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In this modern world how much difference does it really make where a company’s office is located? With internet speeds being so quick and available people can work anywhere, whether it’s in a coffee shop, a train or even from a bedroom. Most employees in the majority of industries have the ability to do just as good and thorough a job as they would if they were sitting at their computer in their office.
This has become even more the case with the advance in video conferencing. If you have a web cam and a computer screen, two employees can have a personal meeting whilst sitting on opposite sides of the world. It is widely thought that companies will make increasing use of this sort of technology, which via a home web cam and the click of a button, allows them to see and talk to any of the other employees, who also happen to be at home or mobile. This would certainly make business sense in terms of saving money. There would be less rent and running costs to pay, if any at all. The only cost would be an upfront one to install the required technology in employees’ homes. It would also provide incredible access opportunities to a truly worldwide workforce that can communicate seamlessly from one side of the globe to the other.
Say a hedge fund, which has traditionally been based in an office in Mayfair, decided that its employees are all going to work from home and communicate through video conferencing, then it will save a huge amount of money on rent. Morgan Pryce would normally suggest that an office should allow 100 square feet per person which will cover them for meeting rooms and breakout areas etc. An all-in per-annum cost for a prime office in Mayfair is likely to be in the region of £130 per square foot. This breaks down to £90 per square foot on rent, £30 per square foot on rates payable and then around £10 per square foot on service charge for the running of the property. Therefore a company that sets up ten staff to work from home could save as much as £130,000 per annum.
Of course this is a great concept but in reality people running companies may struggle to deal in a practical sense with their employees being located all over the country or even the world. They may think employees will be more motivated by going to a place of work rather than sitting in their own house or flat which is full of distractions.
Coming back to the original question of whether office location really matters, the answer is that right now of course it does. Businesses need to be in certain areas that represent their company’s image, impresses their clients and provides an easy place to get to and enjoyable place to work for their employees.
However, as the concept of employing people to work from home catches on, then office location may become less and less important. These sorts of changes in attitudes will take many years to come to fruition and may prove more popular in some locations and cities than in others.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.