A common question in today’s commercial real estate market for employers and employees. Will I get better results with a virtual office or a traditional office? Read below for some insights.
I’ve done it all … from an office perspective. As a small business owner I’ve had both a virtual office and a traditional office. In the corporate world I’ve worked in a traditional office environment and have had a combination hybrid virtual-traditional solution. As a small business owner the advantage of a virtual office is cost savings. In the corporate world in which I worked there were no savings to the company at all. There were advantages and disadvantages to each.
Herewith my partial list of the pros & cons of virtual and traditional office space:
Virtual Office Advantages:
- Greater flexibility.
- Reduced company real estate costs.
- Less office furniture and equipment needs.
- Lower corporate energy costs.
- Can recruit qualified employees from a wider pool of candidates.
- Improved employee satisfaction.
- Company can be “green” by reducing commute miles for employees.
- Teams spread throughout a territory don’t require offices – see #1 above.
Virtual Office Disadvantages:
- Increased telecommunication & network expenses.
- Virtual companies may require collocation or data center space – offsetting real estate savings.
- Network infrastructure is more expensive to set-up and maintain.
- If providing individual equipment, the company loses economies of shared office resources.
- Employees are potentially less productive.
- Employees are frequently less dedicated.
- Interaction between team members is greatly reduced.
- Employee friendships and company loyalty are harder to establish.
- Employees have higher expenses for home office space, equipment, and electricity.
Traditional Office Advantages:
- Lower total office equipment costs because of shared resources.
- Lower telecommunications costs due to economies of scale.
- Network expenses are less.
- Network security risks are reduced.
- Employee interactions are improved.
- Employee camaraderie is enhanced.
- Close communication makes it easier to respond to customer needs.
- Greater idea sharing results in improved practices and outcomes.
- Team cohesion is greater – improving friendships and company loyalty.
- Company can more effectively monitor worker productivity.
- Employee training and team integration is better.
- Reduced employee turn-over.
Traditional Office Disadvantages:
- Higher real estate and energy expenses.
- Harder for company to quickly expand or contract based on current market conditions.
- Increased office furniture expense.
- Employees come from a more limited geographic area – limiting potential pool of workers.
- Longer employee commute times.
Each business must carefully evaluate its unique situation and the pros & cons of each office solution. A visit with a commercial real estate broker will be helpful in making the right decision. If you’d like to talk to the DFW Real Estate Guru click the link below.