Firms hit by rising worker costs

01 Oct 2013

Businesses paid more on average for office space per employee in 2012 than in any of the last five years, new research shows.

A report by real estate analyst IPD reveals that it cost companies £4,638 to accommodate a full-time employee last year, a rise of 6% on the figure for 2011.

The increase comes despite efficiency efforts but many businesses with long-term occupancy deals on property cut their workforces during the recession but were unable to relocate or cut their office space at the same time.

Maintenance expenses rose alongside rents and rates between 2011 and 2012 because of the importance of keeping expert skills. Rental costs now make up less than half of businesses' total costs for the first time since 2005, the study discovered.

The research found that although a mixture of teleworking, cloud technology and hot-desking has helped firms control efficiency and employee costs, most of the benefits have already been felt and the reduction of staff numbers has happened faster than the reduction of office space, pushing up the cost per employee.

Copyright Press Association 2013

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