Office Refurbishment ROI
Are you trying to persuade your company you need to refurbish your office, but are unsure how to build a solid business case? Perhaps you know you need to refurbish your space, but are unsure what budget to set. Whatever your situation, you want to know what ROI you can expect if you refurbish your office.
Unfortunately, the answer is "it depends". There are dozens of factors that affect the commercial benefit of your office renovation, from the state of your current space to air quality. There is no simple formula to calculate your office fit out ROI.
However, that doesn’t mean you can't build a business case. In this article, we'll go through the key commercial benefits of an office refurbishment, and how you can maximise them in your own project. By the end of this article, you'll understand how an office refurbishment can deliver ROI. You'll know where to start building your own business case.
Collate & Analyse Data
When building a business case for your office refurbishment, you need data, not speculation. There are 3 main ways you can gather data: internal research, secondary research, and workspace consultancy.
Internal research is the information you already have or can easily collect yourself. This includes things like lease and utilities costs, and how many staff you have in the office. You could also survey staff about your current office design and what would make them more effective
Secondary research is relevant data compiled by someone else. The are many studies about how different elements of workplace design can impact performance, collaboration, and wellbeing. This research can help you understand the impact that an optimum workplace design can have.
If you need more data and insight, then you could engage a workspace consultant. They will be able to carry out multi-round surveys, space utilisation studies, and user workshops. This will enable them to build up a detailed picture of your current workspace, and how it could be optimised. To learn more about workspace consultancy, read what is workspace consultancy?
Cost Savings
Cost savings are a key part of your business case because you can be more certain about their impact. It is also a lot easier to convince other stakeholders about the importance of reduced costs. Despite many professional services companies spending 10-15% of their annual revenue on real estate, 30-50% of it is often wasted! By working with an office designer, you could create a more compact layout. You could then move to a smaller, cheaper office or create a sublet office to bring in additional income.
Operational costs are also a key part of any office renovation business case. Operations costs often come to around 25% of rent. A refurbishment is an opportunity to assess these costs and if it is worth replacing old systems with new, more efficient ones. For example, 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 office energy costs.
You should also consider other business costs that could be impacted by refurbishing your office. For example, if your staff often book client meetings at coworking spaces, an office refurbishment could save these costs by creating a more collaborative space.
Productivity
The crucial benefit of an office refurbishment is an improvement in productivity. In recent years, productivity has fallen by 3-6%. One cause of this is workspaces that no longer suit the way staff work. 2 in 3 office workers say that an inadequate office space has an adverse effect on their in-work performance.
Research shows that a well-designed office can increase productivity by up to 20%. By creating an environment that suits the varying tasks of your people, their office will no longer hold them back. As a result, your overall company performance will improve. An excellent office design will also help keep them inspired and motivated throughout the day, further improving their productivity. To learn more, read How to Maximise Staff Productivity With Office Design.
Recruitment & Retention
Another crucial benefit of a well-designed workspace is improved talent attraction and retention. High performers in your workspace are about 400% more productive than average performers. Keeping them and attracting more like them is absolutely essential.
In the war for talent, an excellent workspace experience can set your company apart from the competition. 48% of employees consider their current office design to have a major impact on whether they stay working for a company or not. A great workspace can also help attract talent to your company by providing a unique first impression. Learn more by reading this article.
Wellbeing
A healthy workforce is essential to the success of your company. Poor health is a major drag on workplace wellbeing. Workers in the UK lose an average of 30.4 working days a year due to illness-related underperformance. This costs the economy £78bn.
Modern offices maximising biophilic design have reported a 30% decrease in sickness-related absences. They also lead to an increase in cognition and sleep quality. An ergonomic and biophilic workspace will boost the physical health of your people, while an on-brand and inspiring design will boost their mental wellbeing.
Planning Your Office Refurbishment
An office refurbishment can be an excellent investment for your business. It can help to reduce your real estate and staffing costs while improving productivity, communication, and wellbeing. By using these steps to build your own business case, you can be sure that your office delivers maximum ROI.
To take the next step, read How Much Will it Cost to Refurbish My Office in 2024? There, you'll learn about the different types of office refurbishment, the different factors that affect refurbishment costs, and the costs that are typically involved. To learn more about office refurbishment budgeting, check out “how to set an office refurbishment budget”.
