The British Council for Offices (BCO) today published research carried out by Cebr and Populus, revealing that UK plc spent an estimated £28.5 billion on offices in 2012 – outstripping business expenditure on legal services (£24.3bn), accounting (£14bn) and insurance services (£23.8bn).
Despite this, nearly three fifths (57%) of the 250 senior executives from large organisations surveyed said property issues were not regularly discussed in the boardroom and responsibility for property is still likely to fall outside management teams.
The survey found signs that businesses are starting to wake up to the potential business benefits that office space can deliver but still take a very cost-centric view towards the workplace. Despite the fact that almost three-quarters of organisations reported that they were constantly analysing and assessing whether their space is being used efficiently, cost was found to be the most important factor in assessing the office’s performance (73%).
With 68% of organisations surveyed likely to review how their office space is used in response to organisation growth or investment, the BCO believes that there is a significant opportunity as economic recovery accelerates over the next few years for businesses to start to see property as having the potential to bring significant benefits to their overall performance.
While staff retention and productivity were recognised to be important factors in assessing the performance of office space, those surveyed admitted to failing to look at the role of office space when productivity dropped (40%), recruitment and retention levels fell (39%) or when staff morale fell (27%).
Richard Kauntze, Chief Executive of the BCO, said: “Property is a significant expenditure to UK plc, but is typically seen as no more than that. What is often overlooked is that it is also a very small proportion of the overall cost of running most businesses when contrasted with the cost of the pay roll.
“What many businesses don’t understand is that by using property efficiently, treating it as a resource to be optimised, it can deliver tangible benefits in employee performance through increased productivity and wellbeing. Businesses shouldn’t wait until costs need to be cut before reviewing their office space – it’s important that they look at how to get the most out of it like any other expenditure. This is why we believe management boards need to recognise that property merits greater attention.”
Other findings include:
- Of the estimated £28.5bn spent on offices in 2012, rent accounted for almost half of this cost at £13.6bn whilst rates were a fifth at £5.6bn. The remaining £9.2bn consisted of furniture and fixtures, repairs and maintenance, and facilities management.
- The expenditures associated with office occupation make up a significant part of the cost base of the ‘office-intensive’ service sectors. For instance, offices cost the professional services sector an estimated £5.3bn, and the finance and insurance sector £3.2bn.
- From those surveyed, company-wide wages, salaries and employee benefits accounted for the highest proportion of annual turnover (23%) and rent was 9% of businesses external spend.
For more information about the BCO, please visit www.bco.org.uk
For further information, please contact:
Melissa Mackreath / Scarlett Yianni / Andy Rogerson
British Council for Offices / Blue Rubicon
T +44 (0)20 7260 2700 / 07850 922350
Notes to editors:
About the BCO
The British Council for Offices (BCO) is the UK’s leading member organisation representing the interests of all those who occupy, design, build, own or manage offices in the UK. Since inception in 1990, the BCO has provided thought leadership and best practice in all issues related to the creation and use of office space – through to its research, awards, conference and events programmes. www.bco.org.uk
The Centre for Economics and Business Research (Cebr) is an independent consultancy which provides analysis, forecasts and strategic advice to major multinationals, financial institutions, government departments, charities and trade bodies. Since its foundation in 1993 by former CBI and IBM Chief Economist, Professor Douglas McWilliams, Cebr has been ‘making business sense’ by applying theoretical economics backed by quantitative evidence to real world decisions for private sector firms and public sector organisations. www.cebr.com
Populus interviewed 256 Financial Directors, Chief Financial Officers (CFOs), Chief Executive Officers (CEOs) and Chief Operating Officers (COOs) online between 24 September and 2 November 2013. Populus is a member of the British Polling Council and abides by its rules.