'They're pointless': This CEO says the office is a waste of money

Are employers wasting their money on empty office spaces? 

The short answer is yes, according to Scott Brighton, CEO of software company Aurea, which has been fully remote since 2012. Most organizations, Brighton says, spend roughly 10% of their total budget on real estate, including office space, utilities, supplies and decor. But in his experience, that money can be better spent elsewhere. 

"[The financial drain of office maintenance] gets hidden in the cost structure of a company," he says. "The cost of an employee to a company is generally 30% to 50% higher than their salary, because it includes things like their benefits and taxes. But most important, it's the office, a cost that is allocated towards all employees." 

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Commercial building owners pay an average of $6.79 per square foot in non-fixed operating expenses, according to Constellation, a leader in clean energy production. Over half of a budget will go toward HVAC services, 17% will go toward appliances, 10% toward lighting and 8% toward office equipment. 

"That's a lot of money considering those assets aren't doing a whole lot to make the business better," Brighton says. "You can imagine what would happen if you suddenly got that 10% [of total spend] back. If you're a billion-dollar company, we're talking a hundred million dollars a year. What if you took that money and you invested it in your employees instead?"

The reallocation gives employers a number of options, according to Brighton. If they can't put it towards salary increases, which is one of the more obvious choices, it could be some combination of giving employees the tools to be effective at home, like subsidizing their work-from-home setup or even covering their wifi bills. 

For Brighton and his company, he decided to use their "building budget" to pay for trips once a month to different locations where employees can meet their colleagues in person and collaborate on projects that they've been working on remotely together.

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"You have so many options with all of those resources," he says. "It suddenly frees you up to do amazing things that will more than make up for the perceived loss of employee engagement and collaboration that is often cited as the reason that companies want people back into the office." 

Keeping the office up and running doesn't just hurt employers' wallets. It's creating a fiscal challenge for employees too. Employees spend twice as much money at the office than they do working remotely — $863 a month versus $432 a month, according to data analytics platform OwlLabs. That money goes towards the physical cost to commute as well purchasing breakfast, lunch and in some cases dinner while they're in the office.

The move toward completely getting rid of the office will be a slow one, with many companies currently mandating a return to in-person work. But Brighton expects a significant shift once more employees begin to push back and employers realize that the cost to force them back is much too high — both in terms of office maintenance and the potential loss of their employee base.

"It's a long-term trend, but as technology continues to develop, I do believe that over time we're going to see most companies be virtual," he says. "And we're going to come to the conclusion that this is actually working completely fine and we're working just as effectively. Employees have already reached this conclusion, so why do we need these buildings? They're pointless."