It wouldn't have to be much of a salary cut. If you amortize the up-front cost for around a 110 square foot office, the total is only about $5,000 a year (more than an open office).
45 additional square feet at (a vastly overestimated) $100 per year per square foot for rent. $5,000 construction costs amortized over 10 years.
The way we thought about it was primarily butts in seats. For simplicity, if open office = about 1000, a reasonable closed office environment for us would have housed about half of that. If we needed 1000 to deliver product X, we’d either deliver product X over double the time or for double the (real estate) cost plus the non-local collaboration cost (not insurmountable, but it’s part of the tradeoff).
We’d need to see a closed office productivity increase of double or more to justify it, and we just couldn’t, even talking to other companies that had the kind of collaborative environment we thought of as ideal if we had infinite space. They didn’t see increases at that level.
To be clear, I’m seriously simplifying here. There are so many other considerations like workplace happiness, some amount of creative “collision” differences, churn and burnout, different individual needs for privacy, whether certain collaboration styles enabled by space fit the company culture, the type of work that’s happening, how likely that team structures will be the same in 1 year, 5 years, 10 years. Ultimately, we bet on space flexibility and giving teams more control over their space than giving everyone an office or team room. It’s hard to say what the alternate history would have been, but we do pretty regular surveys about workplace happiness and have seen significant positive increases compared to our old office (also open but much more rigid, far fewer private spaces) and general happiness with people’s access to private space and ability to get work done.
Edit: I also don’t want to overgeneralize. This made sense for us, but I think there are lots of situations where it does not make sense to have an open office, especially if you have a smaller company stocked primarily with very, very high performers doing individually-driven but very deep creative work (in the sense of integrating a lot of information). I would hope all companies would be more thoughtful about it, but I wanted to provide a little look at how a company that values privacy and enabling deep work might still arrive at an open office.
45 additional square feet at (a vastly overestimated) $100 per year per square foot for rent. $5,000 construction costs amortized over 10 years.