Company leaders have learned a lot over the past year returning to offices, like the fact that they don’t need nearly as much physical office space as they did pre-pandemic.
Some 75% of businesses plan to reduce office square footage next year, according to a survey from hybrid work platform Robin, including responses from over 500 business owners and facilities managers. That’s up 30% from last year. Companies are also heavily considering economic conditions and business outcomes, pulling leaders in two directions. While financial challenges continue, they’re struggling to justify how much they’re spending on office space, with staff still largely preferring to work from home.
“For companies with a physical presence, the office is easily one of their top three biggest expenses,” the report said.
About 40% of survey respondents said they are currently using only half of their available office space, and only 28% said they are using all of their office.
As certain staff flow in and out of the office on certain days (and some pop in late and leave early, known as “coffee-badging”), companies are turning to more flexible seating, and other arrangements in hybrid environments that now require far less square footage.
Hot-desking has become popular again for example – where staff use whichever workspace is available when they come to the office instead of having a permanent, designated desk. Some companies use apps and other platforms where staff can reserve seating and see which coworkers also plan to work in-office that day. About 90% of companies in hybrid arrangements are using flex seating as a cost-saving measure, up 8% since last year, the report found.
“What employers are trying to do is generate an office that people want to come into and work out of, and that’s not sitting in a large empty space,” said Micah Remley, Robin CEO.
That means adding other amenities to support new employee demands, like more soft seating and lounge areas, collaboration and huddle rooms and quiet rooms and booths. Spaces for intentional collaboration and other for dedicated focus work are top priority amenities for workers, according to Robin. Soft-seating is a way to create a more casual space within offices where impromptu conversation and mentorship can happen, Remley said.
“The whole reason they’re in is to interact with their co-workers, so you really want an office space that drives that interaction,” he said.
The key metric companies are currently using to inform these decisions is daily office occupancy, looking at how many employees come each day as a percentage of their whole workforce. Some may use badge swipes or other tools to track attendance.
“Think about walking into an office and having a choice of a lot of different work points, that’s kind of the new terminology, it’s less about an individual desk anymore, it’s about having a choice of different places and types of spaces to sit,” said Janet Pogue McLaurin, Gensler’s global director of workplace research.
Spaces of individual work, for creative group work, and areas to reflect and restore are key for the kind of work that happens in offices today, she said.
Focus work areas can include individual booths, libraries or other spaces known to be quiet zones. Some companies have even leveraged focus lounge pods where staff can sit back and feel enclosed while also eliminating visual distractions.
People are also still working out of third spaces, like coffee shops or outdoor areas, and leaning on neighborhood amenities as additional workspaces, she said.
“We need to be thinking less about less square footage, but more what are the types of spaces that we really need for the purpose that people are coming into the office,” she said.
Naturally, companies can stand to make significant savings from reducing office space, especially if employees aren’t even using it to full capacity. And companies have totally altered how they prioritize real estate in the wake of the pandemic, and falling occupancy rates. “They’re looking at their strategy from a real estate standpoint to be more ‘just in time’ than what has historically been ‘just in case,’” said Lenny Beaudoin, executive managing director and global lead for workplace strategy at real estate firm CBRE.
“So organizations held more space in the past for contingency, and what they’re realizing is, through hybrid work and the way their employees are actually utilizing the space, they can actually reduce some of the space they hadn’t used in the past, because they don’t need it as a contingency like they once did, when everybody was coming to the office every day,” he said.
But ultimately they’ve realized those spaces became much less vibrant with people working in them in scattered arrangements. “Having a more vibrant experience actually drives increased office use and having an empty office does the opposite. It leads to decreases in people wanting to show up,” he said.
“If I show up one day, and it’s kind of empty, I’m probably less likely to show up the next day if I don’t have to,” he added.