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LONDON-Management consultancies, accountants and law firms could face a staff replacement bill amounting to 11% of their annual fee income if they relocate their offices away from their traditional base in the City of London, according to a new study from GVA Grimley.

The research found that nearly a quarter of City-based professionals would seriously consider changing employer specifically to avoid having to work in a less central location. And nearly three quarters said they would almost certainly look for another job if their firm relocated to a business park inside the M25.

GVA Grimley partner Nick McCalmont-Woods says: ‘Many professional services firms see improving their office environment as a way of retaining key staff, and, others are keen to move to lower rent areas to reduce costs. Ironically, in London there are considerable risks, as well as benefits, in making a move of this kind.’

Recruitment consultants, the Hay Group, calculate that the cost of replacing a highly-paid professional could be one and a half times their salary. So, GVA Grimley estimates, for a London-based professional firm of 450 fee earners paid an average of £80,000 ($115,000) per annum, a poorly-judged relocation could generate staff replacement costs of up to £12 million ($17.25 million)–the equivalent of 11.4% of gross fee income for a typical firm of this size.

GVA Grimley’s London regional senior partner Stephen Robinson, says: ‘Firms seeking to take advantage of lower rents and more space in less central locations must ensure that they take account of the full financial implications of such a move. The benefit of more spacious or cheaper offices could potentially be far outweighed in the short term by the disadvantage of a sudden turnover of staff.

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