worth. When optimizing the workplace, it’s important to look beyond cost and consider things like usage and experience.

The true value of a workspace is in how it affects the company. How are workers using it? What value does it add to operations? Does it impact culture? It can be hard to attach a dollar value to these questions. But what’s plain to see is the effect a good—or bad—workspace has on the employees using it.

Keep reading: what is employee experience?