Don’t Be Fooled by m² Price – Choose Your Office Space Wisely

Studies show that a lot of companies pay too much for their premises and, more importantly, for the wrong things. One major reason for excess costs is the fact that companies tend to base their selection on price per square meter, although price per workstation would make a much better indicator.

Companies Pay Too Much for Their Premises – And for the Wrong Things!

Many companies must compromise when they are choosing an office space, especially when it comes to location and rent. Why are some so much better at achieving space efficiency (square meters per workstation) than others?

“The single most important explanation for poor space efficiency is that many companies initiate their business premises acquisition by defining a pain threshold for the price per square meter. This means that they look at wrong indicators from the onset,” says Henri Rantalainen, Director of Technopolis Tampere.

How to Choose Smarter Indicators: Price per Square Meter vs. Price per Workstation

Price per square meter is a poor indicator as it fails to address the fact that a workspace consists of the entire physical work environment instead of mere floors and walls. Price per workstation, as already discussed above, provides a much better point of reference.

Poor Indicator: Price per Square Meter

Many companies start their search by specifying the minimum number of square meters and the maximum price per meter, and by so doing exclude many potential workspace options.

As the cheapest m² prices are often found in old buildings located in unfavorable areas, the company usually has to compromise over location, comfort or functionality – or, in the worst case, all of them.

And if the company faces any changes in the future, such as an increase in its headcount, outdated spaces can cause more grey hairs.

“Old office buildings are often quite disjointed, from floor plans to air conditioning. They are difficult to convert into modern open plan or multi-space offices without requiring a full renovation and new air conditioning systems and furniture”, explains Rantalainen.

Even if walls could be moved, old air conditioning may not be compatible with a more compact seating arrangement.

In traditional solutions, price per square meter may thus seem low, but due to the vastness of spaces, price per workstation can easily soar – especially if the premises must be centrally located and easy to access.

Better Indicator: Price per Workstation

Unlike old premises, modern offices are by default designed for adaptability.

From the customer’s viewpoint, adaptability means that the spaces and interior solutions can be designed to suit the individual needs of the company. Thanks to this flexibility, companies need far less floor area than they would in old-fashioned premises.

“If necessary, modern facilities can also be modified afterwards without negative impacts to improve, for example, air quality, acoustics, functionality or comfort,” Rantalainen adds.

Price per square meter may be seemingly higher in modern buildings than in traditional ones, but since the required area is smaller, the overall cost per workstation can be the same as in a traditional alternative – despite the more central location. The comfort and efficiency of the space are also big pluses.

Take the First Step Towards a More Efficient Workspace

Old-fashioned and modern workspace solutions are like day and night: a traditional, inefficient space on the outskirts costs the same as a functional, comfortable office in a more central location. Comparisons limited to mere price per square meter tend to lead to the elimination of the latter option.

Office acquisition should always start from the company’s own needs. When mapping the different options, facility providers should not be asked to quote the cost per square meter, but rather to present a concrete plan regarding the layout and the placement of workstations within a space. Based on this plan, potential overall costs per employee are easy to calculate.

Changing the indicators is always the first step towards a more efficient work environment. If you want to avoid this and other common mistakes in office space selection, download a quick reference guide on comparing premises costs.

Read more: How to control workspace expenses – CFO’s short guide to smarter office space selection