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Hybrid Working Is the Future: But How Much Is It Going to Cost?

As employees everywhere are looking for more choice and flexibility around where they work, companies are asking how to manage a hybrid workplace. Crucially, they are asking how to budget for and invest in a hybrid work set-up. Read on to find out what costs you need to plan for to make the most of hybrid working.

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Hybrid Working Is the Future: But How Much Is It Going to Cost?

Hybrid Working Is the Future: But How Much Is It Going to Cost?
Hubble

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BST

LinkedIn Live

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“Hybrid work” is here to stay; there’s no doubt about it. The pandemic has changed our attitudes towards flexible working—so much so that business giants, from Apple to Amazon, have adopted hybrid strategies to empower employees to work in a way that best suits them.

This could either be from the HQ, home and on-demand workspaces—or a combination of all three. 

But the hybrid workplace revolution has left businesses with a crucial question: how much will this all cost?

Pre-pandemic, the workplace budget primarily went towards the office rent. It was the second-highest fixed cost for most businesses, with the cost per employee averaging around £500 per month in London. In NYC, the average cost per employee for flexible office space  is around $510 per month.

But of course, this has all changed. Employees worldwide are expecting more choice and flexibility around where they work—and businesses have either repurposed their existing offices, decreased their office footprint or ditched them altogether as a result. 

If businesses want to invest their money in the right places, they need to ensure their hybrid workplace will work for them financially—and this requires a lot more planning. 

As the world’s first hybrid workplace platform, Hubble’s here to demystify the process.

In this article, we’ll break down how the cost of office space will vary once you adopt a hybrid strategy—as well as how to establish whether it’ll financially work for your company. We’ll also cover the things that make hybrid working more expensive, so you’re never left in the lurch.

How much were businesses spending on their workspace pre-pandemic?

Before the pandemic hit, the workplace budget primarily went to one place: the office rent— so budgeting for individual employees was pretty straightforward. But how much were businesses spending on each employee to work from the company HQ?

Although the exact cost will vary from company to company—as location, workspace provider and type of office play major factors—businesses would typically spend around £500 per month on each employee to work from an office in London or $510 for NYC. 

If you split this across a typical 5 day working week, then the monthly workplace budget roughly equates to £100 or $102 per day that each employee works from the office each week. 

This may also include amenities such as free coffee, gym facilities and bike storage—which you’d typically find in coworking spaces such as WeWork or Techspace

But since the traditional 5-day office week is no longer the standard practice, the workplace budget has become a lot more flexible. It’s moved from a fixed cost to a variable one—and with that comes new opportunities to make it entirely bespoke to individual employees. 

What’s the budget breakdown for hybrid companies?

For us at Hubble, businesses who prioritise individual employees will ultimately win the war for the best talent. One of the most effective ways you can do this is by adapting the office budget to align with where employees actually want to spend their time.

For example, if your teams typically spend 2 days in the company HQ, 2days working from on-demand workspaces and 1 day at home—then you'll be able to re-allocate your budget accordingly to maximise employees’ experiences in whatever workspace they choose. 

This would mean roughly £200/$204 on HQ space, £200/$204 on access to high-quality, on-demand workspaces and £100/$102 on remote work support and perks—such as curated treats or home office equipment—per employee, per month. 

This way, employees won’t miss out on a great working experience—regardless of whether or not they spend every single day in the company HQ. For businesses, this means a happy and productive workforce which can also boost your ability to attract and retain top talent. 

But what will the budget go towards?

Now that hybrid businesses will allocate the workplace budget across three different workspaces—two of which are relatively new additions—employers will be wondering what they should be putting their money towards. 

Again, this will vary from company to company—as each workforce will be made up of different people with different needs. At Hubble, we always recommend speaking to your employees to find out what they’ll need from you to enhance their working experiences. 

You can do this by scheduling 1:1s or sending out surveys; the latter being the most effective. We make this easy with the Workplace Strategy Tool—our free-to-use questionnaire and personalised results dashboard, designed to help employers establish what workspace facilities their employees will need—whether that’s a coworking space with pet-friendly access or dual monitors for their home office.

To make things easier, we’ve broken down the facilities or equipment individual employees may need as part of their budget—depending on which workspace they’re planning to use:

HQ

The workplace budget for the office rent will be similar to how it worked before the pandemic; in the sense that it’ll cover the HQ.

But since hybrid working has changed our relationship with the office—so much so that over half of London’s new office constructions are refurbishment projects—the HQ budget will cover a lot more than employees simply working at desks. It may also contribute to: 

  • Meeting rooms 
  • WiFi
  • Collaboration spaces; such as breakout space and creative zones
  • Kitchen facilities 
  • Mailing addresses
  • Secure access
  • Cleaning services
  • Storage space
  • Trading addresses

Home 

Of course, employees' home working setups will be dependent on their individual environments—as far as things like natural lighting and air conditioning are concerned. But there are still facilities employers can offer that’ll enhance their home working experiences:

On-demand workspaces

Day passes to on-demand workspaces—workspaces such as meeting rooms, private offices, desks and event space that can be booked by individuals or teams whenever they’re needed—are also great ways to better an employee’s remote work experience. 

At Hubble, we make this easy with the Hubble Pass—your all-access ticket to a global network of on-demand workspaces. While the coworking spaces on the platform are all unique, so the exact facilities will vary from place to place, they’ll usually offer a whole host of the following amenities: 

  • Lightning-fast WiFi
  • Bike storage
  • Free coffee 
  • Pet-friendly access
  • Phone booths
  • Gym facilities
  • Free printing
  • Rooftop terraces
  • Wellness/Meditation rooms 
  • Bars and cafes 
  • Outdoor areas 
  • Creative zones 

What can make hybrid working more expensive?

Hybrid working has skyrocketed over the past year—and so it may feel like a relatively new concept. As a result, navigating the unknown can produce a few potential pitfalls which can leave hybrid businesses with a more expensive workplace strategy. Here a few examples:

You end up paying for a large office space that doesn’t get used 

This can be an easy mistake to make. There are many reasons why a business may end up with too much office space. For example, in the lead up to the UK’s easing of social distancing measures, employers may have assumed their employees would rush back into the offices—and subsequently signed a contract for a large office space. 

Of course, some employees will be keen to return to offices—with social interaction, in-person collaboration and team bonding being the main drivers. But the truth is, many employees have really enjoyed remote working—thanks to the lack of commute, financial savings and more time spent with loved ones. 

So, forking out on a large HQ may be counterproductive. It’s crucial to remember that there’s no “one-size-fits-all” solution—so consulting employees before you make any decisions is the most effective way to avoid this.

Committing to a plan that’s unsuitable for employees

Businesses may also commit to a plan that isn’t right for their company—and as a result, their hybrid workplace solution becomes more expensive. For example, businesses may end up with too much or too little office space—as well as running out of budget for home working equipment.

As always, speaking to your teams’ on a regular basis is the best way to prevent this from happening.

Trying to save money 

On the flip side, businesses may think that adopting a hybrid strategy will actually save them money—as they’re paying less overhead for employees to use the office. But again, this is not the case. 

Just because your team is out of sight and are working somewhere other than the company HQ, it does not mean that you shouldn’t prioritise their work setup just as much. For us at Hubble, the companies that work to enhance their employees’ working experiences—no matter where they are—will create happier and more inclusive work environments.

Businesses can easily do this by sending out regular employee surveys, and using these insights to inform their budgeting. 

Sitting back and doing nothing

And finally, there’s sitting back and doing nothing. While this may seem like the easiest option at the time; it may actually cost you in the long-run. If businesses do nothing to re-allocate workspace budgets to suit individual employees, they will have a hard time attracting and retaining talent—which can leave businesses with a rather expensive revolving door.

How can businesses ensure their hybrid workplace is financially sustainable? 

Choose flexible office space for your company HQ 

If there’s anything that the pandemic has taught us; it’s that things can change quickly. So, opting for flexible office space—also known as flex space—is a great way to keep up with employee preferences as they evolve.

But while the cost of flexible office space might be higher on paper—as you’ll pay a slight premium for easier move-in and fewer up-front costs—flexible office space will also save you money in the long-run.

With flex space, rent is paid in an all-inclusive, often monthly-rolling bill. This means employers will have greater control and predictability over their cash flow—and in a time where circumstances are always changing, this has never been easier. If employers need to quickly expand or downsize their offices, they can easily do so by amending or terminating their contracts in the following month(s). 

Assign your budget accordingly 

We mentioned earlier that businesses can reduce or adapt the office budget depending on where employees would like to work, which may feel daunting. But one of the most effective ways you can handle this is by opting for a holistic workspace solution (like Hubble!)

Our hybrid workplace platform enables you to manage all your hybrid workspaces in one place. To do this, we’ve built four flagship products: the Workplace Strategy Tool, Hubble HQ, the Hubble Pass and Hubble Perks—all of which are designed to help businesses target their budgets according to their employees’ needs. 

This is crucial. Over the pandemic, employees’ expectations have shifted—and they’ll be expecting more choice and autonomy over where they work. That’s why our partner Omnipresent is working hard to help companies manage their teams  working from anywhere. They’re a global employment services provider, giving companies the support they need to employ new or existing talent anywhere in the world. Like us, they believe that employee experience needs to come first. 

Businesses that fail to acknowledge this in their workplace strategies  will risk burning a deeper hole in their pockets. Not only will it increase employee turnover, but it’ll also dampen your ability to attract and retain the best talent—and for us at Hubble, it’s the  businesses who put their employees first that will ultimately come out on top. After all, it is the future.

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