Boost company savings: effective cost-cutting ideas

Hybrid work can save organizations up to 30% on office costs when properly structured with workplace technology. This shift reduces expenses across property leasing, energy consumption, facility management, and commuting subsidies while improving employee satisfaction and productivity. By coordinating office usage through workplace management platforms, companies gain real-time data to optimize space utilization, implement smart resource allocation, and make informed decisions about office operations without sacrificing employee experience.

Hybrid work today 

What's the current status of flexible work?

Flexible work models fundamentally change how we view office space and its role. The office is no longer just a place to complete tasks, it's now a hub for building relationships and connecting with colleagues socially.

Research shows individuals are more productive when working remotely because social distractions are minimized. However, this isolation means that when employees come to the office, they need space designed for team collaboration. This shift demands intentional office design that fosters both productivity and collaboration, as demonstrated by McKinsey’s new office in Mumbai, India.   

The global pandemic accelerated our transition to this future of work. Research by HSM advisory emphasizes that office design for the future of work must be intentional, creating spaces that foster productivity and collaboration.

New trends for the office space

We're seeing clear movement away from traditional office environments:

• By 2030, 48% of employees will work remotely, compared to 30% before COVID-19 (Gartner)
• By 2022, 60% of workers will prioritize a wellness-equipped smart office over a remote office (Gartner)

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While meeting colleagues in person remains a priority for many, the office role is shifting. It's becoming more than a place to get things done, it also serves a social function where people meet, connect, and collaborate. This presents an opportunity to rethink what types of office spaces are needed and, in turn, reduce costs.

Due to the nature of hybrid work, with employees on different teams coming to the office on different days, desks can be alternated between people. If only half of the workforce comes in each day, the same desks can be shared, reducing the need for larger office space as fewer people need to be accommodated daily.

The trend toward remote and hybrid work continues growing, making it crucial that we adapt by better understanding the needs of such environments and how to optimize them. Efficient use of office space requires central coordination. While hybrid work presents this opportunity, office leaders must organize efforts to produce the happiest, most productive employees.

To implement hybrid work trends, we need to equip offices with the right technology to coordinate remote and in-office employees. Collaboration has always been central to work, but hybrid workforces require more sophisticated tools and spaces to foster it. Workplace innovations are emerging to solve hybrid work challenges and optimize office space usage for cost-efficient systems.

Save costs by implementing a hybrid work model 

Along with a variety of different benefits, the hybrid model can help your business save costs.

First, let's define the costs related to running an office pre-Covid, for a 1,000 sqm office space in Germany.

Using JLL's research, we assume:

• Each employee needs 8 sqm
• Each sqm costs €25
• The ideal desk ratio is 1 (each person who comes to the office has a desk)
• A buffer is applied for peak days when more people come to the office

Important note: In cities like New York and San Francisco, these sqm-prices are 5 to 6 times greater, meaning savings would be even more significant.

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These numbers are based off our new Hybrid Office Calculator.

Property costs breakdown

Property costs include leasing, rent, management costs, and parking. These costs add up to approximately €30,000:

• €24,000 for leasing costs
• €6,000 for ancillary costs

Historically, ancillary costs were around 15%, but with rising energy prices, there has been:

• 50% increase in electricity
• 150% increase in gas
• Overall 20% increase in ancillary costs (JLL research)

Ancillary costs can be broken down into 4 categories with the following potential savings:

How hybrid models reduce costs

Using a hybrid model reduces these costs partly because fewer employees need to come in every day, so less space is needed. With workplace management software, data is collected to measure how many employees are actually coming into the office. By assessing space utilization, you can determine if certain areas can be repurposed or if desk areas can be turned into meeting rooms.

• Space and facility management: We can create smart cleaning offices using workplace technology, which allocates cleaning resources based on how many people actually use the office, along with paying for space and facility management costs, including cleaning.
• ‍Energy costs: Running an office has energy costs such as HVAC and lighting which cost around €4,000 per year. As fewer people come into the office, less space and energy are required, and these costs can be offset. Companies can also choose to temporarily shut off areas to save costs if they know more about future occupancy. For example, if not in use, facility managers can choose to shut down a floor in the office for that day. Using the right technology provides a more immediate impact on cost savings.‍
• IT costs: Businesses incur IT costs such as cybersecurity and cloud services. However, these technologies help facilitate the hybrid model and save costs in the long run. The initial investment in productivity software has great returns over time.‍
• Commuting subsidies: Some companies choose to subsidize commutes. If employees are working remotely, this cost no longer applies. If some employees choose to come into the office a few times per week, companies will have fewer costs to subsidize.‍
• Overlooked costs: There are also numerous costs that may be overlooked when running an office, such as having a cafeteria for your employees or stationary and utilities.

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The benefits of well-organized hybrid work 

So we mentioned that there are many benefits of well-organized hybrid work aside from helping save costs. Let’s explore some of them!

Hybrid work, by nature, is flexible: that is what makes it appealing to many people. Choosing where to work gives each individual the autonomy to design their workday in a way that best serves them. Whether this means working from their home office, from a new country, or from a traditional office, hybrid gives employees the choice to choose all or none of these! 

While a flexible office saves costs for organizations, it also saves costs for employees, most pertinently transportation costs. With gas prices rising and public transportation costs adding up overtime, skipping the commute to the office can save a substantial amount of money. Additionally, avoiding a traffic jam or late train reduces the stress of daily commuting. 

From a work culture standpoint, hybrid models are also great for ensuring work-life balance. The additional time saved from commuting and the ability to work from anywhere give individuals the opportunity to spend more time doing hobbies, exercising and fulfilling their family duties without additional stress. 

With all of this said, it is easy to understand why hybrid work models would then lead to increased employee satisfaction and a reduction in attrition. Having a work-life balance, flexibility, and trust will make employees happier, more satisfied with their jobs, and less likely to leave their company.

Hybrid work models have also been shown to increase productivity. On average, fully remote workers are 47% more productive than their counterparts working from the office every day of the week. Our research shows that well-coordinated hybrid work, such as using a workplace management system, can win your employees up to a day of productivity, each week. 

Take action on office cost reduction

The office's role is changing as we explore different models to structure work, such as hybrid. These shifts allow us to reassess workplace costs, helping to save on resources and space we might not need if working from the office every day. From reducing the amount of energy usage and maintenance costs, hybrid offices can greatly benefit from workplace technology. With coordinated hybrid work, there is an immediate impact as data from a workplace management platform provides real-time feedback.

Optimize your office space and reduce costs today with deskbird: request a free demo and discover how you can easily manage a hybrid workspace without spending a fortune.