Illustration: Graham Roumieu

James Costa has 12 employees—some of whom he’s never met in person. Costa is the founder and creative director of Phuse, a Toronto digital design agency that has no office. To communicate with staff in Canada, the U.S., the U.K. and South Africa, Costa uses project management software, instant messaging and video chat.

“We’re not spending $24,000 a year on office space. We get to choose the best people from anywhere in the world. And I get to spend so much time with my son,” Costa enthuses from his home office. “It’s the best decision I’ve ever made.”

THE OTHER SIDE: Why Working from Home Doesn’t Work »

There are many jobs that will never be done remotely. No one has yet successfully pressed sheet metal or centrifuged a blood sample from the comfort of their living room. But for all the vocations that require a brain and a keyboard and not much else—a growing share of the economy—the traditional office is a vestigial attachment, a wing that’s become too stunted to fly.

The first and greatest cost is to businesses themselves. Owning or renting thousands of square feet that are occupied for, at most, a useful third of any given day, is overhead that many companies are scrutinizing with growing skepticism. Research by commercial real estate brokerage CBRE shows that in major Canadian markets, the average square footage of office space per worker has fallen from 225 to 170 over the past 10 years.

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Employees also increasingly prefer more flexible work. Daily commutes in urban areas have crept up in length and nightmarishness. A widely cited Toronto report pegged the economic damage of gridlock at $6 billion just for that city.

Things hardly improve when you get to work—and have to endure meetings of dubious purpose and concentration-disrupting pop-ins by colleagues. The modern office, for many people, is not a temple of industrious productivity. It’s a marketplace of distraction, with all the charm of a middle-school cafeteria and comparable levels of useful work being done.

This article is from the Business B.S. Special Report in the March 2015 issue of Canadian BusinessSubscribe now!

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