Why tech-style offices are the cost-effective choice

 —  Article by JLL Staff Reporter
Business meetin in tech style office
Image credit: Shutterstock

From games rooms and comfy seating to the neighborhood’s best coffee bar, the hallmarks of the tech-inspired workplace can make flexible, engaging design seem like a luxury only accessible to companies with the biggest renovation budgets.

Contrary to common perception, it’s actually cheaper in the U.S. to build engaging, flexible workspace than it is to invest in traditional office space designs. Right now tech-style space fit-outs cost nearly 15 percent less—approximately $30 less per square foot—than conventional office space, according to JLL’s recent report on tech office renovation and construction trends.

“Tech companies with big budgets may have been the early adopters of modern, flexible workspaces, but these days they’re not alone in the quest for more engaging environments,” says Jacqueline Dompe, Northwest Regional Manager of JLL’s Project and Development Services. “Employees and employers in a wide range of sectors can see the value in choice. The good news is that flexible workspace is more cost-effective than traditional offices.”

Why cost-effective tech-style design is no oxymoron

It may sound counterintuitive, but there are a few logical reasons why workspaces with the ‘wow’ factor are more cost-effective than those without.

For starters, look to the construction materials (or lack thereof) needed for a job that entails unassigned bench-style seating, open floor plans and ‘un-rooms’ (three-sided standing conference rooms). These features are becoming increasingly common as companies strive to design flexible spaces that accommodate both employees’ needs for both collaborative and private areas and employers’ needs for agile workplaces that change with the times.

“Flexibility means fewer permanent walls and doors—thanks to more open floor plans and fewer private offices,” says Dompe. “With less physical material in the budget for a tech-style design, these project costs can be reduced by an average of 21 percent, saving roughly $20 per-square-foot on building materials alone.”

There’s also the potential to save in overall square footage, as more flex-oriented companies are offering alternative workplace options like co-working programs and high-tech remote work support for employees who choose to work outside the office.

Landlord incentives tend to provide the other major cost savings. Tenant Improvement (TI) allowances vary widely across markets, so tenants in some cities can expect to pay less out of pocket for their fit-out than in others. The local trend can have a major effect on budget decisions, considering the wide range of landlord-funded TI allowances in major markets—spanning from $20 to $95 per square foot.

The construction savings that come with building out a flexible workplace offer a big bonus—the opportunity to divert those dollars elsewhere.

Got savings? Try spending it on people

In an era of intense competition for talent, tech companies are striving to boost employee satisfaction with engaging workplaces and high-quality office amenities. So, while tech office fit-outs achieve significant savings in hard costs and materials, it’s also wise to invest that money back into the workplace.

Workplace improvements, such as modern furniture and sophisticated audio-visual (AV) technology, can add another $50 per-square-foot to renovation costs yet when these are designed with an employee-first mentality, they can go a long way in driving return on investment.

According to Dompe, culture-driven, responsive design can support both individual strengths as well as team dynamics, ultimately benefiting the organization’s productivity and profitability.

“Great workplaces offer more than just a series of interesting layouts and trendy amenities,” says Dompe. “They bring people together when and where they want, and also give them the choice of space to do their job as well as possible.”

Think choose-your-own workspaces, fully catered cafes, onsite ‘genius bars’ and an array of downtime space, from game rooms to yoga studios to public art galleries. But even the slickest design can fall short if it fails to match the culture first. “A beanbag chair may be coveted in one organization,” says Dompe, “but in another, the leather armchair might make a lot more sense. It’s critical to understand how people will interact with any space and any feature.”

Flexible design can yield up-front savings. Done well, it can generate far greater value in the long run, too by creating a workplace where, just like was seen in the dot-com heyday, people enjoy spending their working hours.

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