Office space efficiencies — Weighing open collaborative design versus a traditional office plan

In the past 10 years, office space design has moved from traditional private offices to open collaborative design.

About 65 to 70 percent of companies have migrated to an open plan, with workstations and few, if any, hard walls from floor to ceiling. In this plan, whether you own the company or you’re an intern, you’re in the same environment, with access to everybody.

This is contrary to traditional office design, which typically has private offices along the window perimeter.

So, how do you know which is best to meet your specific requirements?

“I don’t know that there is a right or wrong answer,” says Rico Pietro, SIOR, principal at Cushman and Wakefield/CRESCO Real Estate. “This isn’t going to be an equation with an answer at the end. It’s still influenced by what your business is, and where you are in the business cycle.”

“These decisions clearly are not short term; they are typically five- to 10-year commitments, or longer. So, it’s not only a question of what works today, but what’s optimal for the future,” says Bill Saltzman, CCIM, SIOR, executive vice president and director of Office Services at Cushman and Wakefield/CRESCO Real Estate.

Smart Business spoke with Pietro and Saltzman about the pros and cons of each design, and choosing between the two.

What are the benefits of an open collaborative design?

The main benefit is density. Without perimeter offices, you can put the same number of people in less space, or more people in like-kind space. Another benefit is the idea that, without barriers or closed doors, the open plan provides more opportunities to brainstorm and work together, which should lead to increased productivity. It can create an environment where every idea has equal merit.

What are the drawbacks of an open design?

With an open layout, there can be a lack of privacy, which may adversely impact confidential and/or proprietary information. This configuration is often disruptive as workers overhear conversations, which actually reduces cognitive performance and productivity.

In addition, studies have found workers in open-air offices get sick more often, costing, on average, two and a half additional days of worker absence per year. Other studies found the collaborative team model doesn’t necessarily mean better communication — workers report less satisfaction and more stress in a sea of workstations.

What about pros and cons of traditional office design?

The pros correlate to the cons of an open plan — there’s more privacy, less distraction and less chance of workers spreading germs. Depending upon your industry, clients may take comfort in knowing that confidential or proprietary information is more secure. Many employees also are used to traditional offices and like how the position of the office defines company leadership.

The biggest cons are cost and space. It probably costs a 20 percent-plus premium to build out. You also may be able to put 50 people into an open area, but only 35 into that same footprint with private offices.

It’s also not as easy to customize. So, if you add people to research and development, but outsource people in legal, you may have to move semi-permanent walls, and get building permits, to re-arrange the space.

Why is cost not as simple as it might seem?

It’s a question of who pays for what. Landlords usually build private offices as part of a lease commitment, while tenants own the workstations and partitions in a typical open plan. In theory, tenants can move cubes to a future location, but the cost to relocate and reconfigure can be considerable. It’s more a question of allocation of cost; it’s not necessarily that one solution is substantially more cost effective.

What’s your advice for trying to determine which is the best fit?

First, understand what culture you want for your company. Then, talk to your employees and the experts. Sit down with your real estate broker and architect, so they can help coach you through the pluses and minuses of your spatial design and how this decision influences your bottom line. Everything is based on the culture, timing, use and budget, so carefully evaluate the options to find the right solution for your business.  

Rico Pietro, SIOR, is principal for CRESCO Real Estate. Reach him at (216) 525-1473 or [email protected]

Bill Saltzman, CCIM, SIOR, is executive vice president, director of Office Services, CRESCO Real Estate. Reach him at (216) 525-1499 or [email protected]

Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate