Why Companies Aren't Cutting Back on Office Space
- Firms predict only a 1% reduction in office space after Covid
- Some social distancing may still remain in place
- Employees want to work from home on Mondays and Fridays
Cresa offers several services to help you plan for your
current or future commercial office requirements. We offer consulting on hybrid workforce
strategy, occupancy planning, space management solutions, workplace strategy
and more. Let’s talk if you think Cresa
can help your company – www.tenant-broker.com.
Why Companies Aren’t Cutting Back on
Office Space
by Jose Maria Barrero,
Nicholas Bloom, and Steven J. Davis
January 25, 2022
In our monthly
surveys of 5,000 American workers and 500 U.S. employers, and in our
numerous conversations with managers, a huge shift to hybrid work is abundantly
clear for office and knowledge workers. An emerging norm is three days a week
in the office and two at home, cutting days on site by 30% or more.
You might think this cutback would bring a huge drop in the
demand for office space. But our survey data suggests cuts in office space of
1% to 2% on average, implying big reductions in density not space. We see three
reasons for this.
First, high density at the office is uncomfortable. Many
workers dislike crowds around their desks, much more so now that infection
risks are top of mind. Discomfort with density extends to lobbies, kitchens,
canteens, and especially elevators. The only sure-fire way to reduce density is
to cut days on site without cutting square footage as much. Discomfort
with density is here to stay according to our survey evidence.
Second, most employees want to work from home on Mondays and
Fridays. Faced with tight labor markets and the ever-present challenge of
attracting and retaining talented workers, many employers have opted to meet
this demand. Working from home on Mondays and Fridays is becoming accepted
practice at many leading firms. As a result, the shift to hybrid affords only
meager opportunities to economize on office space.
Third, because employers are hard pressed to attract and
retain talent — and to bring that talent onsite — the office of the future must
be more inviting. Tightly packed cubicles are out. Spacious, lounge-style, open
seating plans are in. So are meeting rooms that accommodate a mix of in-person
and remote participants. Sound-proofed cubicles to handle Zoom and Skype calls
and the like are also on the rise.
In short, employers are reshaping offices to become more inviting social spaces that encourage face-to-face collaboration, creativity, and
serendipitous interactions. A recent report by CBRE, a global real estate services firm, highlights many of
these trends, including the shift to office layouts that foster collaboration.
Accenture, for example, has introduced tech-free “reflection zones,” yoga and
wellness areas, and comfortable, lounge-like conference rooms with sweeping
vistas. Salesforce has converted executive offices into small-group conference
rooms open to all employees, replaced desks with couches, expanded dining areas,
and installed white boards for collaborative team activities.
It’s also easier to bring employees to the office when the
local environment is rich in amenities — restaurants, bars, entertainment
opportunities, and cultural venues. What does all this mean for city centers?
Because they remain central to local transport networks, cultural activities,
and high-quality entertainment, established city centers are the most natural
location for the office of the future. They just won’t draw as many office
workers per day — especially on Mondays and Fridays.
End of Article
If you have significant questions about your current real estate strategy, it may be time for a discussion. Once we have started our conversation, we can create a strategy to look at your business operations and current space and then craft up a plan to find something that is a great fit in the area. With the current vacancies and inventory, we will work with you to get the best deal. We represent tenants ONLY, so you can feel comfortable that we are working for your business 100%. If we can help you by being your tenant broker in the DC, Maryland, or Northern Virginia area, visit my website or call me at 301-841-6542. Make sure to follow all my social efforts by clicking on the links below.
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301-842-6542
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