Hold onto your office chairs!
Hybrid work is shaking things up big time, transforming how companies think about space and teamwork.
According to the 2023-2024 CBRE Global Workplace & Occupancy Insights, businesses worldwide are navigating these changes by optimizing their office portfolios and enhancing workplace effectiveness.
Hybrid Work is Driving Portfolio Optimization
Over the past three years, the shift to hybrid work has led to significant changes in how companies manage their office spaces:
- Reduced Space per Person: The average square foot per person has decreased by 22% globally, reflecting a more efficient use of space.
- Increased Occupancy Rates: Occupancy rates, which measure the allocation of people to seats, have risen by 28%.
- More Collaboration Spaces: To support hybrid work styles, organizations have increased collaboration spaces by 44% globally since 2021.
- Flexible Work Policies: While 45% of companies require employees to be in the office at least three days a week, less than 4% enforce strict consequences for non-compliance.
Balancing Space Supply and Demand
Despite these efficiencies, there remains a notable imbalance between space supply and demand. Office space utilization rates, measuring actual use of space, remain under 40%, a significant drop from the pre-pandemic average of 64%.
This underutilization suggests that office attendance has plateaued, and addressing this imbalance requires:
- Policy Adjustments: Clear communication and adjustments to hybrid work policies.
- Workplace Enhancements: Improvements in the workplace experience to attract more employees back to the office.
- Portfolio Reductions: Further reductions in office space to align with current usage patterns.
Strategies for Portfolio Optimization
To address these challenges, many organizations are prioritizing space-sharing and portfolio optimization. Key strategies include:
- Space Reduction Plans: 43% of companies plan to reduce their portfolio size by more than 30% in the next three years.
- New Performance Metrics: Developing a new scorecard that partners corporate real estate (CRE) with HR, Finance, and IT to track the workplace’s impact on employee performance, operational priorities, financial goals, and ESG objectives.
- Data-Driven Insights: Increasing the use of micro-level utilization data through sensors and Wi-Fi/network activity to better understand employee workstyles, reduce occupancy costs per visit, and enable dynamic building management.
The 2023-2024 CBRE Global Workplace & Occupancy Insights highlight the ongoing evolution of workplace strategies, driven by the broad adoption of hybrid work.
As organizations continue to adapt, the focus on optimizing space and enhancing workplace effectiveness will be crucial in supporting business goals and fostering a productive and engaging work environment.
References:
