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.