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The Office Space Report 2022

Hybrid work is here to stay but what are the implications for the future of how and where we work? Office footprint is an area of particular interest as companies adjust to a more fluid schedule. Can businesses turn under-used spaces into cost-savings?

Sabrina Dorronsoro
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The Office Space Report 2022

The Office Space Report 2022

Hybrid work is here to stay but what are the implications for the future of how and where we work? Office footprint is an area of particular interest as companies adjust to a more fluid schedule. Can businesses turn under-used spaces into cost-savings?

Sabrina Dorronsoro
Linkedin Icon
[Ungated] The Office Space Report 2022

Chapter 01

The Future of Office Footprint

Update: Check out the latest 2023 Office Space Report.

The adoption of hybrid work set in motion a chain of events that have broad and permanent implications for the future of how and where we work.

Office footprint is a topic of interest for companies choosing a more flexible approach to traditional work. Can businesses turn spaces that aren’t being used into cost-savings? 

One of the many benefits of hybrid working is that offices no longer have to accommodate all employees at the same time, meaning companies can downsize their workspace. Office rent is typically one of the biggest costs to a company. In fact, a typical employer in the US could save up to $10,767 per employee in a hybrid arrangement.

With this modern approach to work, you can shift your workplace to meet your needs. Hybrid work is about flexibility, not just for your teams, but for your company as well. In times of economic uncertainty, office spaces are a smart way to cut costs without letting go of the people that power your business.

We polled 247 business owners, facilities managers and those in charge of office space utilization to get a better idea of what flexible companies plan to do with their spaces. Some of our most insightful discoveries include:

  1. Hybrid work makes cents: A whopping 83% of businesses currently operating with a hybrid work model are doing so as a cost-saving measure and 73% would shift to hybrid work to save money before considering other cost-saving measures such as layoffs.
  2. Offices are getting smaller: 46% are currently utilizing only half of their available office space or less. What makes this even more significant is that 60% of those currently utilizing half of their office space or less had already downsized their original space from before the pandemic. 
  3. …and smaller - When asked if they plan to reduce office space square footage next year, 46% answered yes, with 59% reporting they’ll reduce their current space by half or more.

Will the office of the future be more fluid, or will companies hold tight to the status quo of square footage? How will economic uncertainty play into these decisions? Here’s what the data tells us.

Chapter 02

The Workplace has Changed (A Lot)

employees sitting around a table in the office

Hybrid work continues to gain traction as the way forward. Of the businesses we surveyed, 37% work in the office full time, and 61% are hybrid. The majority of hybrid employees (87%) spend two days a week or more in-office. 

Does your company utilize hybrid work as a cost-saving measure pie chart

Hybrid work adoption clearly accelerated as a result of the pandemic and the cost-savings made it stick. Of those with a hybrid work model, 83% utilize it as a cost-saving measure. 

How much of your available office space is currently being used bar chart

Only a fraction (11%) of businesses utilize 100% of their office space, with nearly 45% only using half their available space or less. For 48% of all respondents, that’s less than they utilized before the pandemic. 

Are you utilizing more, less or the same amount of space as before the pandemic donut chart

In fact, 60% of those surveyed report that they reduced their office space since the onset of the pandemic, including moving to a smaller office or downsizing an existing space. 

Of those in a new or smaller space 81% have changed their office layout or design to support new office demands. These additions are made with flexibility in mind; areas for hot-desking and socializing are a staple of these spaces. According to respondents, they are seeing things like:

  • Collaboration/huddle rooms (69%)
  • Wellness centers (60%) 
  • Quiet rooms (55%)
Office space types bar chart

Chapter 03

What’s Next for Office Spaces?

Of those we surveyed, 75% pay more than $51 per square foot for their office space. When asked if they plan to reduce their office space further in the next year, 46% answered yes. When we asked how much, 60% said they’d reduce their office space by 50% or more.

By how much do you plan to reduce your office space square footage bar chart

When we assume an average of 100-150 sq.ft. per employee and an office size serving between 250-500 employees, that could equal a lease reduction anywhere from $625K to $3M a year*. 

While many factors may contribute to an office downsizing, the threat of a recession is definitely top of mind with 62% sharing they worry a recession may impact whether or not they can keep their office space entirely.

However, 73% of companies – where the majority of employees currently work from the office – see the potential for hybrid work to stave off other cost-saving measures such as layoffs.

Considering shift in hybrid approach donut chart

For companies that won’t consider hybrid work, even if it meant avoiding layoffs, 54% responded it was because they are “not willing to compromise on [our] in-office culture.” This group definitely didn’t get the memo.

Chapter 04

Hybrid Work Cuts Costs and Saves Jobs

a busy office with people collaborating

Our data suggests that the next year could see a significant decrease in real estate footprint (REF) as companies look to lower overhead in an uncertain economy. This doesn’t mean the end of the office, just the reimagining of what’s possible. Especially if it means avoiding job cuts, which can hurt morale, productivity and competitiveness. 

Change doesn’t have to be overly complicated. For companies currently trying to decide what to do with their existing office space, may we suggest the following:

Forget the 1:1 Ratio

In a hybrid work environment, not everybody needs their own desk, and fewer desks mean less space. This provides an opportunity to move to a new, smaller office space or downsize an existing space through things like sublets.

Adapt to Adopt

You don’t have to have a smaller space to embrace flexible work. For companies who want to make the most of what they’ve got, there are other cost-effective measures you can take to rework, reimagine and refresh an existing office to meet the needs of a flexible workforce.

Listen Up

Nobody knows your office space better than the folks who work in it. Poll your employees to uncover how they’re using their space, what would make their experience better and what’s no longer used or necessary.  For instance, maybe your staff are no longer hitting the foosball table and, by freeing up that space you’ve suddenly created a new meeting room where employees can collaborate or other professionals can sublease.