• 9 Mar 2020

    Open Offices Vs. Closed Offices: What’s Best for the Company & Employee?

    The environment of an office plays a large role in the productivity of a company’s employees. These days, open office spaces are taking over 70% of businesses and is the layout most Fortune 500 companies choose. It has even helped drop the average square footage per worker about 33%. While some pros to this include being cost-friendly and allowing for room outside a cramped cubicle, its disadvantages far outweigh its advantages. Because of this, a closed office layout proves to be the more cost-effective option while also keeping the benefits of employees in mind.

    Noise Pollution & Distractions Become a Concern in Open Offices

    Open Modular Office Space

    There are many disadvantages to an open office layout. For one, noise pollution causes many distractions leading to a constant break in concentration. Without walls, it is easier for co-workers to interrupt each other and it also causes distractions in privacy in regards to calling customers. Think about the times you are on the phone with someone and it sounds like a shopping mall at Christmas in the background. Even a sudden outburst of laughter can cause disruption. 

    After each distraction, it takes about 23 minutes on average for a person to refocus entirely on the work they were interrupted from. Those in open office spaces are constantly being bombarded by distractions, and therefore struggle to gain true focus in their work.

    This causes people to put in headphones in an attempt to tune out the outside noise, leading to less collaboration, which is supposed to be the intended use of open space. In a study conducted by Ethan Bernstein, workers in open office areas spent 73% less time in face-to-face interactions while email use rose 67% and IM went up 75%. The sight of everyone looking busy with headphones in creates a sense around the office of “oh they can’t be bothered” and leads to more digital interaction instead.

    Open spaces can leave employees feeling exposed and causes them to attempt to conceal their work, even if they’re working to the best of their ability. It is human nature to achieve some sort of privacy, and when it’s not available, people will try their best to find it. When people know they’re being watched, they feel pressure to achieve the expectations of those observing them. According to Bernstein, “we typically save our moments of productive deviance for more private, less transparent places.” A recent study showed that that 95% of employees want the ability to work privately, only 41% were able to do so, and a third need to leave the office to get work completed.

    Open Offices Can Create a “Productivity Tax”

    Focused Worker in Closed Office

    Because of these issues, open offices can reduce employee productivity by 15%. This percentage can be thought of as a “productivity tax” for employees working in an open environment.


    For example:

    Cost of office space difference between open and closed $160,000
    Assume 100 employees @ $50,000 salaries $5,000,000
    Open offices cost an average 15% efficiency     x15%
    Cost of office space  -$160,000

    In this example, the company comes out over half-million dollars better, fewer quality errors, with happier employees and reduced turn over, etc. With closed office spaces, there are many pros that are advantageous to the employee and the company as a whole, even if it means initially going with a more costly setup. The higher the morale and trust within employees, the more profitable a company becomes.

    Employees Gain a Greater Sense of Privacy in Closed Offices

    Interior of Inplant Office
    New Office Enclosed with Panel Built Modular Walls with Full Glass Windows

    Closed office layouts allow for each employee to have their own privacy. This allows for someone to work the way they want to, eliminating the pressure felt by someone looking over their shoulder all the time. Employees can feel secure and confident in the work they’re doing with reduced interruptions.

    Closed offices also allow for each person to decorate their space in a way that gives it a personal feel unique to them. Each person’s special touch to their office leaves them more motivated to work in something they can call their own. With fewer distractions and less noise, a closed office provides a quiet area that lets employees focus. Because there are fewer interruptions, that’s more time available that someone can focus on their work, increasing productivity.

    Now some might say that closed offices might promote laziness within employees because no one is there to watch them. However, with employees feeling comfortable in their own space, they’re going to be more motivated to complete their work. If it is needed, supervision can also be done by installing programs on computers. But, a truly good employer should a) be knowledgeable of the work ethic of their employees and will know to what extent each individual under their management needs supervision and b) be able to inspire employees to work hard and honestly, eliminating the need for supervision.

    Overall, the advantages of a closed office make the most sense for a company in the long-run. While closed office spaces may be more costly in the short run, the investment in the company’s employees’ morale and motivation eventually pays off, creating more productivity and profitability than that of an open office.

    If you’re interested in sectioning off your previously open office space, give Panel Built a call at 800.636.3873, send us an email to info@Panelbuilt.com, or let us know in our LiveChat in the bottom right of our page.  Our prefabricated, modular wall system design offers a convenient and affordible way to provide your employees a comfortable, closed modular office design.  With our reusable, re-locatable, and expandable design, the modular walls offer incredible flexibility in the future and are a great solution for fast growing companies and those which are currently renting their space.  









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