Nick’s comments were published in StartUps.co.uk, 22 August 2023, and can be found here.
“The decision for companies to relocate is now influenced by factors beyond just hard cash.
“For many businesses, there are a number of positives to downsizing and chief among these is the ability to bring down overhead costs, including rent, service charge, insurance premiums, business rates and utilities, as well as furniture and IT equipment.
“Other benefits include the flexibility offered to employees by hybrid working plans and the associated benefits for mental health and wellbeing, and a decreased number of trips to the office – cutting down on commute costs, time and carbon footprint.
“This is not to say the downsizing is purely beneficial for businesses and, in many cases, the decision to downsize is easier said than done, and businesses who rent their office space must be wary of the fact that they are tied down by often lengthy leases which they can’t get out of at short notice, simply to reduce overheads.
“Often there are also additional costs associated with leaving a lease early and, given it is usual for at least 6 months’ notice to be given to a landlord, cost savings are not going to be immediate. Tenants may also find themselves having to make a large payment to its landlord for dilapidations, even after they have relocated.
“Downsizing may also have a negative effect on office culture and wellbeing, alienating the very people that generate and process the business. Younger employees may also find their development stunted by the move to working from home on a permanent or semi-permanent basis, and it is vital that the decision to downsize does not have a negative impact on such staff.
“Finding the balance between these factors will no doubt be crucial in a company’s decision to downsize.”