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Open Office vs. Private Office: Which Type of Office Layout Is Right for Your SMB?

Skye Schooley
Skye Schooley
Staff writer
Business News Daily Staff
Updated Oct 13, 2022

Here's what to consider when deciding on the right layout for your small business.

  • When choosing between an open office, private office, and combination office layout, assess which design would best suit your industry, employee preferences, and job functions.
  • Open offices place colleagues within close proximity to each other, giving them the chance to communicate freely, which can be both good and bad for the company.
  • Private offices allow workers a better chance to focus on their work without distractions; however, collaboration is limited, and company culture is often lacking.4/13/2018 01:46 pm

When deciding on your office design, it is important to consider more than just cost or personal preferences. Private offices and open office floor plans each have pros and cons that can affect employee productivity, job satisfaction and work-life balance.

Depending on your industry, employee preferences and job functions, one workplace design might be a better fit for your office than the other. For instance, Dan Zakai, CEO and co-founder of Mindspace, suggested that while a more collaborative team might perform well in an open layout, many employees benefit from some sort of privacy, like the addition of private offices and other privacy solutions (i.e. phone booths and one-on-one rooms).

Bill Himmelstein, CEO of commercial real estate brokerage Tenant Advisory Group, said the goal for improving your company’s productivity is to give employees a working environment in which they can accomplish as much as possible.

“Sometimes it’s more collaborative in nature, and other times it is [finding] some quiet space and [staying] heads down for a while,” he told Business News Daily. “Either way, an office space should be adaptable, support the company’s culture, and … serve as a place where employees and partners alike want to spend time.”

A combination of open and closed floor plans is also an option, and a highly desirable one to consider. According to the Gensler U.S. Workplace Survey 2019, 77% of employees prefer work environments that incorporate features from both open and closed office plans.

Many small business owners make the mistake of assuming which type of office plan is best for their workers, but this can cause issues in some organizations. Rather than picking what’s most convenient or what you think is most popular, weigh the pros and cons of each, based on your team’s needs.

Open office plans

Open offices, for the most part, lack cubicles and private offices. Colleagues typically sit close to each other in a shared office space. This workplace design gives office workers the chance to communicate freely, which can be both good and bad for the company.

Zakai and Himmelstein outlined the pros and cons of open offices.


  • Opportunity for collaboration and innovation
  • Better chance for healthy, informal communication
  • Improved company culture
  • Increased manager accessibility and sense of transparency
  • More room for new employees
  • More affordable option (less square footage per employee)


  • Noise and distractions, which can hinder productivity and/or disrupt work-life balance
  • Lack of privacy for phone calls and one-on-one meetings
  • Potential security issues
  • Potential opposite effect on collaboration

Open office layouts shouldn’t be off the table, but there needs to be a balance. Throwing everyone together in one room, with phone calls, meetings and conversations between colleagues, is a recipe for disaster.

“While the open layout is feasible for some industries, workers need zones dedicated to minimizing distractions,” said Himmelstein. “Oftentimes, this style of office layout amplifies the negative effects of overcrowding, as finding a quiet moment to compose emails [and] reports or make phone calls can be a challenge.”

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Private office designs

Private offices and independent workspaces give workers a better chance to focus on their own work without distractions. However, collaboration is limited, and company culture is often lacking.

Zakai and Himmelstein outlined the pros and cons of private offices.


  • Fewer distractions, resulting in increased efficiency and focus
  • Prestige status that can be used as incentive for promotions
  • Private space for personal and professional matters
  • Higher level of security
  • Enhanced collaboration if a small team shares a private office


  • Lower levels of engagement, team building and sometimes office morale
  • Less chance for serendipitous collaboration and innovation
  • Perceived lack of transparency
  • Potential subcultures in the organization that misalign with the corporate culture
  • Higher cost (for cubicles and/or bigger space to accommodate private offices)

While some jobs require more privacy than others, a certain extent of privacy is necessary in every business.

“Businesses have quickly discovered that when privacy leaves the workplace, so does productivity,” said Himmelstein. “Few private spaces leads to a lack of places to deal with personal issues that will inevitably distract an entire team if someone is stressed or upset. Additionally, employees may be less likely to take risks if their peers are watching them fail in the open.”

Combination of both types of office layouts

Focus on the nature of your business. What environment will suit the types of workers you employ and the tasks they must complete?

“It starts with understanding your culture and how your people work, and then carefully planning the office space selection, design and construction,” said Himmelstein.

He advised speaking with a designer and broker about the best layout for your team, discussing how much privacy your workers need and what type of environment you prefer. Employees should have a say in the matter, and their situations and job functions should be considered in the decision. For example, Himmelstein said, you could limit private offices to top executives and add conference rooms as needed to give people places to meet in private.

“Consider the work and your team’s needs,” he added. “Does the nature of the work require frequent phone calls with clients, or tasks that require strong focus? Or are your employees often engaged in group projects, necessitating regular communication?”

While open offices may be popular today, many companies are finding out the hard way that they need boundaries. You can have the best of both by finding a balance. If you decide on a more open layout, provide private booths for phone calls and conference rooms for meetings. If you go with a more private office space, ensure you’re still collaborating and maintaining positive company culture through team outings or check-ins.

Some source interviews were conducted for a previous version of this article. Additional reporting by Sammi Caramela.


Image Credit: Monkey Business Images / Shutterstock
Skye Schooley
Skye Schooley
Business News Daily Staff
Skye Schooley is a human resources writer at and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.