Employers, staff and workplace experts have touted the benefits of the hybrid office, but some businesses insist it’s not right for every company — especially because it can be more costly than anticipated.
Marilyn Gaskell, the Maryland-based founder of TruePeopleSearch, a public-records search platform, knows firsthand that the “just go hybrid” notion can be more financially difficult than it seems.
When her small business shifted to remote work, it gave up its office building and footed the bill for employee wi-fi. That resulted in a drop in overall expenses for the company.
“However, when we shifted to hybrid, we had to find a new office space and continue to support employees who were working remotely,” Gaskell recalled, adding that the best space they could find was $1,200 a month more expensive than the previous office.
At the same time, the company supported wi-fi bills and office gear for six remote employees. That totaled an extra $3,450 per month.
As a result, the company will continue to pay for wi-fi bills, but Gaskell says the company can no longer pay for workers’ in-home office equipment.
Jaume Alavedra Mas, Spanish-based co-founder of Onsite.fun, an online event management service, agrees that a hybrid workplace can be expensive for small businesses — especially when it comes to setup costs.
The ‘hidden costs’ add up
“I think for many companies, the real costs of hybrid are hidden. In theory, it sounds like a good idea to have a physical presence near a talent pool or customer base, but in reality, it’s not always the most cost-effective,” he said.
There are a few reasons why hybrid can cost more. For example, some companies’ costs to keep their offices up and running are the same now as before the pandemic — not every business can relocate to a cheaper, smaller space on a whim. Many may be tied to multi-year leases or can’t sell their existing space.
Many organizations, large and small, also have to redesign spaces to accommodate hybrid work —another expenditure. This may include costs related to additional safety measures, as Google said earlier this year. Such measures can include everything from workspace capacity software, testing and increased cleaning, as well as capital improvements, such as better ventilation systems.
At the same time, many hybrid businesses have the added costs of supporting those who work from home. That involves, in some cases, covering everything from internet connectivity to cloud services and IT security.
In addition, some companies add coworking space rentals to employee perks — yet another cost they have to absorb.
Solomon Thimothy, Chicago-based CEO and co-founder of Clickx, which provides market and growth support for digital agencies, said the “hidden costs” of hybrid working are the additional resources and tools needed to provide efficiency and security.
“Companies are still bearing these unforeseen expenses to manifest resiliency for business continuity,” he said.
Carter Seuthe, an Austin, Texas-based content executive at financial-services company Credit Summit, said that “the main cause of rising costs in a hybrid workspace is employers that aren’t willing to let go of the way things were.
“To cut costs, you need to downsize drastically. You may want to forego the office building for a co-op workspace,” he explained. Things won’t be the same, Seuthe noted, but it can slash expenses and still let workers have a hybrid arrangement.
Michael Bahr, a Wisconsin-based architect with Plunkett Raysich Architects, says that while office square footage per person eventually may increase to address spacing requirements amid the health crisis, offices could still reduce overall square footage if some employees are either completely or partly assigned as remote workers.
“I suspect that many companies will maintain the same square footage, and for those that lease space they may actually see a [temporary] reduction in costs because of landlord incentives to maintain occupancy rates,” he said.
Andre Kazimierski, the CEO of Improovy, a painting service based in Chicago, says one reason many companies are opting for a hybrid workplace is because they think staff will only accept hybrid or remote options.
“Don’t adopt a workplace model just because it seems popular,” Kazimierski said.