July 20, 2020 | Business Plans
When the COVID-19 pandemic hit Maine and shut down most of the state, many companies who were able to have employees work from home did so. Even now, as offices in Portland and throughout Maine begin to welcome back workers, many companies are continuing to have employees work from home.
If you currently have employees working from home, and plan to continue this practice (or some form of it) for the foreseeable future, you may want to consider rethinking your physical office space. Do you need all the office space you currently have? Do you need it all? Here are a few things to consider to help you make the decision.
What Others Are Doing
A recent survey by consulting company Mercer reveals the following findings on remote working arrangements.
- 93% had provided “more flexible work options to align to the new way of working” during the pandemic.
- 58% said that once regulations are lifted, they expect at least 25% of their employees to work remotely.
- When asked to predict future post-pandemic work-from-home policies, 52% expect they’ll change to “allow for more flexibility to work both on-site and remotely.”
Saving on expenses
The most obvious factor you may be considering is financial. Less office space typically means less spent on rent. The actual impact will vary based on your business, but let’s suppose you could reduce your rent by at least 25%. That could put quite a dent in your monthly expenses. You’ll need to analyze whether the savings in your business would make cutting your space worthwhile. Or maybe by reducing your space needs, you could afford a more desirable location without raising your rent expense.
Arranging for remote work
Assuming that reducing your physical space will substantially lower your operating costs, you’ll next want to consider how this new arrangement will work. You may want remote workers to occasionally come into the office to perform tasks that aren’t ideally suited for digital tools. If this is the case, perhaps maintain several flexible workspaces where workers can just pop in and use as needed.
Whatever you do, try zero-basing your workspace needs by determining what you require without reference to your current workspace. Starting from scratch can be eye-opening.
Having employees work from home on a long-term basis may cause you to incur some new expenses. For example, you could be footing the bill for a proper desk, chair and other essential furnishings that you supply for workers in your current space. You also might need to purchase printers and office supplies, along with providing cell phone and internet reimbursements, to compensate home workers that purchase items used for business purposes. And you might need to beef up IT safety measures to prevent cyberattacks on less-secure home networks.
What is your current lease situation? Carefully review all your contracts to assess how soon you could make a change. Commercial real estate owners and managers are in a difficult spot right now, so they may be more willing to negotiate.
Evaluating Your Options
Suppose you could give up some of the space you’re currently renting and sublease the extra space to another tenant. Or, if it’s allowed under your lease contract, you might sublease all the space you’re renting and relocate somewhere else that better meets your needs. But — beware — that means you’ll become a landlord, with all the financial risk and potential headaches involved.
Another approach could be to negotiate a buyout of your lease. Whether you’d come out ahead would depend on the kind of a deal you’re able to work out. If you’re not far into your lease term and your current rent is below market, your landlord might be happy to see you go. The flip side is also true: If the commercial real estate market in your area has cooled off, your landlord may not make it easy for you to break the lease.
Moving a business is no small matter. There’s obviously the financial costs, but the effort and resources required to move office equipment, files and such is never minimal — and doing so in the middle of a pandemic can further complicate the process.
Think long term. Staying put until your current lease runs out might be required to avoid penalties for breaking your lease and to give you enough time to get a handle on your long-term real estate needs.